High Stakes Leadership: Leading in Times of Crisis

Credentials Link

This is a great 4 week course taught by Professor Mike Barger and offered by the University of Michigan. This course aims to prepare the company before Times of Crisis arrives as well as to set the foundations upon which improves the communication of the company with their stakeholders, knowing what they want, need and expect, especially in Times of Crisis. The contents of the course and experiences shared which are applied in real life situations are very enlightening and educative. I would highly recommend this class and would like to thank Professor Barger and University of Michigan for this opportunity.

Learning’s

-VUCA Business Environment (Volatile, Unpredictable, Complex, Ambiguous)
-leaders at all levels and in all roles within any organization must develop at least some degree of capacity for crisis leadership
-Effectiveness and high-stakes leadership depends largely on a leader’s ability to understand and appreciate the perspectives of various organizational stakeholders

The Conceptualization Model

-Understand how to prevent crises as it is to lead effectively during them with the concept of resilience

Fig 1. Exploring Crisis from a Receiver Perspective: Understanding Stakeholder Reactions During Crisis Events, Feduik, Coombs, & Botero, 2010. [Recreated]

-This model will not only be useful for understanding stakeholder reactions during a crisis, but perhaps just as importantly, it can help you predict how stakeholders are likely to react to a given scenario. If you can predict how stakeholders are likely to react to a particular situation —particularly  if that situation has some degree of likelihood — then spending time working through a few of these scenarios would help high stakes leaders in a number of ways: 1) They could begin to build generic response plans for certain types of situations; 2) They could identify gaps in crisis response capabilities; and 3) They could begin to prioritize the types of crises that would be most important to be prepared for.

Craft a Typology. It’s simply an organizing framework that will help us learn about different types of crises based on categories of characteristics. Public Perception. While almost all categories of crisis have some impact on public perception, some crises are driven almost entirely by changes in public perception. In these cases, trust is at risk and must be restored. When United Airlines dragged Dr. David Dao off of his flight, a PR crisis erupted. 

9 types of Business Crisis, Product Failure. Market Shift. Cash Shortage. Management Change. Merger/Hostile Takeover. Regulation/De-regulation. Human Capital. International Events.

Predictability-Influence Matrix
Probability-Impact-Matrix
Locus-Controllability Matrix and the Responsibility Continuum

The typologies you learned about in this module were not simply instruments for illustrating the spectrum of challenging scenarios you may have to face as a high stakes leader, they were provided as an introduction to a planning methodology that could be used to help your organization to significantly increase its readiness for future threats

Crisis investigators, typically assigned by a regulatory agency to determine contributing factors and root causes of a recent crisis, always include a summary of findings in their final reports

value propositions that your stakeholders have with your organization?

Enterprise Leadership. This group has a unique set of responsibilities and, in exchange for their leadership, they extract a great deal of value from the enterprise. During a crisis, their own interests are impacted in many ways.

Employees. Their jobs and livelihoods are at stake in an organizational crisis. What do they want to know? When and how do they want to know it? During a crisis, high stakes leaders will have their full attention.

Customers. Customers and suppliers exchange resources for the products and services of the firm and in return receive the benefits of the products and services. These stakeholders will be expecting value in exchange for something of value that will be or may have already been exchanged for it. In a crisis, not only will their expected value be at risk, but perhaps even their half of the exchange that has already been delivered.

Investors. Owners or financiers (which is really a better term) clearly have a financial stake in the business in the form of stocks, bonds, and other currencies. They, of course, expect some kind of financial return from their investments. In a crisis, not only are they concerned about the current state of their investment, but also the long-term value of it. 

Regulators. Governmental officials actually play a couple of different roles in their relationships with an organization, each of which will be threatened during a crisis. While all officials are elected or appointed to serve the interests of their constituents, some look after the interests of communities (e.g., mayors, governors, etc.), while others look after enterprise compliance (e.g., safety or legal officials). In a crisis, both versions of these regulators will have concerns and they will be looking for information to share with their constituencies.

