Leadership in Crisis

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Leadership in Crisis

The Covid-19 pandemic is very different from past crises.  The ongoing global health emergency is being seen as a turning point in the history of human civilization. Consequently, it is reorganising social and economic norms and driving us into a new human era.

The world over, governments, communities and organisations have become apprehensive and neurotic wondering how to face the economic, social and other problems caused by the pandemic. They all are looking for proper guidelines from their leaders. The previous world order is gradually collapsing which may lead to a breakdown or breakthrough of our organisations, entities, and systems and it all depends on our leaders in how they will find a new avenue. Effective leadership always rises up during a crisis. It is the time for real leadership to create new systems, overcoming individuals’ limitations and fears and boost their performance.

Speed should be the ideology of new leadership, and time is a leader's enemy in a crisis. They need to be responsible and revert to ‘jet speed’. When a crisis emerges the usual business processes and decisions need to be suspended and decisions must be taken in ways that reassure key stakeholders that a company and its leaders understand that a) there is a problem and that b) they take it seriously and take steps to address the problems.

The concept of “The Golden Hour” is used by management professionals for crisis response. The Golden Hour denotes not to a particular period of time, but to the observation that incremental delays in responding to a crisis – whether a medical emergency, a flood and natural calamities or corporate setback – have greater than incremental impact on the outcome.  

Let’s look into a crisis response in the McDonald’s Corporation. The US multinational fast food chain’s 60-year-old CEO James Cantaloupe died of a heart attack in the morning of April 19, 2004. At 8.07 am the same day, the company issued a press release about his demise that led to a sharp decline in McDonald’s stock price. But at 10.42 am, just over two and a half hours after his death, and right after 72 minutes after the stock market opened, the company announced its President and Chief Operating Officer Charlie Bell as the new CEO and Andrew J McKenna would be the board’s presiding director. The crisis management team/ the analysts spotlighted on McDonald’s future rather than its tragedy. This is a real example about how leadership, in a crisis, should rise beyond any catastrophe. The following morning The Wall Street Journal mentioned: “The swift decision gave immediate reassurance to employees, franchisees, and investors that the fast food giant had a knowledgeable leader in place that can provide continuity and carry out the company’s strategies…..”

The current pandemic seems to be an ordeal for leadership across the globe. Miller and Berk (2020) reported that by early spring 2020, 561 organisations had filed for bankruptcy in the United States of which 51 were retail organisations (Danziger 2020). This number kept rising daily. The missing part of the above report is the lack of preparedness among leaders to cope with a crisis of this scale, duration and complexity.

R.A Boin in his article, “From Crisis to Disaster: Toward an Integrative Perspective,” in 'What is a Disaster' states that a crisis can sabotage the corporate world and its workers. He further explains, citing Kayes, Allen, and N. Self that the main challenges during such a crisis are ‘unreliable information, situational novelty, unclear and shifting goals and ill-structured situations'.

The situation in our country is more terrible. Hundreds of thousands of people have lost their jobs and this situation is having negative mental health related impacts on many. It has been estimated that 60 percent of corporate houses in the country have not been functioning properly over the last one year. The government has replaced the prohibitory orders with the so-called ‘smart lockdown’. But Covid-19 cases have not come under control yet. Public health experts have warned of the possibility of a 3rd wave of the pandemic in Nepal. In the meantime, a growing number of media reports suggest that suicide cases are increasing rapidly across the country. The political leadership has completely failed to address the people’s agony. On the other hand, natural calamities like the Sindhupalchowk flood have caused tremendous loss of lives and damage to physical infrastructure.

At a time of crisis like in present, organisations unexpectedly fall into unimaginable disturbances. Re-opening, recovering losses and retaining employees are the main focuses of corporate houses keeping crisis management code into consideration. Consequently, employees are at a great risk in a number of ways, one being the traumatic experiences in terms of dealing with the complexity and adapting to the new reality of the work-life balance. They need psychological counseling, emotional and interpersonal support. They also need supervisory support, psychological empowerment, positive reinforcement and appreciation of work, and regular communication from the leaders during these circumstances of the Covid-19 pandemic.

Effective crisis response is needed to face the existing predicament. Quick response to the crisis is not only a concern of protecting the reputation of an organisation. It is also necessary to get on with the operations of the organisation faster and effectively. Let us consider some points regarding crisis preparedness:  
•    Developing an early warning mechanism/ rapid deployment capability.
•    Assigning a senior executive as responsible for emergency preparedness and response.
•    Making executive members accountable and provide sufficient resources to conduct a thorough analysis of vulnerabilities, crisis response strategies and crisis implementation.
•    Authorising executives to take initial responsive steps.
•    Most importantly, to coordinate all functions of the crisis response with frequent meetings, conferences, interaction, flow of information and smooth communication.

The strategic role of the human resource department can play a big role to assist and develop leaders during this pandemic by keeping the following into consideration:
•    Providing strong and reliable ground date;
•    Expanding their professional network;
•    Promoting innovation.
•    Ensuring employees’ continued learning.
•    Facilitating regular meetings; and
•    Creating platform to celebrate employees.  

(Koirala is a PhD. scholar. He can be reached at [email protected])

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