Chapter 12

Part Three: Organizational

Leadership

Crisis Leadership
and the Learning
Organization
© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website for classroom use. 12- 1
 Crisis
• A crisis is a low-probability, but high-impact
event that threatens the viability of an
organization and is characterized by ambiguity of
cause, effect, and means of resolution, as well as
by a belief that decisions must be made swiftly.
> Comes in many forms:
o Natural disasters,
o Mass shootings,
o Product failures,
o Human error disasters, or
o System failures.
© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website for classroom use. 12- 2
 Crisis Leadership
In planning for a crisis, leaders These five tasks are essential
focus on five integrated tasks: competencies of crisis leaders,
1. Formulate a vision of crisis the ability to:
management, • Craft a vision,
2. Establish strategic goals • Set objectives,
and objectives for crisis • Formulate, execute and
management, evaluate crisis plans,
3. Coordinate the creation of • Communicate, and
a crisis management plan, • Manage people.
4. Establish a communication
plan, and
5. Develop simulations and
drills.

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website for classroom use. 12- 3
 Crisis Communication in the Age of Social
Media
• Social networks must be a part of an
integrated communication strategy.
• Technologies diminish an organization’s
ability to control crisis communications.
> A crisis is instantly visible, and viral.
> Companies have only minutes to contain a crisis.
> Stakeholders may have more information about
the crisis than the company itself.

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website for classroom use. 12- 4
 Formulating a Crisis Plan
• Better prepared organizations could reposition
themselves and turn a crisis event into a
strategic opportunity.
• Readiness to respond is a function of:
> The skills, abilities and experience of a crisis leader,
> A trained and well prepared crisis team,
> Organizational preparedness,
> Adequate organizational resources, and
> Top management support and commitment.

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website for classroom use. 12- 5
 The Benefits of a Crisis Plan

• Reduces duration of crisis. • Can lead to the accumulation

• Enhances corporate image. of ready resources.
• Allows for quick and • Can lead to fewer costly
effective responses. mistakes.
• Improves communication. • Creates less panic.
• Enhances coordination and • Leads to a quicker
cooperation. resolution.
• Limits financial loss.
© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website for classroom use. 12- 6
 Exhibit
Exhibit12.1
2.5
Three-Stage Crisis Management Plan

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website for classroom use. 2- 7
 Pre-Crisis Planning
• Pre-crisis planning addresses:
> Do we have a crisis response team/who is on it?
o Want a mix of people from all parts of the organization.
> What is our crisis plan of action?
o Should evaluate the worst possible scenarios .
> Do we have all the necessary resources in place?
o Both financial and nonfinancial resources are needed.
> Another aspect is deciding on the appropriate
communications strategy.

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website for classroom use. 12- 8
 Leading during a Crisis
• When crisis erupts, a rapid response is vital.
• The crisis leader must step forward and lead.
> Focusing on three key elements:
o Goals – define the ‘What’
o People – define the ‘Who’
o Resources – define the ‘how’.

• Effective leadership from the top is critical.

> Basic lesson is prepare for crises, respond quickly,
act with integrity, and disclose fully.
© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website for classroom use. 12- 9
 Adapting After a Crisis
• After a crisis, a review should include:
> Effectiveness in stakeholder communication,
> Effectiveness in addressing the root cause,
> Crisis team effectiveness,
> Leadership effectiveness, and
> Effectiveness in dealing with victims.
• Information gathered in the post-crisis
evaluation helps prevent future crises.

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website for classroom use. 12- 10
 Effective Crisis Communication
• Leaders must be able to communicate
quickly and effectively during crises.
> Four questions often emerge:
1. What happened?
2. How did it happen?
3. What’s being done to address the crisis?
4. What has been done to ensure it never happens
again?
• Providing honest, accurate, and timely
answers is effective crisis communication.
© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website for classroom use. 12- 11
 Guidelines to Effective Crisis
Communication
• The first 24 hours of a crisis are crucial.
• Organizations can use media and tools to
inform the public.
> A press release is a printed statement that
describes how an organization is responding to a
crisis and who is in charge.
> A press kit is a package of information about a
company, including names and pictures of its
executives, a fact sheet, and key milestones in
the company’s history.
© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website for classroom use. 12- 12
 Exhibit 12.3
Effective Crisis Communication – Rules to Follow

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website for classroom use. 2- 13