Episodes of failed leadership in 2010 taught lessons

By George S. Everly Jr.
Monday, January 3, 2011

Some of the biggest stories of 2010 -- the Bank of America "foreclosure-gate," the BP oil spill and the Toyota recall -- involved corporations that exhibited questionable leadership in times of crisis. When times are tough, when stress increases, leaders may have a tendency to make decisions for expediency and compromise ethical standards.

The aforementioned events demonstrate how leaders can make a situation worse if they do not respond effectively in times of crisis, offering a cautionary tale for business people.

History and current events teach us that the key to survival and even prosperity during a crisis is resilient crisis leadership. In times of crisis, people look for guidance. They seek strength, motivation and direction -- not only from chief executives and presidents, but also from first-line supervisors.

Based on nearly two decades of research, I have discovered that resilient leaders often possess several traits: They are optimistic, innovative, decisive, trustworthy, willing to accept responsibility and able to communicate effectively. In addition, resilient leaders have learned to avoid the following seven pitfalls of crisis leadership:

1) Acting impulsively: Leaders, particularly ones who are green or new to their positions, feel compelled to act quickly or overreact instead of getting a proper assessment of what needs to be done.

2) Delaying action excessively: This is flip side of the acting impulsively coin. Some leaders are hesitant to act because they want more information. Simply put, the moment of absolute certainty will never arise so at some point you just have to act.

3) Trying to please everyone: As humans and as leaders, we sometimes have the tendency to "make nice." We make deals and compromise with everyone, leaving those with bad intentions the ability to take advantage of the situation.

4) Failure to communicate: There is no such thing as an information vacuum; if the leader is not speaking, someone else is and it's usually the most outspoken, irrational person from the other side.

5) Compromising one's integrity: As stress increases, there is a temptation to take shortcuts. Leaders must resist. The crisis now referred to as "foreclosure-gate" is a prime example of shortcuts being taken in the name of efficiency. Presumably, in the desire to bring an end to the real estate crisis, bank officials signed foreclosure documents without ever reading or analyzing them for their validity.

6) Practicing how not to fail rather than practicing how to win: Just like in sports, you have to play to win instead of playing not to lose. In a crisis, leaders often try to conserve losses but the people who are resilient leaders go for the win. This theory is demonstrated by the recent stock market crash. Once they saw the significant drop, many investors pulled their money out and sat on the sidelines, thus missing a huge increase in valuation.

7) Failure to take care of oneself: In difficult times, the visible presence of the leader is essential to sustain the motivation and morale of those who follow. If the leader looks worn, exhausted and demoralized, like BP's then-chief executive Tony Hayward, those states will prove contagious. It is therefore essential for the leader to demonstrate the energy, motivation and optimism he/she hopes to find in subordinates.

Resilient leadership is the catalyst that inspires ordinary people to do extraordinary things. If American business and industry are to survive and prosper in the next decade, we must learn the essentials of resilient crisis leadership.

George S. Everly Jr. is executive director of the Resiliency Science Institutes at UMBC Training Centers and an associate professor of psychiatry and behavioral sciences at the Johns Hopkins University School of Medicine.

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