Crisis Leadership: Preparation, Not Panic

• Humans are bad at managing crises because they fail to read the signs that portend trouble, and they rarely apply lessons they’ve learned from previous events.
• Leaders tend to respond swiftly to urgent crises, but they often fail to act on smoldering crises.
• To prepare for the next disaster in the making, leaders should constantly scan the news and talk to key people inside and outside of their organizations.

 
As Lynn Perry Wooten gave this interview, Hurricane Ian was churning toward the state of Florida, sending its leaders into crisis mode. The topic of crisis leadership—specifically, why most leaders are so bad at dealing with disaster—is close to her heart. Wooten, the president of Simmons University in Boston, recently examined the subject in The Prepared Leader, a book she co-authored with Erika James, dean of the Wharton School at the University of Pennsylvania in Philadelphia.

“Research on decision-making heuristics shows us that humans tend to ignore a crisis because we think it won’t affect us or we forget how fast it can grow,” says Wooten, whose first academic appointment was at the University of Florida’s Warrington College of Business. “If I was in Gainesville right now, I might be saying, ‘Oh, hurricanes never come to north central Florida. It’s not going to hit us. And if it does, it won’t cause a lot of complications.’ But it’s important to remember that any crisis comes with complexity and speed. Leaders have to keep an eye on the signs, then adjust and adapt.”

While day-to-day leadership tends to focus on the three P’s of managing people, profits, and the planet, Wooten points out that crisis leadership must be narrowly focused on the moment. “Leaders have to solve problems quickly, and they have to do it with incomplete information. They have to take bold risks, hope the risks pay off, and manage what happens next. The key is organizational agility. Leaders must mobilize resources to ensure the well-being of stakeholders and the reputation of the organization, and they must draw on lessons learned in previous crises.”

Wooten recently talked with AACSB Insights to discuss what lessons leaders should look for when disaster strikes—and to warn that the next crisis is already on the way.

Why are humans so bad at planning for disaster?

One reason is that we go into panic mode as we solve one crisis, but then we don’t prepare for the next one. In our book, we call this cycle “panic and neglect.”

Leaders need to ask, “What did we learn from this crisis that we can use moving forward during our day-to-day operations and the next crisis?” The first thing they need to do is conduct an after-action review.

The second thing they should do is ask, “What’s the next crisis on the horizon and how can I do some scenario planning?” For example, people are talking about the lessons we’ve learned from COVID and how we can apply them to monkeypox.

When people are looking ahead for the next crisis, how can they tell what’s a minor inconvenience and what’s going to be a global disaster?

It requires sense-making and paying steady attention to what’s happening. Let’s think about the pandemic. At first, we thought it wasn’t going to come to the United States, but then we started seeing signs that the world was changing. My co-author says it really hit her when the National Basketball Association shut down. For me, it was when I had to start bringing students home from study abroad programs because the pandemic was getting so bad in Europe.

How should leaders make sure they’re always well-prepared?

They should be talking to their direct reports, who should be talking to their direct reports, because the people on the ground have the everyday knowledge. For instance, my building manager and my chief marketing officer see things I don’t see.

Leaders should spend about 10 percent of the week acquiring knowledge about what’s on the horizon, what’s happening in their industries, and what’s happening in their ecosystems.

But it’s also important for leaders to spend time outside of their organizations. They should be involved in multiple communities of practice, in their industries and outside it. When I was dean of Cornell University’s Dyson School of Applied Economics and Management, I was constantly talking to alums from different industries, as well as other business school deans and higher education experts outside the business school. The best-prepared leaders are constantly scanning their environments and drawing expertise from a diversity of people.

I would say that leaders should spend about 10 percent of the week acquiring knowledge about what’s on the horizon, what’s happening in their industries, and what’s happening in their ecosystems. By being constantly in a learning mode—by consuming books, reading the news, listening to others, and asking the right questions—a leader can go from being panicked to being prepared.

A consistent theme in your book is that leaders must surround themselves with good people in order to weather a disaster. Do you need to pull together a different team during a crisis, or can you rely on the one you’ve already assembled?

If you can create a high-performance team that works well on the day-to-day problems, when you get into crisis mode, you can leverage all the expertise in the room. But during a crisis, the team has to be like a jazz band. Certain people have to step up for the solo.

As a leader, you have to ask yourself, when am I the expert? And when I’m not, how can I improvise to get the expertise I need? My expertise is in academic leadership. I started at Simmons in July 2020, just months after COVID hit. The expert who had to step up was my chief administrative officer, because she knew about the buildings, she knew about our COVID testing policy, and she knew where to get all the hand sanitizer. I was also bringing in the public safety department and the chief medical officer. Neither were on our team, but both had knowledge that we needed.

