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LEADERSHIPCRISESCrisis LeadershipIt’s all about good judgment.by Noel Tichy and Warren BennisOBVIOUSLY LEADERS NEED TO MAKEgood judgment calls in crisis situations,since crises are, by definition,dangerous moments. But errors atthese times may not be any more fatalthan errors in judgment regardingpeople and strategy. The big differenceis that they are usually time-pressured;hence, dire consequencesbrought on by bad calls at thesemoments often come quickly.We examined judgment calls incrises, not only because getting themright is so important, but also becausethey compress and highlight so manyimportant elements of making judgmentcalls. They require leaders: tohave clear values and know their ultimategoal; to foster open and effectivecommunication among members of thesenior team and in the ranks; to gatherand analyze data; and to execute decisionseffectively. These are elements formaking good judgment calls underany circumstances, but the pressure ofa crisis brings them clearly into focus.In the military, especially duringwar, leaders deal with crises regularlyas part of their role. The stakes are differentin business, but the urgency, theunpredictability, and the seriousnature of the situations are the same.There are important lessons for businessleaders to be found in reflectingon how the military handles crises.The first thing you need to do in acrisis is keep your wits about you.Assess what you are facing, and comeup with the best strategy for achievingyour ultimate goal in the circumstances.Of course, you need to knowyour strategic goal. In a crisis, leadersoften forget the strategic goal—theymay come up with a great solutionthat has little to do with accomplishingwhat they’re supposed to be doing. Ifyou don’t stay focused on the mission,you easily drift into wasted activity.All leaders face crises at some point.Some crises are life-threatening to theinstitution, if not to human life. Crisesnot handled well, where good judgmentcalls were not made, can evenlead to the demise of an institution.Three PhasesGood judgments made during timesof crisis follow the same process asjudgments made under ordinary circumstances.There is a preparationphase, a call phase, and an executionphase. The preparation phase needs tobe done before the crisis occurs.Effective leaders prepare for crisis, evenbefore knowing what crisis will occur.It’s more true in crisis situations thanwith judgments about people and strategythat the likelihood of making successfulcalls is vastly increased if theyare made in the context of a TeachablePoint of View (TPOV) and on the platformof the storyline for the future.Leaders tend to make bad crisisjudgments either because they lack aclear TPOV and storyline, or theymake bad people judgments. To handlecrises effectively, leaders musthave an aligned team. Otherwise, thecrisis situation will splinter the teamjust when smart, coherent action isneeded most. Bad people judgmentsor bad strategy judgments can precipitatea crisis, but once one happens,teamwork and focus make all the differencebetween survival and disaster.Having been in leadership positionsdealing with crises, and having talkedwith scores of leaders about crisisleadership, we can attest that the fundamentalprocess of judgment is thesame as with people and strategy:have a solid TPOV, and make sure thejudgments you make are consistentwith the TPOV, or at least, do not hinderexecution of the storyline forwhere you want to ultimately end up.Blind spots. Most leaders haveblind spots about people. Sometimesleaders have a sense of loyalty to thosewho did something helpful to themearlier in their career. Sometimes subordinatesare talented at the “kiss upand kick down” game. They abusetheir subordinates and undermine colleagues,but they present a picture ofperfection to the boss. This is why 360-degree evaluations are necessary.Leaders also succumb to the haloeffect—when the they generalize theirown talents and abilities to othersaround them. Blind spots cause someleaders to have defensive routines thatblock out accurate data on a person orset up psychological barriers that keepothers from sharing honest feedbackon the person. All of these forces addup to serious bad people judgments,which can create organizational crises.Why are some leaders better able todeal with crises than others? Evenwhen hit with unpredictable events,why do some leaders do a better job ofresponding? How do some leaderseven manage to turn crises into leadershipdevelopment opportunities?The answer is because they anticipatecrises. They aren’t psychics. Theycan’t see into the future and predictrandom events that are going to striketwo days or two years hence. But theyknow that some crises will occur, andthey prepare themselves and theirorganizations to respond effectivelyand efficiently when they do.These leaders know that in order tosurvive crises, perhaps even come outahead, they must have an aligned andtrusted team; a teachable point of viewand storyline for the future success;and a commitment to developingother leaders throughout the crisis.David Novak, CEO of Yum! Brands,and Phil Schoonover, CEO of CircuitCity, are two leaders who have navigatedthrough several crisis situations.They both do three things: 1) theyeffectively, in real time, deal with theircrises; 2) they mobilize, align, andengage the right social network ofleaders by tapping their brains andemotional energy to handle the crises;and 3) they focus on developing theleaders engaged in the process, teachingand coaching in real time.Leaders who succeed in crises developtheir capabilities and build theminto their culture. The conventionalwisdom regarding crisis managementand communication, basically, nets outto be good public relations advice. Itincludes such things as preparation ofLeadership Excellence May 2008 3