Leading Through Turmoil: Traits of Effective Crisis Managers
July 15, 2024 2024-07-15 5:05Leading Through Turmoil: Traits of Effective Crisis Managers
As John F. Kennedy said, “When written in Chinese, the word ‘crisis’ is composed of two characters—one represents danger, and the other represents opportunity.” How the situation is perceived decides whether it strengthens or undermines a company in difficult times.
While handling crises gracefully is an art, they are an unavoidable part of doing business. Effective crisis managers possess specific characteristics that allow them to responsibly handle the chaos and turn it into opportunity. A proper skillset and pre-crisis planning make dealing with the situation easy and effective.
Decisiveness & Communication Skills – Traits in Enhancing Crisis Response
Decisiveness is a skill that is essential for crisis managers. A crisis demands quick thinking and decision-making to minimize the damage. Prolonged periods of crisis can severely cause financial loss, reputation damage, and many more. Resources that are very important for the organization are also saved from being wasted. Sometimes, decisiveness prevents minor issues from turning into a full-blown crisis. Major chunks of emergency may be saved by taking timely actions. Crisis managers should be well-prepared for any disruption to handle the unavoidable loss. However, the impact of the damage may be minimized with proper skills.
Effective communication is yet another important skill that crisis managers should possess. Dealing with shareholders while focusing on the goals of the company requires good communication skills. Shareholders are the owners of the company and have all the rights to know any major having within the company. With proper communication, shareholders’ confidence can be restored while managing the crisis. The chances of spreading misinformation and miscommunication are minimized, resulting in the ultimate benefit to the company.
All these traits help in enhancing the crisis response. The customer base is also maintained due to the continuity of operation and minimal disruptions. Organizations can successfully handle crises and grow with greater resilience and strength by cultivating an environment of swift action and clear communication.
Planning, Executing, and Recuperating – Leading Through Turmoil
Planning is the very first step in dealing with any crisis. A crisis occurs unheralded, but planning helps the situation to go through. The fund created for emergencies helps the firm make necessary decisions according to the demands of the situation. For instance, Deloitte conducted a study and found that dealing with a crisis becomes 50% easier with proper planning. Also, planning for a crisis makes the recovery of the business value 20% faster and easier.
Prior experience or actual events that have taken place in the form of case studies may prove beneficial in influencing the preparation and budgetary decisions. As the preparations lessen the crisis’s impact, less harm is done. The crisis scenario is considerably easier when resources and trained personnel are pre-allocated.
PwC research found that 65% of company problems are resolved when plans are carried out effectively. The International Data Corporation (IDC) claims that, with careful preparation, operational activities during a crisis are 80% more successful and carried out continuously. According to a Business Continuity Institute (BCI) assessment, the harm is decreased by about 40% if the plan is carried out within 24 hours of the crisis. Both the financial loss and the rehabilitation process are greatly lowered. Because of their earlier preparation, crisis managers are more at ease handling the current scenario.
With the help of proper planning and execution, the recovery becomes much faster and more effective. Making changes by learning through the crisis helps long-term growth and reduces the chance of further crises. It can turn into opportunities if crisis managers use their skills and perceive the situation differently. With crisis management, 75% of the company restores its reputation at a much faster rate. Also, it helps maintain the shareholders’ trust by quickly calming the turmoil inside the business and recovering financial loss. It is also proved by the study of McKinsey that a company that values customer relations while tackling the crisis retains around 80% of the customer base instead of neglecting them.
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Empirical Illustrations
Starbucks handled a crisis in 2007, which they handled exceptionally well and with an upbeat outlook. The episode in question involves the unjustified detention of two Black people at one of its stores, which severely damaged the company’s reputation. Starbucks responded quickly, closing 8,000 of its locations nationwide for a full day to provide all staff with thorough anti-racism training and implement numerous crucial policy changes. The public responded positively to this firm and open action, ultimately restoring the brand’s prestigious reputation.
Another significant case is when Toyota faced a crisis when quality issues were reported in the acceleration pedals. This incident occurred between 2009-2010 when the pedals were faulty and caused unintentional acceleration that endangered user safety. In response, they exhibited admirable accountability and called back 9 million defective models worldwide, stopped the production and sales of that model, and undertook quality control measures to compensate for the damage. This helped restore the brand’s reputation and regain customers’ trust.
Volkswagen established yet another exemplary instance of navigating the turmoil and recovering with flying colors. The company was found cheating on the emission test by installing software that represented fake data. This global scandal severely damaged the company’s reputation, causing its share price to dip. However, the company rectified its mistake and earned the position of leader in the green automotive sector.
Each of the aforementioned cases exemplifies the successful talents of managers who could handle a crisis worldwide in a way that not only compensated for the loss but also restored the loyalty of their consumers and the reputation of their business. The primary goal of Rushford Business School is to provide students with high-quality education and knowledge via a curriculum that emphasizes authentic, real-world experiences. Through collaboration with industry experts, graduates learn the knowledge and abilities necessary to handle issues that arise in the business world by providing feasible solutions. As a result of the abilities they cultivated during their education, graduates are equipped with the capacity to respond constructively to stressful situations without allowing themselves to get too concerned about the circumstances.
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Final words
When it comes to coping with a crisis and recovering from a loss, it is possible to conclude that adequate preparation and an appropriate execution are essential components. Managers’ proficiency is another factor that contributes significantly to improving the quality of decision-making. When successfully navigating a crisis, crisis managers need to be able to make decisions and communicate effectively.
Rushford provides training and makes the learning process as simple as possible via mentoring assistance and internships to ensure that its graduates are well-versed in the abilities necessary in the real world. Because of exposure to the real-world business environment, the thought process becomes much more practical than just theoretical.