Crisis leadership in the fourth industrial revolution: What's changed and how your organization can come out stronger

By Christine Pearson

Published: Oct 25, 2022 11:24:17 AM IST

Updated: Oct 25, 2022 11:45:53 AM IST

Clear and flexible crisis approaches that align with their organization’s core values not only help leaders persevere but also thrive despite and because of the challenges they overcome. Image: Shutterstock

Many organizations view crisis management as non-essential. In the past, crises were rare, improvisation was common, and leaders could typically count on days, weeks, or longer before their problems would be known publicly. Unfortunately, this perspective is obsolete. Increased globalization, hypercompetition, and technological advances have increased the prevalence, intensity, and visibility of organizational crises, pushing readiness essentials into the strategic core.

As an architect and thought leader of crisis management for more than 30 years, I’ve witnessed contextual changes, but nothing as dramatic as what we’ve seen in the past decade. Extreme shifts in the work environment are jarring the need to improve crisis readiness, detection, response, and learning, across organizations of all sizes worldwide.

Three Fundamental Factors Are Changing Crisis Needs

Three fundamental factors raise the bar for crisis management: hypercompetition, globalization, and technofusion.

Hypercompetition

Even before the COVID-19 pandemic, organizations across the U.S. and elsewhere reported higher turnover rates, lower employee satisfaction, and disengagement. In the last few years, staggering numbers of individuals have been leaving their jobs. In 2021, approximately 48 million people quit their jobs, and 2022 seems to continue along the trajectory of the Great Resignation.

Hypercompetitive approaches and high turnover leave many employees at all levels running on fumes. Trying to do more with less, quicker, cheaper, and better is one route to greater profits, but this approach has a devastating effect on people. Many who remain in the workforce are exhausted and disengaged. These conditions can drive rash decisions and actions, making organizations more vulnerable to crises.

Globalization

While globalization can bring many advantages, it also creates challenges for organizations as they navigate time differences, language barriers, diverse laws and regulations, transportation problems, cultural differences, political nuances, and more. In today’s global market, even small organizations can have an extensive footprint, working with consumers or suppliers worldwide. If organizations are not committed to taking the broader footprint into account, geographically distant sites may create extraordinarily weak links in an otherwise strong chain of crisis detection, preparation, readiness, and response.

Technofusion

Advancements in technology and communication make 24-hour information dissemination easier and faster worldwide. Today, a tweet from a disgruntled employee or dissatisfied customer may circle the world, igniting hostilities and recourse before the offending organization is even aware of the post. Although leaders used to have hours to evaluate, organize, and respond to a crisis before it went public, 15 minutes is a standard estimate today. More than ever, organizations must be ready before a crisis hits.

Also read: Go time: How leaders can learn to manage crises and uncertainty

How Can You Prepare for Crises?

No organization is immune to crises, but all can prepare. The increased prevalence, reach, intensity, and visibility of crises makes preparation a priority for leaders at all levels. Here are some things that you and your organization can do to stack the odds, keep people on your side, and buy time when you will need them most.

Learn about Organizational Crises

Like any organizational change, to improve crisis readiness, leaders must become champions of crisis preparation. Start by learning about organizational crises, especially those that are likely to occur in your industry and your geographic footprint. Read and discuss how other organizations prepare and what seems appropriate for your organization. Consider potential benefits for your organization, and its internal and external stakeholders, immediately and in the long run. Connect with others inside your organization and beyond who are working toward similar crisis preparation goals. Teach your team, and discuss what you learn.

Clarify How Your Preparations Align with Your Core Values

Your organization’s values should drive its crisis readiness. Start by identifying where alignment exists between your core values and your existing approaches and resources for crises. For example, which plans or resources will protect your key stakeholders? Use your values to weigh what matters most in crisis.

Your organization’s core values provide a solid and consistent foundation for crisis response, no matter what the nature of the crisis or where the effects are felt throughout your organization. Teach your employees at all levels to stick to your core values when difficult decisions must be made during the most trying times.

Treat People Well

Respect your employees, customers, and suppliers, as well as your competitors and adversaries, with no exceptions. Treat your employees well to build and retain trust, engagement, and commitment. Listen carefully to your competitors and adversaries. You may learn a great deal about what is going well and what could put you in jeopardy, and you may find that some of these stakeholders will provide helpful resources, insights, or feedback during difficult times. Learn how to manage negative emotions – your own and others. Know what to do when you encounter anger, fear, and sadness, which are common impacts of crises.

Welcome Insights from Employees, External Stakeholders, and Suppliers

Stay open to learning from employees at all levels, as well as suppliers, consumers, regulators, local communities, and so forth. When signals emerge or trouble is brewing, go as close as possible to the source to gather more information. Do not expect to know everything. Be prepared to request help, delegate and collaborate across your organization.

Build a Crisis Management Culture

Aim to create a culture that embraces crisis management. Learn to celebrate mistakes. Welcome employees at all levels to share concerns or problems. Include representatives throughout your organization in crisis planning.

Train employees at all levels to spot potential problems. Make it safe to bring problems forward, without the pressure to bring the solution as well. Hold supervisors, managers, and executives accountable for moving forward information and action regarding reported signals and problems.

Also read: Leadership isn't about you—it's about everybody else

Engage in Continuous Learning

When a crisis or near miss has occurred, fine-tune current plans and procedures accordingly. Learn from what went well and what could be improved. Gather information about what worked and what didn’t. Celebrate the wins. Examine and improve the shortcomings. Incorporate lessons learned into your crisis detection, preparation, response, and learning plans.

Prepare for the Unexpected

I always encourage looking beyond the expected crises, whether local natural disasters or the most common crises in their industry. News reports or case studies from other companies and industries can provide grounding for invaluable discussion. They can provide obvious inspiration for crisis improvements within your own company, and they can help you stretch to creative possibilities and solutions.

Crisis readiness is fast becoming an essential element for organizational success. Hypercompetition, globalization, and technofusion spur the frequency, variance, and reach of crises. Clear and flexible crisis approaches that align with their organization’s core values not only help leaders persevere but also thrive despite and because of the challenges they overcome.

If you’d like to learn more about crisis preparation and response, my new book, Come Out Stronger: Embrace Crises to Stack the Odds, Keep People on Your Side, and Buy Time, takes a fresh look at crisis readiness, focusing on practical approaches for today’s workplace.

[This article has been reproduced with permission from Knowledge Network, the online thought leadership platform for Thunderbird School of Global Management https://thunderbird.asu.edu/knowledge-network/]