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Seeing the Glass Half Full: Using a POS Framework to Teach Leading under Pressure
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Abstract
Seeing the Glass Half Full: Using a POS Framework to Teach Leading under Pressure
The previous decade has been marked by a plethora of organizational crises, including natural
disasters, acts of terrorism, scandals, and financial mismanagement. Yet, many leaders are
woefully ill-prepared for the important role they may need to play in leading an organization
through a crisis. This paper articulates a strategy for developing crisis leadership skills for both
MBA students and executive education participants. We describe critical leadership
competencies and offer practical and specific teaching examples and materials that educators can
use in the classroom.
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When reflecting upon the last decade, many leaders will describe it as one defined by
crises, such as the terrorist attacks of September 11, 2001, the 2003 Severe Acute Respiratory
Syndrome (SARS) pandemic, the 2004 tsunami, and the 2008 collapse of the financial markets.
A glimpse of the events of the last decade suggests that crises are inevitable and do not
discriminate based on the organization’s sector or size. Interestingly though, in most instances
the leadership team is not prepared to manage a crisis, and the mishandling of an organizational
crisis can have negative, long-term consequences for an organization’s profitability, reputation,
market position, and human resource management systems (Garcia, 2006). For example, Knight
and Pretty (1997) found in their research that companies which mishandled a crisis had a ten
percent decrease in stock price after the first weeks of the crisis; and ending the year after the
crisis the stock price was fifteen percent below pre-crisis prices. Contrast these results with firms
that effectively manage a crisis, and subsequently had only a five percent stock price decrease
followed by a quick recovery.
Although executives are aware of the negative consequences associated with
organizational crises, their formal training and on-the-job learning experiences do not prepare
them for leading a crisis situation. Instead, the education of leaders emphasizes the core
functional areas of business, such as accounting, finance, operations, marketing, and human
resource management; and when leadership training does address crisis situations, the focus is on
communications to stakeholders and public relations. However, leading a crisis situation is more
than communication and public relations since rhetoric and positive spin alone will not solve the
majority of crises that leaders confront.
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In this paper, we propose there is need for management education that develops the
competencies needed to lead in a crisis situation. Aligned with this year’s Academy of
Management Annual Meeting theme, we contend that management classrooms and executive
education programs throughout the world provide a stage to expose leaders to think about crises
through an alternative perspective that ―dares them to care‖ about their behavior in a crisis
situation. ―Daring to care‖ as it relates to crisis management not only requires leaders to develop
systems for preventing crises or detecting the signals of a crises, but also demands creating a
culture of resilience, an organization that learns from crisis to prevent repeat occurrences, and a
mindset to perceive a crisis as an opportunity for change. Moreover, ―daring to care‖ in crisis
situations involves leaders taking into account the needs of not just the stakeholders with the
most power or resources, but a balanced approach that builds trust and demonstrates compassion
to all stakeholders affected by the crisis.
Therefore, the pedagogical approach discussed in this manuscript has the goal of helping
students and executives deepen their understanding and compassion for how to lead companies
throughout the crisis life cycle by enacting effective leadership competencies. We present a
framework for management educators to implement a crisis leadership curriculum in their
classrooms. This framework is grounded in academic research and based on over a decade of our
experiences of teaching crisis leadership in MBA programs and executive education. The
academic research guiding our development of a crisis leadership curriculum is based on
traditional areas of research that have addressed crisis management and includes research topics
such as ethics, organizational learning, and decision making. However, somewhat different from
a traditional crisis management curriculum, we draw upon positive organizational scholarship
(POS) as a teaching lens for framing crisis leadership that ―dares to care‖ by emphasizing even in
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a crisis situation leadership can bring out the best of human potential and excellence in
organizations by focusing on dynamics that generate trust, high-quality relationships, mindful
organizing, and creativity (Cameron, Dutton, & Quinn, 2003).
We begin the manuscript by linking leadership competencies and crisis management as
an anchor point. Then, we examine leadership competencies for each phase of a crisis, and
throughout the discussion of these competencies, we interweave examples of cases, experiential
exercises, and action-based learning assignments that can be used for teaching crisis leadership.
Finally, we conclude with reflections on why positive organizational scholarship is an effective
lens for teaching crisis leadership.
Leadership Competencies and Crisis Management
Leadership can be conceptualized as a collective phenomenon where different individuals
contribute to the organization by strategizing a course of action for achieving organizational
goals and mobilizing members to adapt their behavior to achieve goals so that an environment
can thrive (Pettigrew & Whipp, 1991; Spreitzer & Quinn, 2001; Heifitz & Laurie, 1997). Leaders
transform their organization by inspiring followers to perform beyond expectations (Sosik &
Jung, 2008). This is accomplished by articulating a vision, role modeling the appropriate
behavior to achieve that vision, and empowering others to act (Kouzes & Posner, 1987).
Leadership competencies, in turn, refer to a state of being well-equipped or capable to
perform a task (Boyartzis, 1982; Ulrich, Zenger, & Smallwood, 1999). In organizational life,
competencies define in behavioral terms what a leaders needs to do to produce results. In other
words, leadership competencies act as a ―North Star,‖ helping leaders navigate their work by
creating a roadmap for guidance (Intagliata, Ulrich, & Smallwood, 2000). Researchers note that
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the development of leadership competencies is a dynamic process that evolves over time and is
influenced by the individual’s attributes and the collective interactions of the leader within the
context of the organization and external environmental circumstances (Denis, Lamothe, &
Langley, 2001).
