While leadership as a quality can manifest itself in many ways, it’s perhaps most apparent when things become difficult, the pressure increases, and the leader and his or her staff is up against it. How a leader behaves then often serves as a true waterline of his or her effectiveness.
As scholars of crises, crisis management, and leadership, Erika Hayes James and Lynn Wooten, in their book Leading Under Pressure, observe some points about crises (current as well as those from times past), and the rippling effect they can have. Through an intricate weaving of theoretical, empirical, and practical ideas associated with the concepts of crisis and leadership, they present a comprehensive perspective that can guide the business academic community toward continued study in crisis leadership, challenge students to prepare themselves for a new leadership form, and provide a road map for practitioners and executives to traverse as they continue to navigate the ever-increasing challenges of leading today’s organizations.
First, crises are inevitable. Some may be avoided and some may be managed well enough to limit long-term damage, but at the end of the day, every organization and even every nation will experience at least one crisis. For example, throughout the late 1990s and well into the 2000s, several American businesses were characterized largely by crisis and scandal. Among the most notorious were the financial and ethical mismanagement of Enron Corp. and WorldCom. And financial scandals aren’t the only disruptions that have, at one time or another, rocked corporate America. In fact, throughout history, leaders of firms and their various stakeholders have had to deal with a host of challenges ranging from the mundane to the severe. However ordinary or commonplace these challenges may seem, they are nonetheless problematic, and, if left unattended or if they become subject to public scrutiny, they can escalate into a crisis situation with the potential to harm, sometimes irreparably.
Second, it is often the handling of a crisis that can lead to more damage than the crisis itself. Crisis leadership entails a complex set of competencies that leaders must adopt if they are to steer an organization through the various crisis phases and into a successful recovery. When these competencies exist within a firm’s leadership, the likelihood of a firm becoming resilient after a crisis is greatly enhanced. A leader’s ability to build a successful crisis-management team is also important; some of the advantages include an ability to generate more information, stimulate creativity, and expedite decision-making.
Third, effective crisis handling involves much more than good public relations. Although this certainly helps, rhetoric and positive spin alone will not solve even one of the crises described in the book, much less the lot of them. Leaders must establish a norm of open and honest communication, and be appropriately candid about all aspects of the business, in good times as well as bad. Doing so can go a long way toward building a culture of trust. Moreover, information flow to various stakeholders will occur more easily when there is a norm or expectation of communication and an infrastructure that supports communication efforts across organizational levels, departments, and other boundaries. For example, developing capabilities for managing a crisis in a global context requires a mindset and integrated support system that can quickly bring together and mobilize stakeholders from different parts of the world to resolve the crisis.
Fourth, learning from crisis is the best hope for preventing repeat occurrences. James and Wooten use discrimination lawsuits as a specific type of crisis on which to build an argument with respect to learning, primarily because of the continuing significance of diversity in organizational theory and the practical implications of diversity for managers and the organizations they lead. Learning from crises provides an excellent opportunity to challenge the organizational routines that may stand in the way of excellence. Further, firms that can engage in learning can develop an organizational memory that helps to prevent future problems.
Finally, crisis events can create a potential for significant opportunity to be realized for individuals, organizations, and countries. There are numerous examples of people and organizations that have adopted a more optimistic frame of mind in response to threat. Consequently, what these individuals and organizations do in response to crisis is worth examining. It is possible that the ideas set forth in the book will combine interactively, and not simply additively, so that each of the events in the chain may need to occur for leaders to perceive crisis as opportunity.