Competitors. As we’ve established, this is an odd group to think of as a stakeholder. They are in many cases, however, impacted by the choices that a competing organization makes and the manner in which it manages a crisis situation.

Here is the full list of roles that crisis leaders must be willing and able to assume at their organization. Each will be explored in a bit more depth in the paragraphs that follow.

  1. Encourage a proactive crisis culture.
  2. Establish and enforce standards and processes.
  3. Prioritize and set an example.
  4. Properly assess the full range of risks.
  5. Promote open upward communication.
  6. Build relationships before the crisis.
  7. Be ready to deal with the news media.
  8. Encourage a learning environment and share experience.

BE. If you were asked to describe what a crisis leader should be during a crisis, what would you say? What should a leader be to instill confidence and deserve the trust of stakeholders? From our research, the most effective crisis leaders are:

  1. Visible. Stakeholders want to see them, in front of their teams, leading the response.
  2. Caring. The most effective crisis leaders are able to demonstrate a great sense of care and concern for all stakeholders.
  3. Empathetic. Not only must crisis leaders care for their stakeholders, they must appreciate that some have lost or will lose a great deal as a result of the catastrophe and that their loss deserves acknowledgment and empathy.
  4. Calm. Stress and fear produce anxiety in stakeholders. The most effective crisis leaders are able to remain calm, think clearly, and through their composure can help reduce stress and fear in others.
  5. Assertive. Not only do stakeholders want to be able to see their crisis leaders, but they want to see them doing something, to be asserting themselves, and working toward a solution.

What must leaders do during a crisis? They must communicate. Make decisions with limited information, take responsibility and engage stakeholders

KNOW. What do you want your crisis leaders to clearly understand – to know – in order to support your organization and its stakeholders during a crisis? In our research at Michigan Ross, we consistently hear that stakeholders want their crisis leaders to have a crystal clear understanding of three things:

  1. Organizational Vision. To be truly effective, crisis leaders should know, be able to articulate, and be able to align their crisis leadership efforts to the organization’s mission and vision. A portion of every stakeholder’s value proposition is attached to their belief in what an organization is trying to accomplish. Incorporating the organization’s vision and mission into a crisis response will resonate with stakeholders.
  2. Organizational Values. If an organization’s vision describes what it is trying to accomplish, then its values describe the way it plans to get there. A great deal of research has been done on the extent to which employees aspire to work for a company that shares their values. New research indicates that other stakeholder groups—particularly customers—want values alignment as well. In a crisis, stakeholders will be looking for an organization to “walk the talk”. This is best demonstrated through values-driven leadership.
  3. Guiding Principles. Crisis leaders will be required to make an incredible number of decisions with limited information. Many of these decisions will prove to be less than perfect over time as new information becomes available. This is not typically a product of poor decision-making, but rather, a function of the crisis environment. What can be done to improve this seemingly impossible situation from crisis leaders? We can help stakeholders understand how and why decisions are being made. The most effective crisis leaders create and share a set of guiding principles that can be used in the decision-making process.

Sample Crisis Management Checklists


Example #1. The first example is provided by the U.S. Department of Health and Human Services, Centers for Disease Control and Prevention. They have labeled this checklist as their Crisis Emergency Risk Communication (CERC) Immediate Response Checklist. It is available here.

Example #2: The second example is provided by Nancy Moorhouse, on behalf of the Insurance Thought Leadership group, in an article called What To Do In A Crisis: A First Hour Response Checklist. It is available here.

Example #3: The third example is provided by the Destinations International Foundation—a group dedicated to serving those who promote destination tourism. This simple but effective example of a transportable crisis response handbook and associated response checklist is available here.

Tabletop Exercise to Explore Crisis Readiness


At this link, you will find an example of a tabletop exercise. This particular example has been provided by the exceptional EduRisk unit at United Educators.

Koehn borrows from David Foster Wallace and defines an effective leader as one “who can help us overcome the limitations of our own individual laziness and selfishness and weakness and fear and get us to do better, harder things than we can get ourselves to do on our own.”

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