In a crisis situation, effective leadership competencies expand to include skills so that
leaders are not victims of circumstances but can participate in creating new circumstances
(Jaworksi, Flowers, & Senge, 1998). Leadership evolves into creating a context where
organizational members make sense of the reality of the crisis and become reflective and
proactive in preventing the crisis from escalating and resolving the crisis. This is a challenging
task for executives since crisis leadership somewhat differs from leadership as usual. This is
because organizational crises are low-probability/high-consequence events, characterized by
ambiguity, time pressures, some type of system failure, and limited authority (Pearson & Clair,
1998). In a crisis situation plans are only a starting point but have to be adapted as unexpected
events unfold and stakeholders vary their demands of the focal organization.
Learning to Lead in a Crisis Situation
Learning is a foundational pillar for effective leadership and essential for job
performance and the career success of executives (Brown & Posner, 2001; McCall, Lomardo, &
Morrison, 1988). Research suggests that people learn to lead from three types of activities: trial
and error, observations of others, and education (Kouzes & Posner, 1995). There are a variety of
experiences and venues where leaders can learn from each of these types of activities, including
on–the-job, relationships with others, and formal training. These learning experiences become
more effective when leaders can construct meaning from the knowledge acquired and strengthen
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their abilities and capacities. Moreover, the learning journey for leaders is a springboard for
change in one’s viewpoints of how to interact with one’s environment. Constructing meaning
from learning experiences is a cyclical process of adapting to new situations by making
improvements and generating new perspectives, options, and possibilities (Senge, 1990). Inquiry
into an organization’s practice is a fundamental aspect of the learning process for leaders by
questioning how things are done, the underlying purpose for why things are done, and essential
principles that guide the organization’s mission, culture, and strategy (Argyris & Schon, 1978;
Swieringa & Wierdsma, 1992). Through this inquiry process, leaders learn how to learn, and this
facilitates their development (Argyris & Schon, 1978).
A curriculum designed with the purpose of leaders learning how to prevent crises or to
lead in crisis situations builds upon leadership education research, but accentuates competencies
that are frequently skimmed over in a traditional MBA classroom or executive education
program. Learning to lead in a crisis encompasses the ability to solve problems by adapting very
quickly to a fast-paced changing situation (Carrel, 2000). During a crisis, leaders have to analyze
and respond to the actions or inactions of stakeholders and political actors by sifting through
information diffused in real time (Stern, 1997). Often this entails the aptitude to think about the
tacit and explicit beliefs of adversary actors, the environmental context of the crisis, and the
adequacy of the organizational systems and political alliances designed to cope with the crisis.
The intense pattern of interactions that leaders confront in a crisis situation test the
capacity of leaders to manage complexity, face trade-offs, and make hierarchical value decisions
(Stern, 1997). In addition, crisis leadership involves learning how to readjust the organization’s
view of the world by facilitating a shift in operational practices and precautionary norms.
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Interestingly, some of this work is ―unlearning‖ organizational routines and managerial beliefs
that result in crises, and creating alternative processes by examining, testing, and integrating new
ideas (Kolb & Kolb, 2005). Another dimension of crisis leadership learning is the ability to
foster organizational resilience when coping with a crisis by institutionalizing processes that
induce positive outcomes, such as the skill to bounce back and the capacities for recovery
(Lalonde, 2007).
Creating Context for Crisis Leadership Education
In a classroom environment designed for training leaders, such as in an MBA program or
executive education program, much of learning is either explanation-based or experiential-based.
Explanation-based learning involves analysis and reflection to interpret experiences (Herman,
1990; Stern, 1997). In business education, the goal of explanation-based learning is to generate
new understandings of causal relationships of individual behavior or organizational systems that
result in favorable or unfavorable outcomes. The case method of teaching is a classic example of
an explanation-based pedagogical approach to business education. Cases are illustrations of
situations that organizations have confronted and designed to help students learn how to sharpen
analytical skills through inquiry and theorizing about organizational situations (Hammond,
1976). Other forms of explanation-based learning used in the MBA classroom or an executive
education program include videos, lectures, readings, and guest speakers. Slightly different from
explanation-based learning, experiential learning involves a concrete transformational experience
where knowledge is created by forming mental models from observations and reflections that are
applied and tested to a real or simulated situations (Kolb, 1984). Examples of experiential-based
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learning techniques employed in an MBA classroom or executive education program include
simulations, role-playing, and action-based learning projects.
As shown in Figure 1, both explanation-based learning and experiential learning have the
potential to create a classroom environment where individuals can learn how to lead in a crisis
situation by encouraging a holistic approach for thinking, feeling, perceiving, and behaving in a
crisis situation (Kolb & Kolb, 2005). Furthermore, these pedagogical approaches allow for the
professor to extract students’ belief and paradoxical tensions about effective crisis leadership
practices so they can be examined, tested, and combined with previous ideas to develop new
competencies.
Thus, we contend that the ideal classroom environment for teaching crisis leadership
integrates explanation-based learning and experiential learning aligned with the phases of the
crisis management process. As illustrated in Figure 2, each phase of the crisis management
process provides a lens for diffusing knowledge to students and for designing learning activities.
In general, crisis management researchers have identified five phases that represent a typical
business crisis: 1) signal detection, 2) preparation and prevention, 3) damage containment, 4)
recovery, and 5) learning and reflections (Mitroff & Person, 1993; Coombs, 1999). The first
phase, signal detection, requires leaders to sense early warning signals that announce the
possibility of a crisis. In the second phase, prevention and preparation, leaders are expected to
avert crises and prepare if the crisis occurs. The third phase entails containing damage by
keeping the crisis from expanding to other parts of an organization or its environment. During
the fourth phase of recovery, leaders are responsible for implementing short- and long-term plans
designed to help resume business as normal. Finally, in the fifth phase of crisis management
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leadership encourages learning, reexamines the critical lessons from the crisis, and reflects upon
opportunities brought to the organization’s attention as a result of the crisis. Furthermore, as
depicted in Figure 1, we encourage our student to use each phase of a crisis for learning. In the
next section, we discuss the associated leadership competencies for each crisis management
phase and present our teaching approach.
