Leadership Company in Crisis When

Leadership

Company in Crisis

When a company is in crisis, do you believe that a radical change in leadership (who is in charge) is required to turn the company around? Support your position.

Obviously, a company in crisis is an extremely serious situation, and drastic steps have to be taken to recover from the crisis. Two experts note, "One cannot overstate the notion that crisis situations and the handling of them literally can make or break a firm's long-term reputation" (James and Wooten). Removing management during a crisis can be the way to solve at least some crises, especially if management is responsible for the crisis, or is responsible for a bad or poor reaction to the crisis. In this case, it would probably be more effective to remove the manager (or managers), and bring in new leadership to manage the crisis.

On the other hand, retaining management during a crisis can help add a sense of normalcy to the situation, and may help others better manage and eliminate the crisis. An experience manager is also more familiar with the company, its procedures, and the best way to deal with the crisis using existing company resources, if that is possible, and so, they may be the most prepared and best choice to help manage a company in crisis. New leadership, brought in to manage a crisis, would have to familiarize themselves with the company and its operations, which could lead to a slower reaction to the crisis. Using existing management means they can hit the ground running to come up with solutions to manage the crisis and save the company from further damage.

Another important consideration in crisis management leadership is the ability of the leader to return the business to everyday operations. If the leader is quite capable of managing during non-crisis situations, but does not have experience or training in leading a crisis situation, it may be more effective to bring in a crisis manager, if only temporarily, especially to help return the business to normal and successful operations. Many companies specialize in providing crisis managers in these situations, to help existing leaders or to lead on their own. This makes sense if the leader has little experience in crisis management, or is unable to successfully bring the company back to normal operations after a crisis situation. Removing a trusted and well-liked leader, however temporary, could harm morale and employee productivity, as well, so these are also important considerations in deciding whether to bring in a crisis manager. In the long run, it may be more effective for the company to bring in a crisis manager, who can end the crisis quicker and get the company back to normal operations as soon as at all possible.

Effective leadership during a company crisis depends on many of the foundations of leadership. Trust is especially important during times of crisis, and leaders who have developed trusting relationships inside and outside the company will usually prove to be extremely effective crisis managers. In addition, it is important for leaders to make ethical and well-balanced decisions that will not lead to crises in the first place. The authors continue, "The challenge we pose to corporate leaders is to create a new, more expansive mindset where they will be forced to make decisions that reduce the likelihood that crises will emerge" (James and Wooten). Good leaders will rely on a variety of input and ideas to help manage and solve crisis situations, and acting ethically in all operations is one way to avoid these situations before they begin. Thus, maintaining the right leadership standards in the organization can help (at least in part) ensure that crisis situations do not occur, and if they do occur, the leaders in place are trained and capable of handling the crisis without the need to bring in experts in crisis management. It the corporation is ethical and without fault, then they will face fewer crises, and they will promote leaders capable of managing in crisis and during calm periods.

It is important to remember that any company can face a crisis, and there are different levels of crisis that can affect a company. Therefore, leadership should always be trained in crisis management techniques. It is also important to remember, that in a major crisis, leadership throughout the company will be challenged to come up with solutions and help manage the crisis, and so, many different leaders, from PR representatives to top-level managers will be included in crisis management. It would not be feasible to bring in new leadership in all these positions, and so, retaining existing leaders and making sure they are competently trained in crisis management techniques makes the most sense in most situations.