The CEOs of Wells Fargo and EpiPen manufacturer Mylan were both recently lambasted at Congressional hearings for unethical business practices.
These high-profile examples are a timely reminder that business crisis situations, whether they’re the result of questionable executive judgment, industrial accidents, violence, or natural disasters, are the ultimate leadership challenge.
Intense public scrutiny and 24/7 media coverage mean that leaders’ actions and – even more importantly – their reactions are both high-stakes and high-visibility.
Indeed, how leaders react to a crisis can make the difference between successfully navigating through turbulent times and crashing on the rocks. Individual and organizational reputations are on the line.
But here’s the rub: When leaders and their board directors are under pressure, they – like all people – are at greater risk of behaving in ways that are defensive and maladaptive. Let’s take a look at the most common ineffective responses to crisis situations.
Five Deadly Leadership Behaviors
1. Denial: outright rejection of unacceptable facts or feelings. (“There is no problem.”)
2. Minimization: lessoning the importance of a fact or situation (“It’s not material to our business or stakeholders.”
3. Rationalization: justifying an action or stand (“Everybody’s doing it.”)
4. Black-white thinking: all-or-nothing approach (“We’re right, they’re wrong.”)
5. Projection: redirecting an unacceptable attribute to someone else (“We’re not the problem, they are.”)
These behaviors are dangerous for three reasons:
First, they can be triggered unconsciously as a kind of automatic “fight or flight” reaction.
Second, they produce exactly the opposite of the desired effect, which is restoring trust. Instead, the public sees these behaviors as self-serving, which reinforces skepticism and further erodes leader credibility.
Third, they can distort or limit how leaders interpret critical information. This in turn can compromise their ability to take accurate corrective action.
Public trust in CEOs is at extremely low levels, with leaders around the world seen as underperforming significantly in the areas of personal integrity and customer and employee engagement. (Source: Edelman Trust Barometer, 2016)
So it is absolutely essential that decision makers be aware of these five common defensive responses and avoid actions that will further alienate stakeholders and the public.
Of course, the smartest course for top executives is to avoid problematic practices and misconduct. But this is not always possible, especially where rogue actors, sabotage, safety violations or accidents are involved.
How can leaders behave in ways that restore trust in themselves and their companies? I will discuss specific steps in a future post.
Copyright © Susan Battley. All rights reserved.