Crisis Leadership and Signal Detection
We begin our crisis leadership courses introducing a dichotomy for student to classify
crises by using terminology from the Institute for Crisis Management (ICM), a crisis consulting
and research firm. ICM identified two primary types of crisis situations—sudden crises and
smoldering crises1.
Sudden crises are significant and unexpected events that disrupt the daily operations of
business for some period of time. Natural disasters and other potentially catastrophic events
represent typical examples of sudden crises in that they occur suddenly and with limited
warning. Other examples include incidences of workplace violence, product tampering, sabotage,
technology disruption, death of an executive, and terrorist attacks.
Smoldering crises are business problems that start out as small, internal problems within
a firm, which when they become public to stakeholders can escalate to crisis status as a result of
inattention by management. According to the ICM database, nearly three-quarters of all business
crises fall in the smoldering crisis category. Consider, for example, the plethora of cases of
corporate fraud, mismanagement, labor disputes, and class action lawsuits reported in the news
media in the early 2000s. Smoldering-like crisis situations typically result from the simple day-
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For information on the Institute for Crisis Management refer to http://www.crisisexperts.com/.
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to-day work performed in an organization and often take the form of management mistakes that
have built up over a period of time (Caponigro, 2000).
The classification of crises helps students understand the role of signal detection when
preparing for a crisis. In the signal detection phase, the role of leadership is to decipher triggers
that may alert the organization of an impending crisis. Triggers can manifest as specific activities
or from information presented to the organization, and in turn raise a red flag to organizational
members (Hensgen, Desouza, & Kraft, 2003). Triggers are enhanced, suppressed, or ignored
depending on the culture of the organization and the competencies of its leadership. The ability
to respond to a crisis signal demands scanning the internal and external environment with a
mindset that anytime the organization is not in crisis, it is in prodromal mode (Fink, 1986). The
early detection, processing, and responding to signals of a crisis can lead to an organization
directing energy to prevent the crisis from occurring or the ignoring of the signals.
Signals of a possible crisis are less evident in many sudden crisis situations, but
smoldering crises nearly always leave a trail of red flags or warning signals that something is
wrong. Unfortunately, these warning signals often go unheeded by management. This likely
occurs for several reasons. First, is an illusion of invulnerability leading people to think that
serious problems only happen to other people. Second, and in a related manner, are ego defense
mechanisms, such as denial, that allow leaders to preserve a pristine image of themselves and
their organizations even in light of information or evidence to the contrary. Third, and even more
troubling, is a failure in signal detection precisely because it is the decision making and behavior
of organizational leaders that are contributing to the pending crisis. This is an all too common
occurrence as represented by data from ICM that more than 50 percent of all crises are sparked
by management activity.
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Through lecture, mini case studies, exercises, simulations, and reflection discussions, we
highlight the importance of signal detection as a task of crisis leadership, especially by focusing
on sense making and perspective taking. In the context of sense making, we outline Weick and
colleagues’ (2005) process of sense making that addresses three fundamental questions: How
does something come to be an event? What does the event mean? What should I do relative to
the event? Answering these questions in the signal detection phase can result in effective actions
that may prevent a crisis. In addition to answering these questions, we bring to the attention of
our students that leaders need the ability to make sense of a series of events that, superficially,
may seem unrelated.
Two possible cases for this segment of the course include the Coca-Cola discrimination
lawsuit and the Ford-Firestone tire recall. There are in-depth newspaper articles that can be
distributed about each of these crises. In the Coca-Cola discrimination lawsuit, there were
several warning signals to which leadership should have been attuned prior to the lawsuit. For
example, the firm’s leaders had been told explicitly that there was a need for greater diversity
throughout the organization. There also was a report by an external consulting firm that provided
data on a glass ceiling – the invisible barrier preventing minorities from advancing beyond
certain levels within the organization (Deogun, 1999). In the case of the Ford crisis, where
defective tires were used on their Explorer vehicles, there were also numerous signs of a pending
crisis that went ignored or undetected by Ford’s leadership (Simison, Lundegaard, Shirouzu, &
Heller, 2000). Some of these warning signals included a memo about supplier quality problems,
reports of accidents, complaints about the vehicles in overseas markets, and reports from their
own risk management department that went unheeded. In both the Coca-Cola and Ford crises,
leaders failed in their sense making by not adequately comprehending or taking the necessary
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actions on key events that presented themselves prior to the crisis.
Complementary to sense making, perspective taking, which is the ability to entertain or
assume the perspective of another, has been identified as a key element of detecting crisis signals
(Wooten & James, 2008). During a crisis, one of the core responsibilities of a leader is that of
ensuring the well-being of those affected by the crisis. Perspective taking allows leaders to better
understand and empathize with others and, in turn, act in the best interest of stakeholders. As
Brockner and James (2006) note, however, when scanning for signals, leaders are inclined to
focus on the perspectives of those who are most vocal in a crisis or who hold the most power of
the organization (e.g., activists or shareholders). This potentially misplaced attention can result
from narrow perspective taking and may lead the crisis handler to neglect other warning signals
of a crisis.
For lessons on perspective taking, the Ford-Firestone product recall crisis can illustrate to
students the implications of poor perspective taking. Had firm leaders put themselves in the place
of the victims or victims’ families they likely would had a more empathic and strategic response
before the crisis smoldered. However, during the signal detection phase of the crisis, Firestone’s
leadership focused on the data (rather than the people) and interpreted the data as being of
acceptable risk (Heller & White, 2000). In this case, the target of interest was the shareholder
rather than the consumer. Firestone was heavily criticized in the media for their slow and
unemotional response.
