DRG Memo

Crisis Management: A Leadership Imperative

by Frances Hesselbein

Reprinted by Permission. Leader to Leader, No. 26 Fall 2002. www.leadertoleader.org. For additional Leader to Leader information contact them at jbsubs@jbp.com or (888) 378-2537.

Crisis management is not a discipline to be learned on the job, in the midst of the storm. It must be learned and practiced when there's not a cloud in the organizational sky. Now, more than ever, examples of crises badly managed in all three sectors underscore the imperative of preparing for a crisis that may lie ahead, that may never happen, that even so must be anticipated by responsible, effective leaders.

There are too few outstanding examples of leaders who understood the imperative, who prepared the organization for an emergency, who instilled values that would support a powerful and ethical response, and who -- when the crisis hit -- led from the front and communicated in an open and powerful way. These few prepared when the sky was blue and took costly action -- a wise investment, actually -- that protected the public and, in the end, the good name and the future of the enterprise.

In the end, crisis management is a test of the quality and character of leaders as much as it is a test of their skill and expertise. Organizations that cope well with crises have put their houses in order; they know what their values are and have a well-articulated mission that permeates the organization. They know what they stand for. Crises can strengthen these organizations, even as they undermine -- or destroy -- those that do not know what they stand for. Even in a crisis, leadership is a matter of how to be, not how to do it. Yet there are still steps that wise leaders will undertake.

Probably the most positive and successful example of managing a crisis with total success is the way James E. Burke and Johnson & Johnson handled the Tylenol crisis in the early 1980s. When it was over, Jim Burke was an icon and Johnson & Johnson a celebrated corporation. His is a case study of what happens when a corporate leader -- guided by the beliefs and values that define the culture of a great corporation -- communicates with clear and forthright messages, reassuring the public and the people of the corporation. Today, despite predictions at the time that Tylenol was a fatally wounded brand, it is still one of the top-selling over-the-counter drugs in the country. John Joseph of the Wharton Center for Leadership and Change says, "Johnson & Johnson's corporate credo -- overseen by top management but mastered by all -- steered the company successfully through its Tylenol crisis in 1982 and continues to serve as a compass by which the organization guides itself today." Johnson & Johnson's management of the Tylenol crisis continues to be the standard against which many observers measure the management of the long line of current crises that are part of the landscape in all three sectors.

A more recent example of powerful and successful crisis management came on September 11, 2001. The world watched heroes -- firefighters, police officers, medical personnel, and rescue workers -- respond to the unimaginable disaster. Skills they learned and practiced in hundreds of different crises prepared them for the ultimate challenge. The many teams became one team, and their enormous courage, passion, planning, preparation, and total commitment inspired the country and the world. They gave us the ultimate example of crisis management on a massive, global scale, and the lessons learned from their response to September 11 apply to whatever crisis leaders may face on any scale in any organization. Some of us who have had the uncoveted experience of managing a crisis in a complex and far-flung organization know from that experience there are some essential steps to be taken by an organization, regardless of size or sector, long before disaster strikes.

A crisis management team needs to undertake a study of every possible crisis that could hit the organization, and develop a scenario for the response to each one. This list of possible crises coupled with the responses required for each takes time and investment, but it is the best disaster insurance we can have. This study is kept in desks, on computers, in easy reach of every member of the crisis management team. Once the plan is ready, the training and preparation for implementation takes place.

Some organizations have the expertise within the enterprise to train and prepare their people for that dark day -- should it come. Other organizations may choose an outside consultant to assist in this demanding management responsibility, the training of those who will lead the response.

Even if, as some of us have personally experienced, the crisis that hit was not on the carefully prepared list of possibilities, the principles are the same, the plan of action works, and the results are positive even though the crisis has a different face from all those we brainstormed. Here are my steps to effective crisis management:

Frances Hesselbein is editor-in-chief of Leader to Leader, chairman of the board of governors of Drucker Foundation, and former chief executive of Girl Scouts of the USA. (6/2002)