Key Traits for Navigating a Crisis

July 22, 2024 – The concept of leadership is going through a profound transformation. Traditional leadership paradigms, which tend to emphasize stability and incremental progress, aren’t adaptable enough to address the complexities of a more volatile work-life-community dynamic and global marketplace, according to a recent report from Signium. The study says that organizations are now confronted with much bigger challenges: global pandemics, economic uncertainties, climate change, geopolitical tension and massive societal shifts. At the helm of these organizations, leaders are expected to navigate uncharted waters with agility and discernment.

“Crisis management is not just about fighting fires,” said Sami Hamid, managing partner for Signium Austria/Romania and global industrial practice lead. “We need to do more than merely react to problems – we must invest in learning how to predict risks and be prepared for them.”

“When a crisis occurs it can be difficult to coordinate a response through the chaos, which makes crisis management protocols so important,” the Signium report said. “Crisis management operates most effectively when a strategy exists – one that identifies potential threats, helps to make swift decisions based on facts, and finds ways to maintain the company’s stability amidst the turmoil.”

“When leadership’s response to unexpected threats grows from being reactive to proactive, we’ve evolved from crisis management to crisis leadership,” Dr. Hamid said. “That sets a tone for the entire organization, giving people a sense of calm, confidence, and courage. Crisis management is useful. But crisis leadership is powerful.”

The report points to one company that takes a proactive approach to crisis management, General Electric (GE). Their leaders are offered crisis management training and are required to actively analyze case studies to understand the dynamics of past crises both within the organization and outside of it. Perhaps of greatest impact, GE’s Corporate Executive Council (CEC) conducts extensive simulations and role-playing exercises to prepare their leaders for various crisis scenarios. These range from simulated financial downturns and operational disruptions to public relations challenges.

“GE shows us the value of preparedness,” said Dr. Hamid. “By combining rigorous training and real-world experiences, they ensure that their leaders are well-equipped to not only handle a crisis but to pre-empt it and, wherever possible, utilize it for the good of the company. Some might feel that crisis leadership is like constantly preparing for the worst and ask why it matters.”

It Minimizes Losses 

The Signium report notes that when a crisis occurs, time is of the essence. “It’s important not to be unresponsive or give the impression of inaction,” the report said. “Effective crisis leadership involves responding thoughtfully, not just engaging in empty actions. Exceptional leaders evaluate the situation, formulate a plan, gather necessary resources, communicate the strategy, and take action. Although they may not be able to undo the problem, they can mitigate its  effect.”

It Safeguards Your People 

While dealing with the crisis and its impact, employees may be emotionally vulnerable and experiencing decreased morale. “In extreme situations, leaders may even be working to ensure their people’s physical safety,” Dr. Hamid said. “Leaders who are prepared for crises acknowledge their duty to prioritize employee safety and welfare first, and business interests later. These leaders empower employees to participate in crisis management by offering essential resources and transparent communication.”

Related: Leadership Traits That Matter in Times of Crisis

It Prevents the Next Crisis 

Leaders who invest in crisis readiness actively look for potential crises. “This proactive approach may involve addressing known risk areas like cybersecurity or preparing for unpredictable events like severe natural disasters,” the Signium report said. “During a crisis, strong leadership instills confidence in employees and stakeholders, enabling swift responses because they trust the plan and have received clear communication. This trust can extend beyond the immediate crisis, empowering the workforce to identify and address future crises promptly, sometimes allowing them to prevent them from happening altogether.”

Five Behaviors That Characterize Crisis Leadership 

Jorge Paulo Lemann, CEO of 3G Capital, once said: “Crisis is like a rolling ball. It either crushes you or forges you stronger.”

Sami Hamid is an expert in leadership assessment projects and has managed more than 600 executive search assignments for clients in Western Europe, CEE, the Middle East, and Asia. He relies on a broad functional experience, ranging from executive board assignments to all other C-level functions and supervisory board positions. At Signium, Mr. Hamid focuses on search mandates for C-level positions in real estate, industrial and digital, as well as on all aspects of leadership advisory. As global industrial practice group co-leader, he leads worldwide activities across the wide industrial sector.