Another teaching option is to have students debate how Boeing’s leadership team handled
signal detection when an important employee group was disgruntled with management and its
decisions. In 2000, when 17,000 Boeing engineers threatened to strike, management focused on
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the efficiency demands of competitive pressures instead of the needs of its core engineering
personnel (Online News Hour, 2000). During the strike, when the CEO was asked about the
engineers’ demand for respect and the return of a family like culture that existed prior to the
acquisition of McDonell Douglas, his perspective was limited to performance:
We are not a family; we are a team. And we’re looking for the best performers on that
team. We’re looking for the best performance from that team. And that’s not an easy
transition, but it is very important to me (Online News Hour, 2000).
Also, the Boeing case allows student to examine the cost implications when perspective taking is
limited. Boeing was the largest white collar strike in American history, and with 75 percent of
Boeing engineers on strike, delivery of aircrafts was postponed, and new product development
was delayed
A favorite experiential exercise of students for exploring signal detection is Carter
Racing. Carter Racing is a disguised case that depicts a situation in which owners of a race car
must decide whether to race in an upcoming event despite having multiple previous engine
failures. The owners’ career in racing is on the line, and the outcome of their decision to race or
not could either bankrupt the racing team or allow them to purchase a second car and continue to
race the next season. As the professor unfolds information to students or executive audiences,
they become anchored around a particular piece of data that is presented in the first set of
information and ignore other signals. Despite receiving additional subsequent data that might be
even more relevant to their decision making, students are narrowly focused on what they
received initially. The vast majority of the groups’ decisions hinge on that initial data, and they
neglect sense making of the other data. Yet, if participants of the Carter Racing simulation more
carefully considered subsequent information, they would realize that the data they were anchored
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on are among the more irrelevant pieces of information, and that the other data points suggest
catastrophic outcome if a team decides to race.
Also the Carter Racing experiential exercise brings to the attention of students that a
barrier to signal detection is the tendency to seek out information that supports existing instincts
or viewpoints while avoiding information that contradicts it. In the classroom, we discuss how
leaders solicit confirmatory information to preserve their egos because they want to be right or
avoid just being wrong. Consequently, this limits a leader’s ability for sense making or
perspective taking by narrowing the set of people, resources, and other sources of data to those
that he or she feel reasonably confident will support their viewpoints. In the Carter Racing
experiential exercise, when deciding whether to race in the final race of the season, despite
unexplained engine failure, students subtly and unconsciously look for information that supports
their desire to race. This includes discounting data provided by the mechanic that conflicts with
their desired choice, and even diminishing the relevance of the mechanic’s qualifications. In
sum, anchoring on a particular piece of data and seeking confirming information are decisionmaking heuristics. The Carter Racing case study provides extensive opportunity to discuss these
and other decision-making biases that potentially adversely affect decision making in times of
crises.
To debrief the Carter Racing exercise, we converse on how leaders can excel at crisis
signal detection. We contend that leaders should recognize that their own ability to detect a crisis
can be accurate, but it should be talked about with others by soliciting perspectives from a
variety of sources. This is particularly true if leaders are seeking input from subordinates.
Leaders have to recognize that when an organization’s culture has a track record of shooting the
messenger for delivering bad news or providing information that contradicts that of a superior,
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they are likely to only receive information that confirms their point of view. Peers and
supervisors may be more willing to challenge the assumptions of leaders and encourage them to
think about the crisis signals from an alternative perspective because of a different set of power
dynamics. Effective crisis leaders examine all the ―signaling‖ data with equal rigor and pause
and reflect when they find they are dismissive of some information and accepting of other
information. Moreover, these leaders specifically identify someone to challenge their point of
view of the crisis signals by asking the person to play the devil’s advocate by countering or
questioning the assumptions.
Preparing and Preventing Crises
The preparation and prevention phase is one in which leaders engage in activities to plan
for or avert a crisis. These activities may include developing crisis policies and procedures,
identifying a crisis response team, and performing crisis drills. As Pearson and Mitroff (1993)
caution, the preparation and prevention stage of crisis management should not imply that the
goal for leaders is to prevent all crises. This would be impossible. However, with some realistic
planning and expectations, leaders will be better positioned to prevent some crises and better
able to manage those that are unavoidable.
When an organization invests time and resources into preparing for a crisis, it becomes
agile in its response to a crisis (Wooten & James, 2008). For an organization to be agile, its
leaders must have a thorough knowledge of all aspects of the business, and how work across
organizational functions, departments, or silos accomplishes a task. In preparing or planning for
a crisis, the ability to be organizationally agile is critical because although a crisis event may
initially affect one aspect of the business, ultimately the entire organization, including its
reputation, may be at stake. Thus, when planning for a crisis, leaders should consider the
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organization in its entirety. When leaders understand all aspects of the organization and create
networks in different areas, they can make more comprehensive crisis prevention plans and span
organizational boundaries to get things done.
Often in this segment of the course, we have lively discussion of how Wal-Mart
demonstrated organizational agility in its preparation and management of Hurricane Katrina. In
contrast to government agencies that did not react until days after Hurricane Katrina hit land,
Wal-Mart marshaled its extensive distribution network and stocked its stores with the frequent
supplies that are normally purchased during a natural disaster. Wal-Mart was able to serve gulf
coast areas better than other companies or public institutions (Newsmax.com, 2006). Wal-Mart’s
efficiency, in contrast to government agencies that did not react until days after the hurricane,
was the result of a CEO who used his previous logistics experience to manage stores during
Hurricane Katrina and was able to assemble a cross-functional emergency operations designed to
quickly bring together people from different groups in Wal-Mart for decision making and to set
priorities for tasks (Sullivan, 2005).
Another concept that we bring to the attention of our students during this phase of the
course is high-reliability culture. A high-reliability culture emphasizes the safety of stakeholders
and reliability in the decision-making process as the dominant output value by fostering
mindfulness. This type of culture is appropriate when management of the unexpected is needed
to prevent accidents or minimize the consequences of accidents under difficult situations.
