Owners must prepare for crisis

Leaders must mitigate the effect of crisis on their businesses by moving from reactive to proactive engagement quickly.

When a crisis affects a business, four leadership reactions often happen. If nothing is done to transform the reactions into proactive effort, the crisis may spell the end of the business, or at least of the leader.

First, leaders become paralyzed. Struck by the shock of crisis, like a turtle a leader hides in their shell waiting for the crisis to go away. Defensive reaction is a common response to all, but a leader needs to snap out of their paralysis and begin to initiate change even before the crisis ends.

Second, leaders disappear from the public eye. The leader may be feverishly working on crisis response or some other noble reaction and leave his employees wondering what’s happening. Even though a leader may spearhead the crisis response, it’s their responsibility to be the public face of the team. The employees should see more of the leader in a crisis, not less.

Third, leaders relax performance. With work and product goals in jeopardy, the leader loses a way to measure performance and give feedback. It may not even seem appropriate to dive into new performance expectations in the tentative state of a business in crisis. A leader needs to re-establish new performance standards that are appropriate but enforced. This helps focus the direct reports and builds momentum. Fourth, leaders shirk commitments. The promises made outside of crisis are questioned and the leader’s temptation is tobend the promise to fit the circumstances. While there’s room for re-negotiation, the leader must remain faithful towhat was promised before the crisis, even if doing so makes hardship temporarily worse. The leader may find that the nobility of their commitment spurs employees to action.

What business won’t see crisis? Because external crisis is impossible to predict or prevent, every entrepreneur will be required to respond to crisis at some point. Every company has contingency plans in case a system fails - an entrepreneur must have his own people-centered contingency plan too. Crises vary widely in their impact and duration, so a one-size-fits-all plan isn’t possible, but an entrepreneur may at least consider the state of their business leadership, identify where the four leadership reactions are likely to arise, and establish clear communication up-front with his leaders to help them move from stunned reaction to pro-action fast ((Anderson)).

No business owner has time to consider four points in a crisis; he responds with what he knows to that point and no further. If I’m to prepare for crisis, or to help others prepare, it’s most important to learn the common responses now and make thoughtful plans to mitigate damage and bounce back fast. This means, first of all, valuing the proactive responses to the four reactions. If I’m already leading from my shell, hidden from those I lead, unclear about performance, or shirking commitments, a crisis isn’t going to make my business better. That doesn’t mean I’m safe; however, for there will be need of courage and commitment when the crisis hits no matter how smoothly the business is running today.

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