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What stakeholders need a crisis leader to know

This article describes the most important things stakeholders want and need their crisis leaders to know during a crisis.

There are at least three things stakeholders want and need their crisis leaders to know during a crisis. Specifically, the following are suggested:

KNOW. What do you want your crisis leaders to clearly understand – to know – in order to support your organization and its stakeholders during a crisis? In our research at Michigan Ross, we consistently hear that stakeholders want their crisis leaders to have a crystal clear understanding of three things:

1) Organizational Vision. To be truly effective, crisis leaders should know, be able to articulate, and be able to align their crisis leadership efforts to the organization’s mission and vision. A portion of every stakeholder’s value proposition is attached to their belief in what an organization is trying to accomplish. Incorporating the organization’s vision and mission into a crisis response will resonate with stakeholders.

2) Organizational Values. If an organization’s vision describes what it is trying to accomplish, then its values describe the way it plans to get there. A great deal of research has been done on the extent to which employees aspire to work for a company that shares their values. New research indicates that other stakeholder groups—particularly customers—want values alignment as well. In a crisis, stakeholders will be looking for an organization to “walk the talk”. This is best demonstrated through values-driven leadership.

3) Guiding Principles. Crisis leaders will be required to make an incredible number of decisions with limited information. Many of these decisions will prove to be less than perfect over time as new information becomes available. This is not typically a product of poor decision-making, but rather, a function of the crisis environment. What can be done to improve this seemingly impossible situation from crisis leaders? We can help stakeholders understand how and why decisions are being made. The most effective crisis leaders create and share a set of guiding principles that can be used in the decision-making process.

As a high stakes leader, how are you supposed to think about these responsibilities and why will they become so important during a crisis? Here are a few thoughts to help you understand the benefits of having a very clear sense of your organization’s vision, values, and a set of guiding principles to help you make decisions during a crisis.

Knowing the Organizational Vision. If you have studied the recent literature on guiding frameworks for organizations, you have almost certainly come across descriptions of vision statements, mission statements, purpose statements, and other instruments for communicating to stakeholders what the company is trying to achieve, why it exists, and what purpose it is trying to serve. For our purposes here, we’re not going to conduct a deep dive into the differences between these statements or what they are trying to accomplish. Interestingly, if you conducted your own research in these areas, you will find that experts are even finding it difficult to agree which statement serves what purpose.

Here, it doesn’t matter. What does matter is that your organization was created for some collection of reasons. It is likely that your executive team has crafted descriptions of these reasons. Irrespective of what they are called, they serve to communicate to stakeholders what members of your organization believe they are trying to accomplish; what principles the company has organized around; what employees believe to be true; how decisions will be made; and what employees of the organization value. All of these, if you think about them, actually define some very important qualities of an enterprise.

Do you know how your company leaders would respond to these questions if asked? Would all of their answers, if given independently, be consistent? Have specific statements for each of these questions been crafted by company leaders? Have they been shared with employees? With other stakeholders?  These are all useful questions, but not questions that we will explore in this course. Let’s simply recognize, for our purposes here, that it’s quite impactful when organizational leaders explicitly provide guidance to stakeholders regarding the company’s vision and purpose.

Given this acknowledgement, why might clarity on organizational vision be important to high stakes leaders? It is important because if the leadership team has taken the time to articulate why the enterprise exists and what it is trying to accomplish, then stakeholders will receive these articulations as promises in terms of what they should expect from the company. From the JetBlue story you examined earlier in the course, you learned that JetBlue’s vision statement is: Bringing Humanity Back to Air Travel. This is a very simple but powerful statement. It was widely shared and embraced by JetBlue crewmembers (employees). It was also shared with customers who, in the best of times, loved the edgy promise of JetBlue being better than its competitors. In the worst of times, however, such as during the Valentine’s Day Operational Crisis, the vision statement became the punchline of a very bad joke. “Stranding customers on an airplane for eight hours? Where’s the humanity in that?”

During a crisis, a high stakes leader’s efforts must align with both the word and the spirit (i.e., intent) of the promises that the company had made, or implied, to stakeholders. If they don’t, not only will stakeholders hold it against the company, but they will also lose confidence in its ability to live up to its promises, to its commitments. If the ultimate success of a company can be measured in the value it creates for its stakeholders, then trust capital and stakeholder confidence are key results indicators. Misalignment between stated vision and demonstrated vision will not serve high stakes leaders well in the eyes of stakeholders during a crisis.

Knowing the Organizational Values. What are organizational values? They are a collection of beliefs that define a company’s identity. They support the company vision, shape the culture of the organization, and reflect the principles that every member of the company holds dear.