Typically, high-reliability cultures are the norm in hazardous, fast-paced, technologically
complex work environments that are error-free for long periods of time, but are designed to
manage unexpected events, such as nuclear power plants, fire fighting units, and emergency
medical units of hospitals.
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When leaders prepare for a crisis, they can learn from the norms of high-reliability
cultures. The core cultural norm is a mindfulness of five principles: 1) preoccupation with
failure; 2) reluctance to simplify interpretations; 3) sensitivity to operations; 4) resilience
capabilities; and 5) deference to expertise. The mindfulness of these five principles provides the
organization with a compass for perceiving, thinking, and feeling in relation to problems, which
transforms into the organization’s practices and actions. Integrating these five principles into the
an organization’s leads to members knowing that errors are unacceptable and they must plan for
crises.
Often these practices demand that the organization is in a constant state of unease by
anticipating different scenarios and being prepared to deal with these situations. Therefore, we
introduce creativity as a leadership competency associated with the preparation and planning
phase of a crisis. The concept of creativity in the workplace most often refers to the production
of new or useful ideas, products, services, processes, or procedures (Amabile, 1996). To our
students, we assert that creativity is necessary during the crisis preparation and prevention phase
because leaders need to think about how an organization is vulnerable to a crisis, and then plan
for multiple contingencies.
This requires an ability to brainstorm and imagine in ways that go beyond the traditional
thinking about corporate concerns. Also, competent leaders go beyond brainstorming the
organization’s vulnerability to identify full-fledged scenarios of possible events. These scenarios
then can be used as the foundation for preparing the organization for how to respond if an actual
crisis occurs by allowing decision makers to experiment with possible actions and hypothetical
consequences (Moats, Chermack & Dooley, 2008). Scenario planning for a crisis helps leaders
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create cognitive maps that provide a reference point and increase one’s ability to navigate
unfamiliar terrain (Weick, 1991).
For our students, we designed a team exercise on scenario planning. Traditionally,
scenario planning has been used as a tool for long-term strategizing by analyzing the nature and
impact of uncertain and important driving forces in an organization’s environment. During
scenario planning a group creates a series of ―different futures‖ generating scenarios from a
combination of known factors, such as demographics, with plausible alternative political,
economic, social, technological, legal, natural environment, and global trends that are key
driving forces (JISC Infonet, 2009). Therefore, the scenarios created are based on information,
but have an element of imagination of an alternative future environment in which organizational
members can reflect on current thinking, brainstorm future actions, and improve decision
making.
In the context of preparing for a crisis, scenario planning enables students to develop a
mindset for ―thinking about the unthinkable‖ (Kahn & Wiener, 1967). This is because students
create multiple scenarios of different futures that depict uncertain, unpredictable, unstable ranges
of future possibilities for a situation, organization, or industry. Moreover, scenario planning
demands students engage in anticipatory thinking elements that are difficult to formalize, such as
subjective interpretations of facts, shifts in values, new regulations or inventions (JISC Infonet,
2009). The general steps of scenario planning include selecting a focal issue to create scenarios
around, examining the driving forces that impact the focal issue, creating a narrative for each
scenario that is supported by data, and action planning (Wilson & Ralston, 2006).
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In the team activity we give students a smoldering crisis that is strategic in nature. From
this limited information, they are asked to use general knowledge or information from public
sources to create scenarios. For example, we have used the demise of the newspaper industry as a
focal point for scenario planning of a smoldering crisis. Our students take on the role of a
newspaper executive, such as CEO of the Boston Globe or Seattle Times. Students are given data
about declining profits and new forms of competition in the newspaper industry. They are
charged with creating 3-4 scenarios that could possibly portray the future of this industry. We
encourage students to come up with catchy names, images, and detailed storylines for each
scenario, such as a ―World without Newspapers‖ where newspaper do not exist and consumers
receive their news from the Internet, television, and radio or ―National News Rules.‖ After the
creation of several scenarios, students conduct feasibility analysis and an action plan for each
scenario. For the action planning, students are asked to create a plan that is aligned with the
organization’s resources and takes into account multiple stakeholders.
The scenario planning exercise helps students realize that sometime crises occur because
the future can differ greatly from how leaders currently conceptualize it (JISC Infonet, 2009).
Scenarios expose gaps in the knowledge base of organizations that members can address and
include in the organization’s crisis management plan. By engaging both the left and right sides of
the brain, scenario planning prevents decision-making paralysis when a crisis occurs through
previous exposure to a varied situation that one extracts to make decisions (Moats, Chermack, &
Dooley, 2008). Furthermore, scenario planning is an exercise that engages students in thinking
and doing, and this help them learn crisis planning skills, but it underscores the importance of
flexibility to adapt to changes as a crisis unfolds.
Crisis Containment and Damage Control
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When most leaders think about a crisis, the responsibilities associated with containment
and damage control tend to preoccupy their time and attention, since these are the critical steps to
business recovery. Crisis containment is defined as the decisions and actions aimed to keep the
crisis from getting worse (Mitroff, Pearson, & Harrington, 1996). During the crisis containment
phase, leaders focus on limiting the reputational, financial, and other threats to the organization’s
survival in light of the crisis. This is achieved, for example, by activities that limit the
encroachment of a localized crisis into otherwise unaffected parts of the organization or the
environment. Leading in this phase of the crisis entails: 1) acting quickly and decisively, 2)
creating an adaptive organizational culture, and 3) communicating liberally (Harvard Business
School Press, 2004).