“Communities and regions that have less exposure to crises may consider themselves fortunate, except that the lack of real-world experience could prevent them from developing powerful leadership skills in response to turmoil,” said Dr. Hamid. “When a crisis does strike these communities, it can be crippling. Ironically, the organizations that typically respond to unforeseen events with a light-footed agility are those that confront crises more regularly. This is because they’ve faced the proverbial rolling ball enough times to have forged a robust range of crisis leadership behaviors and preparedness tactics.”

Signium proves a few of the top behaviors that the leaders of tomorrow should cultivate to navigate challenging times:

1. Demonstrating Self-Mastery .

Maintaining composure and self-discipline is crucial for a leader dealing with a crisis. In such situations, leaders must consciously cultivate a calm mindset, the report explains. Lacking self-control leaves leaders vulnerable to their emotions, which affects their teams too. In times of crisis, despite intense stress, leaders with self-mastery can channel it productively to maintain high energy levels and positivity among their teams. The result? Effective leaders can transform threats into opportunities for learning, innovation, and optimism.

2. Making swift decisions 

Individual decisions affect your own life, while a leader’s decisions impact the individuals they work with, their team, and the organization they belong to – sometimes, even the communities around them, according to Signium. No one feels this pressure more than leaders themselves.

Organizational crises require leaders to:

• Process information efficiently

• Prioritize effectively and fairly

• Confidently make decisions for the good of the company and its people

3. Adapting with change 

When it comes to crisis management, resilience is the single most important quality that a leader can demonstrate, the Signium report notes. Resilient leaders adapt to the environment, being unafraid to pivot their strategies in response to disruptive changes. One example of this is the hospitality brand, Airbnb. During the Covid-19 pandemic, the travel industry plummeted. Faced with the risk of total catastrophe, Airbnb shifted its offering to include online experiences and longer-term stays. This incredibly smart and resilient move ensured Airbnb’s business continuity and supported its global host community.

4. Leading with confidence 

Signium also notes that when faced with a crisis, people turn to their leaders for guidance as one might turn to a compass when lost. A leader who is panicked or fearful will inspire the same in their followers.

Related: 4 Lessons on Leading Through a Crisis

The report offers some ways that growing leaders may develop confidence include:

• Practice emotional intelligence

Recognize your emotions and acknowledge how they might influence your actions. Choose with intent how you want to respond to or use those emotions for the greater good.

• Be receptive to other people’s ideas 

Confident leaders aren’t threatened by different perspectives but are open to allowing others to interpret the crisis differently, and influence the decisions they need to make.

• Prepare constantly 

The greatest confidence a leader can wield comes from being prepared. Viewing present circumstances through the lens of preparing for the future is key to developing resilient, robust next-generation leaders.

5. Taking care of others 

According to a Harvard Business Review study, contentment raises nearly every business outcome: sales increase by 37 percent, productivity by 31 percent, and accuracy on tasks by 19 percent. Similarly, creating a safe and engaging workplace for your teams can bring out the best in them during challenging times.

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Dr. Hamid adds: “Crisis leadership is always about people first. It’s where empathy meets strategy, whether it’s ensuring employee well-being, consumer safety, or community stability – the organizations that come out on top of a crisis are the ones that prioritize people. That’s why executives with people-centric skills and qualities are so well-suited to crisis leadership.”

Finding Freedom to Flourish Amidst Troubling Times 

Resilient, human-centric leadership helps organizations navigate storms to the best possible outcome, according to Dr. Hamid. “It’s possible to develop these skills from within the business via a multifaceted approach,” he said. “Companies can invest in training programs that focus on building emotional intelligence, fostering adaptability, and honing strategic decision-making skills. However mentorship partnerships remain one of the most effective methods of raising the next generation of crisis-ready leaders.”

“With the world being as unpredictable as it is, organizations should dedicate time and energy to understanding the potential risks their businesses face and developing strategies to circumvent those risks,” the Signium report concludes. “Without question, the greatest component of those strategies is the question of who – who will lead your organization through its next crisis?”

Related: 7 Ways To Build A Stronger C-Suite Leadership Pipeline

Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor  – Hunt Scanlon Media