10 Steps on How to Handle a Crisis as a Leader:
Whether you are leading an ambitious startup, a company that is ticking along nicely, a company pivoting and changing direction or pace, or managing a turnaround situation – crises (plural) come with the territory. Some crises, like wars, financial volatility, pandemics, supply chain challenges and industry-wide issues, are external; some are internal, inherited or self-inflicted.
Crises are abrupt negative security, economic, political, or environmental changes.
When and how a crisis appears can be a surprise – but they are coming. Often, they arrive in gangs – loitering together in a dark alley and then moving threateningly towards you – they have no respect for appropriate intervals, convenient timing or your schedule. They don’t stick to office hours. Jamie Dimon shrugs: “A crisis is just a thing that happens”.
As a leader, you must have plans in action and resources allocated when a crisis happens. Some of these things are predictable. Some can take months to address. Some can be over in hours. A long crisis will need dedicated resources – including time and attention from the leader, depending on the scale and impact of the crisis. Tony Hayward didn’t get much time to focus on anything for months, apart from Deepwater.
Handling a crisis is a leadership test – for the leader and those watching the leader. It is a great opportunity to demonstrate resilience, grow in confidence, and show your team and others why you deserve the job.
Experienced leaders are often more emotionally prepared to deal with a crisis because they’ve done it before and are battle-hardened. Battle-hardened may appear an overly dramatic word until you’ve been through a crisis and operated under live fire. Your ability to handle stress grows over time – it’s a bit like growing muscle or endurance. If you’re thrown in at the deep end, a coach or mentor is essential.
I have been the beneficiary of multiple coaches and mentors. I wish I could say thank you to them all. I had two mentors when I took over a small industrial subsidiary group with three companies in two locations. My first mentor or coach was the mother group’s owner – the second was a neighbouring businessman who became a close friend.
All three businesses were in trouble to varying levels, and I was the guy on the ground. I ended up leading these three teams totalling circa 140 people for three years. For the first 12 weeks, crises came at me every day like large, fast hailstones, with the odd meteorite thrown in to make me pay extra close attention. They just kept coming. The pace was relentless. Things got better over the next 9 months, some days went by without someone saying,” Boss, we have a problem.” But crises still exploded onto my desk every week.
Sometimes, when a new “issue” landed on my desk, I’d utter a laughing/crying/swearing grunt and say, “What now?”. There were financial and cash flow issues, people issues, customer issues, quality control issues, and dealings with the local authority and the taxman. It was a turnaround situation, so everything was heightened and overdramatic – the death threat helped.
I was lucky that the company’s owner always answered my phone calls. The group had its own issues, but he knew I was 31, on my own, operating in a second language and a bit clueless. He pivoted as fast as he could, from telling me what to do to asking me to identify my options and helping me evaluate those options on the phone. They were his companies, but he trained me to think for myself. The phone calls slowly became less frequent and went from several a day to a few times a week, then weekly, then fortnightly. Panic turned into a process. I copied and pasted this “shit happens, let’s fix it” approach with my teams, and within a year, they only escalated big things to me. This was good – the first 12 months were intense and exhausting – my bandwidth was stretched.
I was also super lucky because I couldn’t do anything in this group of manufacturing companies except lead. I read a quote at the time that said, “Successful managers ruthlessly delegate everything that does not exclusively belong to the management function.” This was easy for me because I didn’t know anything about the manufacturing process in the three companies – all I knew was a bit about people and leadership. I learnt about cash flow and external stakeholder management damn quickly. I had to delegate everything I couldn’t do – and all I could do was lead. A major advantage! Leaders who can do everything within their business need extra discipline to delegate. That’s very tough.
As my diary freed up, I spent more time thinking about the business and improving it, making it more efficient and improving systems and processes. I canned low-margin work, sacked bad customers, negotiated with suppliers and improved our margins. Most new leaders must first let go and ruthlessly delegate to find dedicated time for strategic thinking and firefighting.
Having allocated and scheduled free bandwidth and diary time for putting out fires is key for a successful leader. If no crisis turns up – thoughtful time with a pen and a pad is never wasted.