Decision Making Under Pressure
Last semester with our students and executive education participants, we used articles
and video clips of the 2009 landing of US Airways Flight 1549 to illustrate the power of
effective decision making under pressure. Although not a typical organization, or starring a
―leader‖ in the traditional sense of the word, the ―Miracle on the Hudson‖ is a striking example
of successful handling of a crisis. Shortly after takeoff, flight 1549 left New York’s LaGuardia
Airport headed for Charlotte, North Carolina. Within minutes after takeoff flight 1549 struck a
flock of birds, debilitating two engines. Immediately, the flight’s lead pilot, Captain
Sullenberger, had to make a series of potentially life or death decisions. He opted to land the
plane on the Hudson River rather than attempt to make it back to the airport. With the words,
―Brace for impact because we’re going down,‖ Captain Sullenberger safely landed the jet in the
Hudson River where the plane stayed afloat long enough for all 155 passengers to be rescued
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from the water. The pilot’s ability to make quick decisions under pressure and execute his plan
resulted from both his leadership and a supporting crew that had trained for potential crashes.
Over the life of his 40-year career, Captain Sullenberger spent hours training and
preparing for flight landings, such as the one on the Hudson River. Captain Sullenberger’s career
experience included commercial and military piloting. During his career, he had worked as a
flight instructor, accident investigator, safety chairman of the Air Line Pilot Association, and
wrote a paper on error-inducing contexts in information. Captain Sullenberger’s career
experiences suggest expertise in his trade and a preoccupation with preventing or developing
solutions for system failures.
Captain Sullenbeger was not alone when he safely landed the plane and saved all its
passengers. He had a supporting flight crew that was trained to handle emergency landings. To
prepare for crisis situations, air crew training entails the sophisticated use of complex simulations
and exposure to research into past accidents that reveal mistakes that cost lives or strategies that
save lives (McCartney, 2009). Also, in some training sessions both pilots and flight attendants
work together on emergency scenarios so that the entire crew has the experience of learning how
to coordinate their efforts, develop sensitivity to each other’s operations, and make decisions in
tandem during a crisis.
Creating an Adaptive Organizational Culture
During a crisis, an organization’s culture adapts its shared basic assumption as members
solve problems by working together and adapting to external pressures. Since the rules of the
game change in a crisis situation, leaders may recreate norms for how to get work done, such as
redistributing power, new communication patterns, a different orientation to stakeholders, and
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innovative working styles. The adaptive cultural norms help organizational members respond to
the environment by providing a shared approach for collective action and reducing uncertainties.
For a session on adaptive cultures in a crisis situation, we review the Competing Values
Framework of organizational culture (Cameron & Quinn, 2006). As presented in Figure 3, the
Competing Values framework depicts the competing and seemingly paradoxical requirements
necessary to employ culture as a vehicle for organizational effectiveness. The framework
identifies the major competing tensions, which are represented on the x axis as ―an internal vs.
external orientation.‖ On the y axis is ―flexibility vs. focus.‖ In a lecture, students identify the
cultural enablers of each quadrant that can be adapted to a crisis situation.
The Apollo 13 DVD or Useem’s (1998) book chapter on ―Eugene Krantz Returns Apollo
13 to Earth‖ can be used to map out cultural enablers in a crisis situation. Both the DVD and the
video illustrate how flight director Krantz employed cultural enablers to safely lead Apollo 13
back to Earth after the space shuttle’s service module exploded. Despite negative odds, Krantz
built a team culture around the norms of optimism and communicated that failure was not an
option. He encouraged the team members to focus on keeping their cool and solving the problem
by focusing on what was working (Useem 1998). Trust based on expertise and preparation
supported the cultural norms that Krantz infused throughout the ―Tiger Team.‖ Krantz put the
team through flight simulations so that they could make correct decisions under time pressure
and organized the flight teams into sports leagues so they could learn to compete as a team.
Our students observe that Krantz adapted the organizational culture during a crisis by
building collaborations and infusing a positive frame of mind to work through problems and
develop solutions in a time-pressured, emergency environment. Krantz’s cultural ideology
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centered around a sense of hope that required the team to reframe the problems in terms of
potential solutions, and enabling resourcefulness by encouraging the innovative use of talents,
supplies, and equipment (Glynn & Dutton, 2007).
Communicating Effectively
Perhaps the competency most closely identified with crisis leadership is the ability to
communicate effectively. Very often, the type of communication observed during a crisis event
is one that is rooted in the public relations tradition and attempts to position the firm or the
problem in relatively favorable terms. In other words, crisis communication is used to positively
shape the stakeholders’ perceptions of the crisis and the organization (James & Wooten, 2006;
Coombs, 1999). During the damage control or containment phase of a crisis, leaders will identify
and connect with key organizational personnel, provide or solicit necessary information and
instruction, and attempt to restore calmness or provide reassurance to affected constituents.
Depending on the type of crisis, leaders also may need to be persuasive, confident, or empathic
in their messaging.
Developing communication competencies for crisis leadership is the ideal place in a
course to use a simulation or role-playing activity. Two that we have experience with are Priority
Inc. (Darden Business Publishing) and Pharmeck Leadership Crisis Challenge (William
Davidson Institute). Priority Inc. is a multi-media-based crisis simulation where students work in
teams and assume the roles of top management responsible for managing the crisis. The firm,
Priority Inc., is undergoing a major ethical breach that has evolved into a crisis for the firm. The
crisis scenario requires that students address competing stakeholder interests, which creates
complexity in the decision-making process. The simulation incorporates an ethical decision-
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making framework throughout the scenario, and at key points students are being judged on their
ability to communicate with three stakeholder audiences – employees, customers, and corporate
analysts. These evaluations are based on the quality of team decisions. Similarly, in the
Pharmeck Leadership Crisis Challenge, student teams take on the role of pharmaceutical
executives who have just received news that an Indian subsidiary may be linked to mercury
contamination in India. Students are responsible for crafting and delivering a press conference
that addresses the crisis situation and the position the company will take moving forward in the
future. Local news reporters and communications faculty serve as evaluators of the press
conference.
