Leading through a crisis: how to keep yourself and everyone else going when things go wrong

Dealing with crisis is an increasing reality for leaders at all levels. Brian Hartzer offers tips to help you navigate your organisation – and yourself – to safety

As the events of the past two years have made abundantly clear, business leadership inevitably requires a level of crisis management.

Over my 30-year career in banking I’ve had to navigate my fair share of crises, including:

• economic recessions and the global financial crisis
• board governance crises and leadership team defections
• technology outages, cyber-security events, and labour disputes
• terrorism, hold-ups, kidnappings, protests, and coups
• earthquakes, floods, tsunamis, volcanoes, hurricanes, bushfires, and a pandemic
• political and regulatory interventions, a Royal Commission, and class-action lawsuits
• a regulatory compliance crisis that ultimately cost me my job

From experience, here are a few suggestions about how to keep yourself – and everyone else – going when things go wrong:

1. Lay the groundwork
2. Recognise changing needs
3. Communicate with empathy
4. Be decisive.

1Lay the groundwork

In a crisis, it’s critical for leaders to remain calm and objective. If you feel defensive about what caused the crisis or fear losing your job or reputation, then you may not make the best decisions.

At a personal level, laying the groundwork means separating how you see yourself from how you see your career success. There’s a lot of randomness in life, and in business: The unexpected nature of most crises means that, despite good intentions and hard work, things can still go wrong.

When I became CEO of Westpac, I knew that the privilege of leadership comes with accountability: I may not have caused an issue, but as CEO I would still own it and may have to “take the fall”. I prepared myself emotionally for this possibility by frequently reminding myself of this fact and having a list of things to do in the future if it did.

Because I had prepared in this way, when a major regulatory issue arose (that ultimately led to my departure) I was able to remain calm and focused on what actions we needed to take to fix the issue, rather than becoming paralysed by what it meant for me.

At an organisational level, laying the groundwork means building employees’ resilience to stress and uncertainty. Ideally, this needs to be done by building engagement before the crisis hits: When people feel valued and engaged, they will be more resilient to challenges and setbacks.

Being upfront with people about potential risks can similarly prepare them to stay focused when they do emerge.

One good way to do this is through scenario planning. Brainstorm the potential surprises that could hit your organisation, and then role-play those surprises on a regular basis:

• If this happens, what would we do?
• Who would be responsible for doing what?
• What else could go wrong during this scenario, and what would we do then?
• What choices would we have to make, and how would we make them?
• How would we communicate to our employees and stakeholders?

By practising your crisis response in as real a situation as possible, your team will become calmer and more prepared to think clearly when a crisis does arise.

At the same time, you’ll identify specific steps – stockpiling supplies, locking up partnership support, pre-drafting standard communications and checklists – that will help you reduce the impact of many situations, even if you can’t fully predict the nature of what will hit you.

2Recognise changing needs

Maslow argued that an individual’s motivations rise from physiological and safety needs (food, water, security) through psychological needs (relationships, love, prestige) and finally to ‘self-actualisation’ (achieving one’s full potential). Only once the lower needs are met does the individual’s focus rise to the next level.

In times of crisis, people may experience threats that they haven’t worried about for a while (e.g., family health and safety, job security). And these threats may not affect the leader in the same way. So, it’s critical that leaders take time to identify how different groups and individuals may be experiencing the crisis.

For example, in Australia the annual bushfire season often wreaks havoc in regional areas, destroying lives, homes, and livelihoods – while leaving most urban areas relatively unaffected. Bank employees living in regional areas are often affected in multiple ways – both as residents whose homes, families, and friends are at risk, and as bankers trying to help anguished customers get back on their feet.

The world is still grappling with the dangers and uncertainties of the COVID-19 pandemic. In this environment, organisations that can provide flexibility and job security to employees with a mortgage or other substantial commitments may find that loyalty and motivation increase despite reductions in pay and other forms of recognition.

3Communicate with empathy

In a crisis, it can be tempting for leaders to focus purely on the urgent commercial aspects of their situation. Leaders may not believe they have time to provide context or to worry about people’s feelings – they need to act.

Focusing on the issues at hand is good practice for leaders in times like this. But that doesn’t mean you can’t – or shouldn’t – make time to communicate frequently to your people.

Good communication gives people the strength and hope to carry on, as well as the belief that the effort is worth it.

There are four elements of an effective message during a crisis:

• Tell it straight.
• Tell it with empathy.
• Put actions in context.
• Give people some control.

Tell it straight

You may not have all the answers. That’s okay. As clearly as you can, state:

• what you do & don’t know
• why you think it happened
• what work is under way to get to the bottom of it
• what people can expect next, and over what time frame.

Tell it with empathy

Acknowledge how people are feeling: ‘I know it’s hard/disappointing. I recognise that you have also been dealing with X or Y. I know this is tough to deal with.’ Acknowledge – to the extent you can say it authentically  –  that this is painful or difficult for you too.

Put actions in context

Remind people of the organisation’s higher purpose, and the organisation’s ongoing commitment to that purpose. Explain what steps are being taken and their rationale. Build emotional commitment by showing how those steps link to purpose and values: ‘Here’s what we’re going to do, and here’s why that is consistent with what we believe in.’

It can also be helpful to put your team’s situation in relative context by reminding them of colleagues, competitors or community members who are facing similar (or worse) challenges and demonstrating your own gratitude for the relative position you are in or options that you have.

Give people some control

The sense of powerlessness is deeply unsettling in times of crisis. Show people how they can exert an influence – however small – over the potential outcomes:

• What actions can they each take?
• How can they share their ideas or provide feedback on what is being done?
• What choices can they make?

Providing a flow of clear, authentic, and empathetic communications can go a long way to helping your people process what is happening and respond in a constructive way, rather than shutting down or devolving into political or defensive self-preservation.

4Be decisive

In a crisis, people look to their leaders to restore a sense predictability to their environment.

Unfortunately, the fear of making a poor judgement can trap leaders in analysis paralysis or a futile search for consensus.

This lack of clarity can cascade into organisational paralysis, poor execution, and a demotivated workforce  –  at a time when you need exactly the opposite.

Several areas where it’s important to move quickly are:

• leadership changes
• clarity of authority and accountability
• investment and resource decisions
• performance targets.

Leadership changes

In crisis, rapid leadership change is sometimes required to help the organisation rebuild. Be careful about unfair scapegoating, however, as the perception that senior management are simply protecting their own positions can quickly undermine staff trust.

Clarity of authority and accountability

It is essential that individual leaders are given the authority to cut through and make decisions, even at the risk of upsetting internal stakeholders.

Daily leadership meetings, where key decisions are communicated more broadly, can also help instil confidence across the organisation.

Investment and resource decisions

Accelerating investment, divestment, and other resource decisions (for example, significant headcount reductions or staff redeployment) is a good way to demonstrate that leaders are on the case.

Not everyone will like the choices, but if they understand and accept the rationale, they will usually stay neutral-to-positive and supportive of the leadership.

Performance targets

Setting tougher performance targets can be a useful way to sustain engagement during tough times.

Provided the goals don’t seem capricious or lacking in integrity, they can create a ‘war-time’ mentality that binds people together emotionally, as well as channelling people’s energy into productive activity and away from wallowing in engagement-killing despair.

---

Dealing with crisis is an increasing reality for leaders at all levels. Follow these tips and you’ll have a much greater chance of navigating your organisation – and yourself – to safety.