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How Various Leadership Styles Apply to Corporate Crisis Management

By Devin Sirmenis, Witt O’Brien’s:

While volumes of information exist on the impact stress has on leadership decision-making under emergency response, conflict, war and natural disasters, much less data is available from the minds of the executives that are protecting corporate brands, standing in the marketplace and ability to serve customers. Below are distinct leadership styles and their applicability to corporate crisis management.

Don’t Waste a Good Crisis
Personality traits and leadership styles have been studied for years. Nearly everyone is familiar with the Myers-Briggs Type Indicator and have possibly taken it a few times over the course of their career.  Generally, the purpose of personality theories is to look at how people perceive the world around them and make decisions. This is of particular interest when applied to the discipline of corporate crisis management.

Years ago, while conducting a crisis management capability assessment at a global pharmaceutical company, one of the executive’s shared, “we don’t want to waste a good crisis.” He was of course setting the tone for himself and his leadership group in terms of the candidness he expected to see during interviews. They had just managed their way through a massive cyber-attack that started half-way around the globe, with fallout reaching the U.S. and impacting every line of business. Each one of the following leadership styles was present in the executive group, which is typical across strong leadership teams.

Transformational Leadership
Transformational leadership is often thought of as a style where the leader understands the change that needs to occur, creates a vision and utilizes a team that is as equally committed to achieving the aspirational vision.

This style is one of the most critical for the crisis leader to possess. While the crisis leader can rely on his team to help define the current situation, unpack details of the crisis and portray the impacts it could have across the business, it’s up to them to define ‘what success looks like’ for the corporation at the end of a crisis. This aspirational vision then helps define strategies, build work streams and organize actions.

Transformational leadership has been practiced by the strongest crisis leaders for decades, as evidenced by the story of the “Moose Test”. When SUVs where first being developed, a well-known, high-end manufacturer was eager to show off the safety and conveniences of their new models. They invited the media to a day of test driving the SUVs through the European countryside. During one of the reporter’s drives, a moose jumped out of the woods and onto the road. The reporter swerved the SUV to avoid hitting the moose and rolled the vehicle down the hill. Catastrophic reporting followed on the inherent safety of the vehicle. The CEO at the time happened to be a transformational leader. His aspiration was simply stated, “We will make the safest SUVs.” This removed discussion about scrapping the SUV line and put the engineers to work. Months later, the reporters were invited back out to watch the SUVs being tested on a course where they were made to avoid suddenly appearing obstacles. The reporter who had rolled the SUV even took a turn. All with positive results.

Transactional Leadership
Transactional leadership is complementary to transformational leadership because it’s a style that focuses on the importance of organization, process and day-to-day progress towards goals.

This style always manifests itself in the deputy crisis leader, chief of staff or crisis management program/plan owner. Transactional leaders are process drivers that understand the importance of organizing their team’s actions at the operational and tactical levels. They are the ones that must help force work out of crisis management meetings, drive functional teams to develop solutions and answers and bring the next steps back to the crisis leader to help inform their decision-making during crisis.

Bill Gates and Paul Allen started Microsoft in 1975. By the time Gates was 23, the company had grossed $2.5M, and is valued ‘slightly higher’ in today’s marketplace. Bill Gates can also be considered a transactional leader. It’s said that he used to always visit new product teams and ask them difficult questions until he was satisfied that their workstreams were on track and they aligned to the corporation’s goals.

Transactional leaders are traditionally thought of as working with a rewards and punishment structure. Nothing could be truer in times of crisis. As they drive the analysis and decision-making process for the crisis management team, they also ensure that the functional teams do not lose track of the potential impacts of the crisis on the corporation. Success allows the corporation to grow and flourish, while failure undermines the foundation of the corporation, and negatively impacts jobs and the health of the community they work in.

Charismatic Leadership
Charismatic leadership is a style that encourages particular behavior across stakeholders and uses persuasion or strength of personality to get things done and improve situations.

This style is essential for lead crisis communicators or spokespersons. These leaders are eloquent in communications, feel equally comfortable in one-on-one and group situations and possess soft skills like humility, empathy and compassion. Charismatic leaders should also be reflective, able to easily self-assess and solicit feedback from other leaders. Being flexible and able to quickly adjust to changing environments and perceptions is also key.

Charismatic leadership also needs to function at the speed of digital in today’s world. This type of leadership style only works when the corporation’s words match the corporation’s deeds, and there is substance behind style. A recent example of charismatic leadership could be the lead communicators supporting the 2018 Starbucks scandal. Chairman Howard Schultz publicly apologized for the racially provoked ‘trespassing’ incident. The corporation’s actions further backed his words. Starbucks closed 8,000 stores so that 175,000 employees could complete racial-bias training.

Authoritarian Leadership
Authoritarian leaders control all the decisions and base actions on their own ideas, while closely supervising direct reports. While on the surface this sounds like a broken model, this style can work where there is a very strong CEO, who has worked their way up through the company. This experience imparts an incredible level of understanding on how crisis impacts and attributes affect each line of business and the corporation. In these atypical instances, incredibly efficient teams can make rapid progress in working a crisis to resolution.

Cross-Cultural Leadership
Cross-cultural leadership is a style that considers how individuals of different cultures interact as teams across geographies, from satellite offices to headquarters. This is especially important as leaders manage crises that impact a globalized market and utilize an enterprise-level crisis management plan to guide activities.

It’s hard to say which one of these leadership styles is the best practice, especially given that certain circumstances warrant different responses.  It often comes down to how the styles are combined within a given leader, or how they manifest in the executive team’s collective behavior that creates a strong crisis management capability. Those corporations who want to be pioneers need to willingly share leadership lessons so those that come after them are better equipped to manage crises.

About the Author: Devin Sirmenis is a Managing Director, Corporate Resilience, with Witt O’Brien’s. He can be reached at dsirmenis@wittobriens.com. Witt O’Brien’s has been an innovator in crisis and emergency management since 1983. Learn more about its crisis and emergency management experience across both the public and private sectors here.

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