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General Interim Management & Executive Support Rescue, Restructuring & Recovery

What are the qualities and role of a leader in times of business crisis?

It is a rare business that will never face a crisis and it is estimated on average this is likely to happen every four or five years.
Aside from unexpected events, such as natural disasters, a crisis be anything from a financial problem to a massive data hack, to potential reputational damage arising from inept handling of customers or stakeholders or even a product liability issue.
Effective handling of the crisis situation is crucial to the company’s reputation and in some instances to its very survival.
While those affected by the crisis will most likely look to to directors and managers for guidance, they are unlikely to be effective without leadership and clear messages from their CEO personally.

How should leaders manage a business crisis?

eadership in a business crisisWhile it is important to have appropriate systems and procedures in place for crisis management leaders can only be effective if there is a clear strategy based on a careful assessment of the situation. Often this requires scenario planning well ahead of any crisis so that early action can be taken.
The directors and managers will not be speaking with a unified voice unless they are given clear direction by their CEO.
The CEO should set the tone, and this may include acknowledging that mistakes have been made along with clear guidance on what statements can be made publicly about what the business is doing to address the situation.
So, the first step is for the CEO to ensure that the directors and managers are delivering the right message.
To do this, a crisis management team is needed, one with situation specific skills to deal with the crisis and with the communication skills to get the CEO’s messages out to all stakeholders.
Empathy without emotion will help deal with those affected when people are scared and key people need to be involved so that decisions are made and implemented while at the same time acknowledging the fear and pain among those who are affected.
The CEO should remain positive and reassuring, dampening any understandable urge to resolve the situation immediately, which is not always possible. The steps that need to be taken should be understood and wherever possible communicated to all those affected as well as to those responsible for dealing with the crisis.
An effective leader needs to be both self-aware and have a large measure of self-control.
They will need to demonstrate an understanding of others’ feelings while at the same time remaining clear-headed and focused on dealing with the crisis. This will mean fostering teamwork to minimise conflicts among crisis team members, internal staff and external stakeholders and ensure everyone stays on track during the process of handling and overcoming the crisis.
The objectives of any crisis management project are normally to minimise disruption and minimise reputational damage with the aim of restoring normal operations as quickly as possible. However all too often a focus on minimising costs and apportioning blame gets in the way and leads to a consequential fall out and a long-term damage to reputation.
Leaders take tough decisions which sometimes will need investment of time and money in resolving a crisis rather than running scared themselves.

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Business Development & Marketing General

Leaders with self-awareness are more effective

great leaders Nelson MandelaAnalyses of the characteristics of a good business leader have tended to focus on qualities like toughness, determination, intelligence and vision.
However, there has been a growing body of thought, first pioneered by American psychologist and author Daniel Coleman in 1995, that the truly great business leader is one who also possesses emotional intelligence.
Emotional intelligence is a combination of empathy, social skill, self-awareness and self-discipline, the so-called soft skills that distinguish the most effective business leaders from the merely good.
It should be no surprise that the business leader with self-awareness is the one most people would like to work for and the one who is generally the most productive. It is obvious that people will go further and work harder for someone who, they feel, listens to them, respects them and shows that their contributions are valued.

Developing self-awareness requires honesty

Using a SWOT analysis of yourself can be helpful as a way to identify which soft skills you have and which may be lacking or need more work.
While you may find that one of your strengths is to be a good communicator, for example, and therefore able to get your message across, are you also a good listener?  This could be a weakness that might need further developing.
How about your ability to negotiate? Managing conflict and producing a successful resolution is a key skill for effective leadership.
It may be that some of your behaviour goes back to incidents or past experiences, even from childhood, that have resulted in self-protective behaviours that you may not even be aware of. It can be useful to think over significant incidents in the context of the SWOT analysis and see whether they represent weaknesses or threats to you that have resulted in blind spots or destructive emotions.
While some of this analysis may be painful, and all of it requires you to be honest with yourself, once you have identified your weaknesses and threats, practise will help you to develop those areas where you feel you are lacking.
If you want to be a truly effective leader cultivating, refining and developing your self-awareness to improve your communication, management and motivational skills will be time well spent.
Remember, she, or he, who shouts loudest or is the most ruthless doesn’t ultimately get the best results.

Categories
Business Development & Marketing General Interim Management & Executive Support Rescue, Restructuring & Recovery Turnaround

Where can a business leader turn for support?

It is, as we have said before, important that the owner/MD/CEO of a business is focused on strategy and leadership, but this can be a very lonely place.
There is also the danger of becoming isolated or out of touch if the position prevents people from offering ideas and input into strategy development.
So how can a business leader stay in touch and where can they find support?
The traditional way is to look outside a business for support; however there is another source that might be considered.
There is an inspirational example in Paul Walsh, the former CEO of the drinks company Diageo. He used to pretend that he was not the boss and ask other executives what decisions should be taken.
The purpose was to encourage them not only to have the confidence to speak up when necessary but also to question him when they had more knowledge than he did.
This is a great example of a business leader involving subordinates in strategy development. It achieves a number of key objectives for any company; it builds a sustainable long term business by accepting input from everyone; it develops managers and prepares them for leadership; it establishes a culture of valuing people and their role in shaping the future; and it ensures that a CEO/owner does not become isolated.
Please share other examples of best practice by leaders who have inspired you.