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Leadership in times of crisis

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The true test of leadership, as they say, is adversity.

When everything goes according to plan, or when profits come and grow and employees feel content in the company, playing the role of a leader may seem to run smoothly. However, when a significant crisis happened and plans went sideways for the organization, leaders are tested and need to review the roles they play.

Business leaders surely have experienced being put to the test during the COVID-19 pandemic, which plagued the world with health and economic crises. The new normal disrupted the business-as-usual as the workforce transitioned to a remote setup for safety reasons and urged organizations to reassess their plans and brace for the pandemic’s  potential impact.

The COVID-19 crisis, like other major adversities, pushed leaders to step up for their people and businesses.

A crisis of a similar extent like the pandemic affects the personal lives of employees aside from their work. According to management consulting firm McKinsey & Company, one’s own survival and other basic needs come first in people’s minds in a landscape-scale crisis. Hence, leaders must show their caring side toward their people.

This is what leaders in the “front-stage” role present, as called by Sameh Abadir, a professor of leadership and negotiation at IMD, in an article published in MIT Sloan Management Review — inspiring and assuring their teams as well as showing empathy and public commitment.

“A crisis is when it is most important for leaders to uphold a vital aspect of their role: making a positive difference in people’s lives,” McKinsey said in an article published on its website. “Doing this requires leaders to acknowledge the personal and professional challenges that employees and their loved ones experience during a crisis.”

McKinsey reminded leaders to understand that their people would have different experiences during a crisis. One of the instances brought about by the COVID-19 pandemic was school closures, which shifted students’ learning to be done at home. This required additional effort from working parents.

“Since each crisis will affect people in particular ways, leaders should pay careful attention to how people are struggling and take corresponding measures to support them,” the firm added.

But while leaders should inspire and deliver a message of hope to their people in facing the crisis, they should also be realistic and transparently communicate about the situation at hand.

In performing the “back-stage role,” as  also referred to by Mr. Abadir of IMD, leaders take “a blunt and realistic approach”  to the threats. “Behind the scenes, leaders gather information and expertise, share facts, and dive deeply into processes — whether financial, technological, or human — to adapt and follow through on their plans,” he explained.

McKinsey also remarked that leaders’ crisis communications usually hit the wrong note. Some leaders sound overconfident or upbeat, particularly early in a crisis. This may make stakeholders suspect what leaders really grasp about the situation and how well they deal with it. The firm also noted that the inclination to defer announcements for a long period of time to wait for more facts and decisions to be made may not also be reassuring.

“Thoughtful, frequent communication shows that leaders are following the situation and adjusting their responses as they learn more. This helps them reassure stakeholders that they are confronting the crisis,” McKinsey wrote.

Communications from leaders must not also stop even after the crisis, the firm added. “Offering an optimistic, realistic outlook can have a powerful effect on employees and other stakeholders, inspiring them to support the company’s recovery.”

Continuing role beyond the current crisis

Even though many business leaders might now know how to navigate the COVID-19 crisis and perhaps are already envisioning the post-pandemic world, some adversities could still impact their companies in the future. Deloitte’s 2021 Global Resilience Report found that 62% of the surveyed chief executive officers (CxOs) believed that occasional or regular disruptions of such magnitude could happen going forward.

However, only 30% of the surveyed expressed full confidence in the capacity of their organizations to quickly adapt and respond to possible threats. And only 34% of them feel ready to lead their organization through uncertainties that might come to pass. Nonetheless, these figures showed improvements among CxOs from its previous survey. Before 2020, only 21% deemed their organizations could swiftly respond to disruptive events, and 24% felt ready to lead amid such disruption.

According to Deloitte, the survey validated that “organizations that plan and invest in anticipation of disruptions… are better positioned to respond, recover, and thrive.” The report, which looked at how companies dealt with the turbulent events of 2020, also identified five attributes of a resilient organization. Such traits include being prepared, adaptable, collaborative, trustworthy, and responsible, which business leaders can foster to build a greater resiliency within their organizations.

“I think the pandemic has seriously affected the confidence of Filipino business leaders to respond and adapt to future threats,” Deloitte Philippines Risk Advisory Partner Jet Pampolina said in a statement. “But conversely, and perhaps unknowingly, this crisis has also equipped leaders with the mental toughness and agility needed to face the next big threat.” — Chelsey Keith P. Ignacio

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