In debriefing the simulations, we emphasize to our students that what elevates a leader’s
competency in communicating effectively during a crisis is his or her ability to connect
emotionally and psychologically with an audience and influence the audience’s opinion of the
organization in such a way that opinions are the same or more favorable in the midst of and
following a crisis than they were at pre-crisis times. What often hurts an organization in crisis is
a lack of transparency, as well as communication messages that are interpreted as defensive.
Hence, effective crisis leaders will be proactive and forthcoming in their communication during a
crisis, and will adopt a posture of acknowledgement and accountability (James & Wooten, 2006).
Business Recovery
One of the ultimate goals of any crisis situation is to get back to ―business as usual.‖ In a
midst of a crisis, executives are constantly trying to reassure stakeholders that, despite the
disruption, business affairs are operating smoothly or will be returning to normal soon. In the
business recovery stage, astute crisis leaders consider both short- and long-term recovery efforts
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and think beyond the business as usual paradigm to a business anew paradigm. This calls for
thinking differently about what is possible for the organization (Brockner & James, 2008).
The ability to lead an organization to such an outcome can be described as resiliency.
Sutcliffe and Vogus (2003) define resilience as the maintenance of positive adjustment under
challenging conditions. Resilience or resiliency is a competency in that it reflects a capacity for
individuals to absorb strain and improve functioning in the face of adversity. Said differently, it
is a person’s ability to bounce back in a new and improved way following a difficult situation
(Sutcliffe & Vogus, 2003). Likewise, from an organizational perspective, resilience is the
capacity for continuous restoration when bouncing back from a crisis by innovating values,
processes, and behaviors.
Our students become very engaged when we use the ―Martha Stewart Whipping up the
Storm‖ case series (Darden Business Publishing) and supporting video clips to discuss business
recovery and resilience after a crisis2. These cases are based on the Martha Stewart Omnimedia
Inc (MSO) scandal which the firm confronted when its CEO and corporate icon was being
prosecuted for insider trading of ImClone stock. To recover from this crisis, MSO’s corporate
board re-conceptualized its business beyond Martha Stewart (Alva, 2002). The brand was
reconfigured to include celebrity partnership, such as with Food Network star Emeril Lagasse,
and to de-emphasize Martha Stewart’s personal image. When Martha Stewart was released from
prison, the MSO’s leadership team focused their energies on creating new businesses and
expanding the firm’s core competency of ―domestic arts.‖ The expansion resulted in partnerships
with grocery store brands and merchandising alliances with Macy’s and KB Homes. In addition,
2
These cases can be obtained from Darden Business Publishing, ―Martha Stewart: Whipping Up a Storm (A&
B).
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the company took advantage of technology by investing in a satellite radio station and enhancing
its Internet presence with videos, blogs, and domestic arts knowledge centers.
Learning and Reflecting
The prior crisis management phases mainly address leadership responsibilities and
requisite competencies at the outset and during a crisis. As we have discussed, effective crisis
management skills in these prior stages can bring an organization back to at least a pre-crisis
level. Unfortunately, there is often a tendency for leaders to stop crisis management activity at
the business recovery phase. Yet some scholars (Mitroff, 1988; Wooten & James, 2004) suggest
that exceptional crisis management also includes post-crisis activity in the form of learning and
reflection. Crises can be seen as sources of opportunity, rather than threats, when organizational
decision makers adopt a learning orientation and use prior experience or the experience of others
to develop new routines and behaviors that ultimately change the way the organization operates.
The best leaders recognize this and are purposeful and skillful in finding the learning
opportunities inherent in many crisis situations. Bringing a learning orientation to a crisis
situation enables leaders to be more adaptive in their response to challenges and setbacks.
Learning and reflection throughout the crisis management process and following the crisis
resolution stages can promote innovation and creative problem solving, and institutionalize
systems that help the organization prepare for future crisis events.
To expose our students to the importance of learning during and after a crisis, we have
used the B&O Railroad Museum cases and DVD (William Davidson Institute, 2009;
Christianson, Farkas, Sutcliffe, & Weick, 2008), and in one instance have taken students to the
museum for a field trip and presentation by the museum’s executive director, Courtney Wilson.
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This series of case materials lends itself to a role-playing exercise by having students take on the
role of the museum’s executive director. Students are asked to map out how a learning
organization of the museums’ volunteers, employees, and supporters was created to restore the
museum after a blizzard resulted in a collapsed roof that damaged many of museum’s artifacts.
In Figure 4, there is a tool for mapping out organizational learning during a crisis that students
can use3. It is a modified version of an emergent learning map created by Signet Consulting.
Emergent learning maps capture collective learning based on the system of plan-act-observereflect-adjust. In this modified version, students can begin with the framing question ―What will
it take for us to learn from this crisis,‖ and then the group documents improvement areas and
what worked well in the organization. The right side of an emergent learning map calls for the
team to think futuristically about how the organization can be successful after the crisis and to
identify opportunities to display its successes.
In the case of the Baltimore & Ohio Railroad Museum, when our students map out the
organizational learning from the case materials, they discuss how the crisis revealed that the roof
was structurally unsound, the museum’s collection was under-insured, and the emergency
response plan was inaccessible because it was buried in the rubble (Christianson, Farkas,
Sutcliffe, & Weick, 2008). Yet before the collapse of the roof, leadership had invested in
practices that helped with resolving the crisis, including how to enact timely, consistent, and
coordinated communication with the media. When the crisis occurred, the Baltimore & Ohio
Railroad Museum’s staff was prepared to handle inquires from the media and launched a Web
site to collect donations for restoring the museum.