During the early days of COVID, not only did I meet with my own team, but once a week I met with all the presidents of independent colleges in Massachusetts to talk about how we were managing the pandemic and to learn from each other’s knowledge. For example, some of us came together and worked with an agency to negotiate a group rate for testing. We also were able to use each other’s data to track the progress of the pandemic. I could say, “We haven’t had many cases yet, but I know it’s coming, because it’s already in Worcester and Wellesley.”

You emphasize that, during a crisis, leaders must create “swift trust” among team members who might not have worked together before. How can leaders achieve that?

First of all, you need to bring in competent people, like the chief medical officer or the chief finance officer or the person who’s the expert in learning. You want people to believe in you, so competency is important.

Next, you need to communicate, communicate, communicate. And do it through multiple channels—social media, email, meetings, videos. You can never communicate too much.

Now, during the pandemic, part of the communication was letting people know that we were building a bridge as we were walking on it. We had to say, “This is what the data tell us now, but we might have to change our plans tomorrow.” If we made mistakes, we were honest about it. We'd say, “This is what happened, and this is how we’re going to fix the problem.”

When I announced that we were going to start wearing masks, I came into the meeting with a mask on. Symbolic leadership is so important in a crisis.

Let’s take masking as an example. At first, we believed we didn’t need to wear masks, but then we saw from data in other countries that masks decreased the rate of transmission. So when I announced that we were going to start wearing masks, I came into the meeting with a mask on. Symbolic leadership is so important in a crisis.

A crisis is a threat, but it’s also an opportunity. How do you think business schools turned COVID into an opportunity?

You know, I have been in academia all my life, starting with being an undergraduate accounting major at North Carolina A&T in 1984. If you had told me in 2019 that, by 2020, all of us would have been operating business schools without being on campus—and doing it well—I would not have believed you. COVID opened a lot of doors because it showed us how technology can complement everything we do in education.

Another crisis that was concurrent with the pandemic was the social reckoning we saw in the United States with the deaths of George Floyd and others. This social reckoning gave us the opportunity to do a better job with diversity, equity, and inclusion. We’ve been able to rethink what we teach in the classroom, how we diversify the faculty ranks, and how we create cultures of belonging.

Crises require us to ask different questions, make us challenge our theories and paradigms, and pressure us to change. After a crisis, we should ask, “What did I learn that’s making me better?”

Do you have any predictions about what crises we may face in the near future?

I think the world in general will be dealing with more pandemics and the effects of climate change.

I think management education will need to articulate the value proposition of college and create programs that speak to a new group of faculty, students, and staff. How will universities manage the demographic drop as we see declining enrollment?

I think the workforce also is facing a crisis. I recently attended a government meeting where a senator said that about 4 million people have left the workforce for various reasons. How can we restructure business to operate with this new lean workforce?

Some of those seem like disasters that are happening in slow motion.

Yes! In our book, we talk about smoldering and sudden crises. Urgent crises like the pandemic and the hurricane get more attention. We have the attitude that a smoldering crisis might not happen—or it might not happen in our lifetime. More optimistically, we think that we’ll come up with a solution before the crisis gets too bad, but then we tend to neglect it.

We’ve known for a long time that the workforce crisis was coming. Many years ago, when I was a professor at the University of Michigan’s Ross School of Business, we talked about this on a human resources task force. We knew the baby boomers were going to leave the workforce at some point and that Generation X was the smallest demographic we have ever had.

In a smoldering crisis, the situation develops and develops and develops until it turns into a sudden crisis.

These factors have intersected with newer developments. The immigration policy of the United States has changed, so that has affected the workforce. In my own research, I’ve talked about how the pandemic has led to a she-cession, in which millions of women have left the workforce. All the leaders I talk to—at restaurants, hospitals, universities, and corporations—tell me they can’t find enough people to work.

In a smoldering crisis, the situation develops and develops and develops until it turns into a sudden crisis. We’ve ignored the signs about the workforce, but we can’t ignore them anymore.

What can schools do to make sure leaders are prepared to handle smoldering crises?

We need to educate the next generation. Interestingly, I taught the MBA elective for human resources at Michigan. At many business schools, HR is not an important elective. Yet I believe that if we trained more people in HR, we probably wouldn’t be in this workforce crisis.

If we want to address smoldering crises before they become sudden ones, we need to start working on them earlier. Which means we have to ask ourselves those big societal questions.

What final message would you like to leave with deans and business leaders about how to be ready for the next disaster?

Business is one of the most powerful forces in society, and crises are opportunities to step up and show the role it can play. But to really solve these big crises, business must partner with the nonprofit and government sectors. We need mega communities working together to address the world’s problems.