Leading organizations through crises: opportunities and challenges
How can leaders deal with the challenges created by a crisis and at the same time exploit the crisis’s opportunities? These and other questions were discussed in the third MBA talk Leading organizations through crises: opportunities and challenges.
12-11-2020 | 9:55
Crises are a recurrent theme in the business world. Some of these crises affect only a single organization or industry; others—like the 2008/2009 Financial Crisis or the COVID-19 Pandemic—affect almost all organizations on the globe. For leaders, crises mark "make-or-break situations:" Some leaders successfully navigate their organization through the crisis and even use the crisis to further boost business, whereas others struggle with the crisis’s complexity and fail to secure the organization’s survival. Yet, what distinguishes a successful leader from someone who fails? And how can leaders deal with the challenges created by a crisis and at the same time exploit the crisis’s opportunities? These and other questions were discussed in the third MBA talk by Barbara Stam (Head of Financial Restructuring & Recovery at ABN AMRO) and Professor Fons Trompenaars (VU Amsterdam and Trompenaars Hampden-Turner). Some of the key take-aways from the discussion are:
- "Crises are becoming the ‘new normal’ for leaders." The speed with which crises occur is accelerating. In the last 20 years, three global crises—the dot-com crisis, the 2008/2009 Financial Crisis and the COVID-19 Pandemic—hit the business world on a global scale and many smaller pandemics (e.g., SARS) and epidemics (e.g., Ebola) have had severe consequences for organizations. Thus, it becomes more important for leaders to acquire knowledge and skills on how to deal with these and other crises.
- "Leaders need support to handle a crisis." Leaders need to involve stakeholders and get help from experts to navigate the organization through complexity and uncertainty. Most crises are just too big and complex to handle them without support.
- "Strong leaders build strong teams." Especially during a crisis, a diversity of knowledge and perspectives is important to deal with complexity and uncertainty. Strong leaders build diverse teams and encourage people to speak up and to hold a mirror up to the leader.
- "Servant leaders are well-prepared to handle crises."
- "Successful leaders think ‘both … and’ instead of ‘either … or’." Instead of thinking in dichotomies (e.g., bottom-up or top-down), successful leaders in a crisis reconcile dilemmas by trying to connect the opposites (e.g., how can I use top-down leadership to create bottom-up?).
- "Charisma may help leaders at the beginning of a crisis, but they ultimately need to get things done." Especially at the beginning of a crisis, a charismatic leader can ‘rally the troops’ behind a common purpose. However, the more the crisis progresses, the less important charisma becomes, as leaders are no longer evaluated based on their charisma, but on their results.
The discussion has shown the complexities surrounding leading organizations through crises. Leaders need to keep in mind that it’s not necessary to solve a crisis on their own; ideally, they set up and develop a team even before a crisis to be well prepared to handle a crisis together as a team.
This MBA Talk is part of Vrije Universiteit Amsterdam's School of Business and Economics webinar series. More information and registration
Dr. Jost Sieweke is an associate professor at the Department of Management & Organization at Vrije Universiteit Amsterdam. He is also the programme director of the new Executive MBA: Leading with Purpose at the School of Business and Economics.