3
For additional information on Emergent Learning Maps refer to
http://www.signetconsulting.com/methods_stories/proven_methods/emergent_learning_EL_Maps.php.
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In addition, students comment on how learning occurred by improvising and restructuring
tasks. The improvising for this crisis team began with staff members tearing up their job
descriptions and reorganizing into three core departments: Administrative and Development,
Facilities and Security, and Operations. Dropping formal titles allowed team members to see
things differently and experiment with new behaviors for purposes of adaptation and flexibility.
New skills emerged from team members; for example, the museum’s director of Development
and Sponsorship Programs used the skills acquired from working in her father’s CPA firm to
manage insurance claims. Similarly, companies working to rebuild the Baltimore & Ohio
Museum became flexible and expanded their job roles. This was the case when the operations
team was not allowed around the museum area while steel workers were cleaning the debris. Yet,
there was a need for decision making on what rubble could be discarded and what needed to be
saved for restoration. As a solution to the problem, curators trained steel workers on how to
identify important museum artifacts. In addition, the improvising forced staff members to
interact with different functional areas. For instance, before the collapse of the roof, curatorial
staff and administrative staff had a tense relationship with defined organizational boundaries, but
after the crisis the departments communicated freely with each other.
Furthermore, the Baltimore & Ohio Railroad Museum case allows students to identify
organizational learning activities that were investments in the organization’s future. Instead of
focusing on just restoring the museum, the teams were able to re-envision its identity and value
proposition (Christianson, Farkas, Sutcliffe, & Weick, 2008). With the support of the museum’s
board of directors, team members began to see the crisis as an opportunity to take the museum
into a new direction. A tangible outcome of this process was a rebuilt museum with six new
buildings and over 72,000 square feet of additional space. This transformed the Baltimore &
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Ohio Railroad Museum into one that could attract a bigger audience and host large-scale events
and more exhibits. Intangibly, the opportunity presented by the collapse of a roof generated
learning of new skills, such as in-house train restoration shop, fundraising, and marketing.
In summary, this segment of the training on crisis leadership and organizational learning
demonstrates to students the importance of learning by revising response repertoires to improve
an organization’s performance during and after a crisis (Christianson, Farkas, Sutcliffe, &
Weick, 2008; Huber, 2004). This involves learning by organizational members with respect to
revising routines, habits, and roles in novel ways. Moreover, the Baltimore &Ohio Railroad
Museum case materials encourage students to reflect on how a crisis is an opportunity that
motivates leaders to change in ways they may have not previously considered (Brockner &
James, 2008). The changes can be procedural (how things are done in the organization),
outcome-based (what gets done in the organization), or both (new procedures yielding new
products or services).
Conclusions
As stated in the introduction, our general approach for teaching crisis leadership is
embedded in the research on positive organizational scholarship (POS). We believe that leaders
who ―dare to care‖ during the crisis management phases develop the competencies to enable
human excellence in organizations through unlocking strengths, discovering possibilities, and
facilitating a positive course that takes into account human and organizational welfare
throughout the crisis management process. Moreover, as portrayed in Figure 5, we underscore
that crisis leadership is a balancing act of competing demands. The framework and teaching
ideas offered in this manuscript are particularly relevant for developing skills to lead under
pressure and to balance competing demands in a crisis situation.
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Our teaching approach for crisis leadership provides a different set of capabilities than
what might be required when one is focused solely on the tactical aspects of crisis handling.
Namely, crisis leadership is about confronting threats and taking appropriate risk at precisely the
moment at which one’s natural human tendency would be to retreat and become defensive and
risk averse. Crisis leadership is about being open to learning, especially learning from failure,
whether it is one’s own or others. It is about making consequential decisions under enormous
pressure for circumstances never before experienced. Crisis leadership is about leading teams
and inspiring the capabilities of organizational members throughout the organization. It is about
fostering trust with stakeholders so that they devote their full energy to work with leaders and not
against them. It is about fostering a global mindset so that organizations can work across borders
and share information that will facilitate crisis handling. Finally, it is about doing all of the above
in full view of every possible stakeholder each of whom have different needs to be met and will
pull leaders in different directions. Hence, these are the competencies that we hope students take
away from our teaching this topic, and in turn becom e ―renaissance‖ leaders in crisis situations.
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Figure 1
Learning to Lead in Crisis Situations
The understanding of causal
relationships associated with a
crisis
Explanation-Based Learning
•Cases
•Lectures
•Videos
•Guest Speakers
Applying & testing mental
models to crisis situations
From Reactive to Proactive
Sensemaking
Real Time Leadership
Generative Learning
Collective Resourcefulness
Stakeholder Management
Fostering Resilience
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Experiential-Based Learning
•Simulations
•Role Playing
•Action-Based Learning Projects
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Figure 2
Phases of Strategic Leadership
Competencies in Times of Crisis
Signal
Detection
Crisis
Prevention
Preparation
Competencies
Containment
& Damage
Control
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Business
Recovery
Reflections on
Crises
As Opportunities
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Figure 3
The Competing Values Framework of Organizational Culture
(Cameron, Quinn, Degraff & Thakor, 2006)
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Figure 4
Modified Emergent Learning Map
Framing Question
What will it take for us
to… ?
PAST
FUTURE
How can we… ?
Thinking about the future:
What we think will make us
successful in the future?
Thinking about
the past: What
we’ve learned
that works well?
HYPOTHESES
INSIGHTS
IMPROVEMENT
AREAS
Past actions: Key moments
looking back from which we can
learn?
OPPORTUNITIES
Future actions: Upcoming
opportunities to test our
hypotheses in action?
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Figure 5
Crisis Leadership as Balancing Act
The Future
Flexibility
Creativity
External Stakeholders
Global Demands
The Presence
Focus
Control
Internal Stakeholders
Local Demands
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