Ann Rhoades, a co-founder of JetBlue, author, and a world-renowned expert on corporate culture, shared the following in her book Built on Values: Creating an Enviable Culture that Outperforms the Competition:

“Leaders drive values by making the commitment to a values-based culture and leading by example. Values drive behaviors by acting as a mechanism for illustrating to employees (and all other enterprise stakeholders) what acceptable behavior in the company looks like. Values must be defined by behaviors that any employee can recognize and emulate. Behaviors drive culture because the collective behaviors of people in the organization are, by definition, the culture, for good or ill. Leaders must create the environment that encourages a high-performance culture based on values. Culture drives performance because people who are committed to and understand the values and behaviors will take responsibility for performance.”

The research suggests that a clear set of organizational values can be immensely helpful in two ways that are worth calling out here (there are many more ways, but these two are particularly germane to this course.) First, a clear understanding of values will help employees make better decisions over time. As values are aligned with company goals, and behaviors are the manifestations of the actions required to achieve those goals, employees that make decisions in line with organizational values are ultimately helping the company achieve its goals. In other words, when employees live and demonstrate the values of the enterprise, their choices, over time, will help to move the company forward. This is particularly important during a crisis, when decision-making is difficult, and there is rarely a clear path to “the best right answers”. In a crisis, employees need a north star, something that serves as a guide for their choices. Here, the values of an organization meet this requirement remarkably well.

The second reason that organizational values are so important is that they communicate to your stakeholders what the organization stands for – a window into the company’s soul, if you will. When a company can build relationships with stakeholders based on common beliefs and principles, a much deeper sense of connection and trust will develop. This trust will serve as a platform for a high stakes leader’s crisis management efforts. On several occasions throughout this course, trust has been referenced as a very fragile connection between stakeholders and organizational leaders. During a crisis, whatever level of trust has been established is threatened. Greater levels of pre-crisis trust with stakeholders will provide a deeper well of resources that can be drawn upon while a crisis is being managed—either providing high stakes leaders more time to work the problem or accelerating the restoration of trust after a crisis.

For these two reasons in particular, it’s very important that an organization establishes and communicates a set of values to all stakeholders and incorporates them into every aspect of organizational activity. Once this has been done, high stakes leaders must know these values cold, and align every decision they make with them, to fully leverage their incredible potential.

Knowing the Guiding Principles. A clear understanding of the organization’s vision and values is absolutely vital for high stakes leaders. They provide a platform upon which decisions can be made and actions can be taken. What they do not provide, however, is a mechanism for setting priorities or clarifying specific critical objectives for a given high stakes scenario. This is where Guiding Principles become so important.

In Bruce Blythe’s book Blindsided: A Manager’s Guide to Crisis Leadership, the author describes guiding principles as “a crisis leadership roadmap throughout the organization for strategic crisis decision-making.” In his book, Blythe describes a starting point for a set of guiding principles that could benefit any organization during a crisis:

1) Wellbeing of people first, with caring and compassion.

2) Assume appropriate responsibility for managing the crisis.

3) Address needs and concerns of all stakeholders in a timely manner.

4) All decisions and actions based on honesty, legal guidelines, and ethical principles.

5) Available, visible, and open communication with all impacted parties.

If your organization does not have a set of crisis leadership principles, this is a good place to start. You can see in this example how a company’s vision and values could help frame the way decisions are made by a high stakes leader during crisis, but that a set of principles, such as these, are necessary to define priorities and key actions that are required of leaders during this specific situation. This is why a set of principles, such as those shared here, are just a starting point. For each crisis situation, the principles must be modified to accurately fit the disruption at hand.

Another example of guiding principles was the set shared with all members of the University of Michigan community by President Mark Schlissel during the early stages of the COVID-19 pandemic. While the University has a mission and a set of core values, it required a set of guiding principles to clearly define how institutional leadership would behave during the crisis. The principles he shared were:

1) Deliver the mission of the University of Michigan. We take pride in the work we are doing to enhance society and recognize the many communities who rely on us.

2) Value, protect and support our people. We will seek and implement the best guidance possible for the health and safety of our students and employees. We will also prioritize students’ academic progress and financial aid and strive to minimize adverse impacts on regular employees. The success and well-being of all members of our community are crucial to education, research and patient care at U-M, now and into the future.

3) Preserve the University of Michigan’s long-term excellence. We are responsible not just for the university’s success today, but for its future. Together, we continue to demonstrate the importance of academic excellence, including the inseparable values of diversity, equity and inclusion. No crisis can change this fundamental truth. We will have to work and think differently to uphold these values.

4) Communicate effectively and thoughtfully with our community. We will continue to share information with as much transparency and as quickly as we can on our COVID-19 website and in communications with individual units.

During a crisis, high stakes leaders must KNOW their organization’s vision, its values, and have a set of guiding principles at the ready to support decision-making. When a crisis appears at your organization, will you be able to leverage the work that has been done to develop and communicate the company’s vision and values? Do you have a “starter set” of guiding principles ready to tailor for the unique circumstances of the crisis at hand? To each of these questions, your answer should be a resounding “Yes!” If your answer is “no”, this would appear to be an opportunity for improvement.

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High Stakes Leadership: Leading in Times of Crisis

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