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6 Examples of Effective Crisis Leadership

What are the attributes that make a great CEO? 

As you can imagine, given the billions at stake, it’s a subject that has been well-researched. According to consulting firm Korn Ferry, who have assessed almost 70 million executives over the years, three of the top four qualities of a great CEO are exactly what everyone expects: someone who sets vision and strategy, shows financial acumen, and can drive growth. So, what’s the fourth?

Every bit as necessary, but often overlooked, is a CEO’s ability to lead during a crisis. As all sports fans know, anyone can coach a team when they’re winning and conditions are right. But it’s when the chips are down that great coaches and managers prove their worth. In politics, they say leaders are forged in times of crisis. It’s no less true in business.

Unless you’re fortunate enough to be working in the home fitness or food delivery industries, the past few months certainly count as a crisis. COVID-19 has wreaked havoc on almost all industries, resulting in plummeting revenues, massive layoffs and whole companies going under. What could senior leaders have done, and still do, in the face of such a crisis?

In their recently-released whitepaper examining just that issue, management consulting firm McKinsey & Company argue that there are a handful of behaviors that leaders who are successful in the face of catastrophic events have in common.

  1. Mobilizing a network of teams: Great leaders understand that the typical top-down management style and flow of information and decision-making isn’t suited to times of uncertainty. Therefore, leaders should set clear priorities and empower their teams to implement solutions. They should also elevate a network of decision-makers throughout the whole organization.
  2. ‘Deliberate calm’ and ‘bounded optimism’: Uncertainty and unpredictability naturally elicit feelings of fear and anxiety in almost all people. Great leaders walk the fine line between confidence and realism.
  3. Acting quickly and decisively: Leaders who need all the facts and analysis to make decisions are not suited to times of crisis. Successful leaders remain calm, take in the available information, and then act clearly and decisively.
  4. Demonstrating empathy: Employees are people, parents and children. In crunch times, they quickly slide back down the hierarchy of needs to the fundamental questions: will my family, my friends or me be affected or hurt by this? Leaders understand that all crises are human situations, first and foremost. 

The leaders who lead by example

These might seem like common sense behaviors, but the number of companies that have buckled under pressure proves that’s not the case. They’re sophisticated, discreet and humble characteristics, and adopting them becomes even more complicated when times get tough. Difficult but not impossible, as the following examples prove.

Arne Sorenson, CEO of Marriott Corporation 

COVID-19 impacted the hospitality industry more than most sectors, totally wiping out months of revenue with the long-term repercussions potentially stretching for years. Marriott is the largest hotel chain globally, employing 200,000 people around the world; the potential fallout of the Coronavirus could be catastrophic.

As the severity of the pandemic became apparent, Marriott CEO Arne Sorenson sent out a video message to all employees. The message started with compassion for employees or family members affected by COVID-19 before Sorenson calmly accepted that the pandemic represented “the worst disaster ever to happen to Marriott.” He explained that difficult decisions would have to be made but reassured employees that the crisis would end and that Marriott would be ready to succeed.  

Meanwhile, several Marriott hotels opened their doors for frontline workers battling the pandemic to stay for free to isolate themselves from at-risk loved ones. 

Jacinda Ardern, Prime Minister of New Zealand 

Another leader who took plaudits during the pandemic was a political one: New Zealand’s Jacinda Ardern. A combination of decisive actions, clear communications and a human touch saw New Zealand limit COVID-19 deaths to just 22, while also allowing the country to ease lockdown restrictions far more and earlier than most other countries.

Unfortunately, Ardern had some practice in dealing with crises, having led the country through the heartache caused by the Christchurch mosque shootings in March 2019. After the shootings, Ardern sensitively showed compassion for the victims; she rallied the nation around its values of being an open and tolerant country and moved quickly to change New Zealand’s gun laws.

Kevin R. Johnson, CEO of Starbucks

When two black men were wrongly arrested in a Starbucks in Philadelphia in 2018, due mainly to racial profiling on behalf of the employees and manager, the coffee house giant suddenly found itself at the center of a heated argument about racism. Such was its magnitude, the event threatened to damage the reputation, and maybe even future, of Starbucks indefinitely.

However, for the most part, Starbucks avoided any long-term damage thanks to CEO Kevin R. Johnson, who followed the McKinsey rulebook to a tee.

  • First, he apologized – sincerely, unreservedly and on multiple occasions.
  • Next, rather than throwing the branch manager under the bus, he took personal responsibility for the events and acknowledged that improvements were required.
  • Starbucks management quickly assimilated all available information, reviewed their options and acted decisively.
  • Within a week, Starbucks announced that almost all of its 8,000-plus US stores would close for an afternoon while 175,000 employees received racial-bias training.

We can argue about the success of this training and lament that it was even necessary, but by following the CEO-in-a-crisis template, Johnson changed the narrative and Starbucks came out on the other side. 

Carsten Spohr, CEO of Lufthansa

To describe the events in which a suicidal Germanwings pilot deliberately crashed a plane, killing 150 passengers and crew as a crisis downplays the size of that tragedy. Again, the CEO of Lufthansa, the parent company of Germanwings, genuinely and profoundly apologized over and over, expressing enormous emotion and empathy with the victims and their families. Lufthansa’s gentle and protective treatment of the victims’ families undermined their compassion – actions can speak louder than words in difficult times.

When addressing the public and his employees, Carsten Spohr was honest, describing the crash as “our worst nightmare,” and, just like Jacinda Ardern, he made swift policy changes to ensure that a similar tragedy could never happen again.

Ed Stack, CEO of Dick’s Sporting Goods & Rose Marcario, CEO of Patagonia

So let’s end with two more uplifting examples. While some crises are immediate and apparent, dominating news channels 24/7, others are subtler and more enduring. Dealing with these takes talented but also brave leaders who are willing to lead by example literally.

Despite the sale of firearms accounting for a significant portion of his company’s profits, the CEO of the US retailer Dick’s Sporting Goods persuaded his board to stop selling guns and ammo in their stores in response to the tragic rise in the number of school shootings over the past few years. Rather than do the popular or strategic thing, Ed Stack decided he and the company had a moral imperative to be a part of the solution.

‘Moral imperative’ could be the title of outgoing Patagonia CEO Rose Marcario’s autobiography. Under her watch, Patagonia has sued the Trump Whitehouse for reducing the size of Utah’s Bears Ears National Monument. The company has committed to only providing custom clothing for companies that have a compelling sustainability plan. Plus, Marcario donated the US$10 million in savings that Patagonia unwillingly received due to tax cuts the company disagreed with to non-profit organizations dedicated to fighting climate change. 

While taking a stand on environmental issues, Marcario has overseen the unprecedented growth of Patagonia. It would be cynical and unfair to Marcario to say that great leaders turn a crisis into an opportunity – Patagonia has always been a brand based on strong environmental values. However, influential leaders certainly see a crisis as not just something to survive but as an opportunity to improve. 

At a time when large portions of the world have lost faith in our political leaders (except in New Zealand, of course), brands and organizations can go beyond the confines of business and show both employees and the wider population how we can face up to and navigate these extraordinary times.

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