Ahen we watch events unfold in Ukraine, it reminds us of the pervasiveness of uncertainty – and even outright crises – in the world. And it’s not just geopolitics: a viral pandemic, supply chain issues, extreme weather events… it seems leaders are facing an inordinate number of crises today that are creating challenges for day-to-day decision making.
But crises and uncertainty have always been a part of life, and good leaders can learn to anticipate and manage these phenomena.
In her research and experience, Vivian Riefberg, Professor of Practice and Chair of the Walentas Jefferson Scholars Foundation Chair, examined how leaders respond when crisis and uncertainty arise – and she identified best practices for getting through them. with success. A former senior partner at McKinsey, Riefberg now sits on boards such as PBS, Johns Hopkins Medicine and Signify Health. She spoke with Ideas for Action about leadership under uncertainty and some of the do’s and don’ts of successful crisis management.
Q: Why is it so important for managers to learn how to deal effectively with crisis and uncertainty today?
Riefberg: Decision-making under conditions of substantial uncertainty and crisis is different from day-to-day decision-making in management and leadership. The magnitude of the impact is often considerable and the situations you encounter are not things you deal with in the realm of what you do on a day-to-day basis, so you don’t have a lot of experience on which to tap into and you often have to make decisions faster.
Crises can develop exponentially. For example, COVID-19 has added an inordinate number of additional challenges, both exacerbating existing problems and creating new sets of decisions for us to make. Workers can’t go to work, hospitals are overwhelmed, people have mental health issues, so all of these issues overlap and create more challenges.
Q: How does the current media and social media environment make crises more difficult to manage?
Riefberg: We operate in a 24/7 world where many members of the public can comment on what you do and shape the outcome of what happens.
In a world of emails and text messages, the amount of written information has increased and the idea of what is confidential has changed. So there’s often a lot more information about your business being released to the market. As a result, you have many more things coming to you from a wider variety of people, so multiple narratives begin to be developed that you are less able to shape.
Q: What are some of the things leaders should do when a crisis arises to develop good “situational awareness”?
Riefberg: First, it’s really important to ask yourself, “What do I know for sure about this situation, and what are the big uncertainties I have?” Not what I wish was true, or what was true in the past, but what do I know now? There’s a tendency when there’s something uncertain to throw up your arms and say, “I can’t handle this. But in fact, you can often boil it down to predictable scenarios where there are two or three different possible outcomes. You want to handle different uncertainties differently during a crisis.
It is also very important to determine who your constituencies are and what should come first, second and third with those constituencies. For example, we have a case I present in class about a hurricane, and most of the students are focused on customers – but as the CEO points out in the case, “If I don’t have employees , so I don’t have anyone to call on customers, so I have to worry about the well-being of my employees first and foremost.Depending on the company, other constituencies might include investors, regulators, or law enforcement. order, for example.
Q: Once you find yourself in a crisis, what are the things you need to keep in mind to handle it well?
Riefberg: One is to recognize as a leader that you don’t have all the answers and therefore need to reach out to find others who can help you. You can also create a specific group to focus on the problem, while the rest of the company continues with current business – so it’s not like a group of 8 or 9 year olds at a soccer match with everyone chasing the ball. That’s not how you score a goal!
Also, you have to put on bifocal lenses, so you don’t just look at what you’re going to do today, tomorrow or next week, but you also think about the medium and longer term.
And prioritizing communication is key. Even when you can’t act quickly, it’s important that you communicate with the various stakeholders and share the processes you’re going through, so everyone understands how you’re doing it.
Q: What are examples of mistakes made by leaders in crisis management?
Riefberg: This is an important thing to be aware of, so in my teaching at Darden, I incorporate cases that cover multiple areas of challenge.
For example, there is often not good recognition of the range of potential outcomes – underestimating what the impact may be. Additionally, some leaders do not fully consider all parties impacting the situation and are then surprised by the actions of a particular stakeholder. Another key mistake is not fully acknowledging the personal toll that great uncertainties and great crises have on you as a leader and as a human being.
Q: How can leaders deal with the consequences of a crisis, including the effects on them personally?
Riefberg: Leaders can take the opportunity to really focus on their purpose and learn from the crisis – and incorporate that into business learning. Hopefully they will never have to deal with the same thing again and can build an even better business for the future. For example, with COVID, we’ve learned that we can treat many more health issues virtually, but if we don’t change incentives and regulations, we may not be able to take advantage of that knowledge.
And on an individual level: After a crisis, many leaders think that the company is returning to normal, that they will be themselves again, without realizing how much the crisis has affected them. Dealing with a crisis can be discussed for years and, for some people, the emotional toll can be considerable. As we become more honest and de-stigmatize mental health issues, it’s important for leaders to realize that they don’t have to be omniscient or perfect.
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[This article has been reproduced with permission from University Of Virginia’s Darden School Of Business. This piece originally appeared on Darden Ideas to Action.]