You must move on from your former role and get your leadership shoes on. You’re a leader now – no longer a doer, executer or carry-outer. Leading is your job.
1. Stay Calm and Composed in the storm
Your team will look to you in a crisis for guidance and stability. They need reassurance from you and calmness. They need to delegate their anxiety to you before continuing their work. Regulate your emotions and retain a cool composure, remember you are being watched as a leader, and your team wants and expects you to lead. Breathe, stay focused, and project an aura of confidence – even if you don’t have all the answers right away. Fact: you almost certainly won’t. I didn’t. But nobody needed to see my alarm and anxiety.
2. Gather Information and Assess the Situation
Understanding the full scope of the crisis is crucial. Gather all information on the crisis, this will allow you to assess the situation with an open mind. Understanding the crisis at its roots – the causes and the impact – allows a leader to make informed decisions on handling events effectively. This is easier said than done, but responding knowing more is far better than reacting knowing less.
3. Communicate Transparently
Clarity of thought and clarity of comms. Open and honest communication is paramount during a crisis. Keep all your key people informed of the ongoing situation; the more people on your side, the greater support you have for the moves you make. What you communicate will (should) ripple down, but it’s good to widen the audience, and over-communicating is forgivable – under-communicating is dangerous. Transparency builds trust, even if the news is not positive. People are weirdly okay with bad news if they trust the leader and the leader explains the plan. Be prepared to communicate regularly as new information becomes available.
4. Assemble a Crisis Management Team
You don’t have to tackle a crisis alone. You probably can’t. You definitely shouldn’t. Form a crisis management team comprising key leaders and experts within your organisation. Collaborate with a diverse team of cross-company minds to establish varying possibilities to tackle this crisis, the more perspectives and possibilities, the merrier.
5. Develop a Crisis Response Plan
You should have a crisis response plan before a crisis hits. However, if you don’t, start developing one – today is a good day for that. This can be a generic plan or tailored for certain likely scenarios. Having a communications plan and protocols reduces chaos and confusion during critical moments. It also reduces reaction time and reduces the decisions to-be-made pile. Decisions demand bandwidth – freeing up bandwidth is always good.
6. Prioritise, Delegate, Review frequently
During a crisis, it’s easy to feel overwhelmed by the sheer number of tasks and decisions. Prioritise the most critical issues and delegate responsibilities to your team members. Delegating problems and tasks allows you, as a leader, to focus on the most pressing issue. Review what you’ve delegated more frequently than normal – things keep changing, and you need to be aware and your team may also need the extra reassurance.
7. Be Adaptable and Flexible
Crisis situations can evolve rapidly. New information will be thrown out constantly, so be prepared for anything. You’ll find navigating the earth moving under your feet easier if you retain a flexible, open mind and keep on evaluating your options.
8. Show Empathy and Support
Remember that your team members may be/probably will be experiencing stress and uncertainty during a crisis. They are human, with human emotions. Acknowledge the impact of the crisis, label it and show empathy when and where needed – that is the highest form of being a good leader. Give your team a break. Let them decompress.
9. Learn from the Crisis
Every crisis is an opportunity for growth and improvement. Throwing money at a problem is often the only option, but you don’t want to be doing that for the same problem multiple times. Once the crisis is under control, conduct a thorough debriefing. Analyse what went well and what could have been handled better. Learn from any mistakes and make the changes needed to prevent similar crises from happening in the future.
10. Plan for the Post-Crisis Phase
Even after the immediate crisis subsides, there may be a long road to recovery. Try to regain your company’s sense of normality, this might mean reaching out to those affected by the crisis, both internal and external, and rebuilding key relationships.
Stay calm, communicate transparently, and lead with empathy. Crisis management is about surviving the storm and emerging stronger and more prepared for whatever challenges lie ahead. Anyone can lead when everything is going well, although not everyone does. True leadership shines brightest in the face of adversity.
Leading in a Crisis – Need Help?
Imagine having someone in your corner to help you handle almost any crisis. Who knows you and your environment, who you can trust and who is totally on your side. Learn more a about a consiglieri/coach relationship.