Leadership in Turbulent Times

Zubin R. Mulla

School of Management & Labour Studies

April 30, 2020

1

“Leadership” is not the same as “management”.

➢ Leadership ≠ Exercising authority, Technical expertise

➢ Leadership = influencing others to work willingly for a joint purpose

➢ Leadership is a dynamic relationship with three components….

FollowerLeader

Context

Nye, J. (2008). The powers to lead. Oxford University Press.

• Depending on the context, anyone may exercise leadership

• The test of a leader is whether a group is more effective in both defining and achieving its goals because of that person’s participation.

2

Crises are low-probability, high-impact events that threaten the viability of the organization.

Normal Accidents Abnormal Accidents Natural Accidents

Personnel crises

Physical crises

Economic crises

Criminal crises

Information crises

Reputational crises

Natural Disasters

• Strikes• Exodus of

key employees

• Workplace Vandalism

• Industrial accidents

• Supply breakdowns

• Product failures

• Recessions• Stock

market crashes

• Hostile takeovers

• Product tampering

• Kidnapping or hostage situations

• Acts of terrorism

• Theft of proprietary information

• Tampering with company records

• Cyberattacks

• Rumour mongering or slander

• Logo tampering

• Earthquake• Floods• Fires• Pandemic

Pearson, C. M., & Clair, J. A. (1998). Reframing crisis management. Academy of Management Review, 23(1), 59-76.

Mitroff, I. I., & Alpaslan, M. C. (2003). Preparing for evil. Harvard Business Review, 81(4), 109-115.

Crises are characterized by ambiguity in…• Causes• Effects• Means of resolutionAnd a belief that decisions must be made swiftly.

3

Existing response strategies & routines do not work in a true crisis situation.

Routine Emergency True Crisis

Kind of work Technical Adaptive

Problem Definition Clear Requires learning

Solution &

Implementation

Clear Requires learning

Responsibility Managers > Team Managers & Team

Heifetz, R. (1998). Leadership without easy answers: Harvard University Press, p. 76

Leonard, H. B., & Howitt, A. M. (2012). Leading in Crisis: Observations on the Political and Decision-Making Dimensions Response. W: I. Helsloot,

B. Jacobs, A. Boin (red.) Mega-Crises. Understanding the Prospects, Nature, Characteristics and the Effects of the Cataclysmic Events, 25-34.

Can be addressed through authority or expertise

Can only be addressed through leadership

4

The manager’s role in a true crisis if far more complex.

Routine Emergency

(Can address by Authority or Expertise)

True Crisis

(Requires Leadership)

Define problems & provide solutions Identify the adaptive challenge & frame

key questions & issues

Shield the organization from external

threats

Let the organization feel external

pressures within a range it can

understand

Clarify roles & responsibilities Challenge current roles & resist pressure

to define new roles quickly

Restore order Expose conflict or let it emerge

Maintain norms Challenge unproductive norms

Heifetz, R. A., & Laurie, D. L. (1997). The work of leadership. Harvard Business Review, 75, 124-134.

5

A common mistake by managers is to treat a “true crisis” like a “routine emergency”.

This may address the crisis, but may seriously harm the

organization in the long term.

Heifetz, R. (1998). Leadership without easy answers: Harvard University Press,

➢ Individuals crave for a

charismatic leader during a crisis.

Fulfils the team members’

need to give up responsibility

& remain passive

➢ Managers may also display

“heroism” rather than

“leadership”

Fulfils the manager’s need for

attention & control

6

At times, too much of managerial control in crisis may reduce performance.

➢ Manager’s charisma may adversely affect performance during a crisis,

when followers have…

High self-direction values

High professional identity

➢ CEO power is negatively related to firm performance in crisis, when…

Firm innovativeness is high

Markets are competitive

Executives’ discretion is high (N = 3724 CEOs over 17 years)

Wegge, J., Jungbauer, K. L., & Shemla, M. (2019). When inspiration does not fit the bill: Charismatic leadership reduces performance in a

team crisis for followers high in self-direction. Journal of Management & Organization, 1-18.

Kamble, R. A., & Mulla, Z. (2019). Professional identity neutralizes charismatic leadership tactics in a crisis. Journal of Indian Business

Research.

Gupta, V. K., Han, S., Nanda, V., & Silveri, S. (2018). When crisis knocks, call a powerful CEO (or not): Investigating the contingent link

between CEO power and firm performance during industry turmoil. Group & Organization Management, 43(6), 971-998.

7

Those who “take charge” in a crisis may refuse to let go even after the crisis is over.

➢ “Taking charge” (or being in control) may distort managers’ perception

of reality, such that they are more likely to…

• Perceive incivility in others

• Act impulsively

• Taking undue risks

• Treat human beings like objects

➢ In the manager’s mind, the crisis never ends

O’Toole, J. (1996). Leading Change: The argument for values-based leadership, Ballantine.

Foulk, T. A., Lanaj, K., Tu, M.-H., Erez, A., & Archambeau, L. (2018). Heavy Is the Head that Wears the Crown: An Actor-centric Approach

to Daily Psychological Power, Abusive Leader Behavior, and Perceived Incivility. Academy of Management Journal, 61(2), 661-684.

8

Charismatic Bond

Reciprocal & mutually reinforcing forces make emergence of charisma more likely during a crisis.

Jungbauer, K.-L. (2016). Leading in Times of Crisis: Examining the Effectiveness of Different Leadership Styles across Stages of the

Crisis Lifecycle. Technische Universität Dresden,

Crisis

Leader Followers

Increased Charismatic Opportunity

Increased Follower Readiness

Influence

Evaluation

9

The paradox of short-term wants vs. long-term needs can be addressed by temporal splitting.

Phase Emergency Phase Adaptive Phase

Manager’s task Stabilize the situation & buy

time

Tackle the underlying cause of the

crisis & build the capacity to thrive

in the new reality

Manager’s

relationship

with team

members

• Charismatic

• Heroism

• Self-sacrificing

Leadership i.e., mobilizing people to

tackle the tough challenges that

they face & thrive

Heifetz, R., Grashow, A., & Linsky, M. (2009). Leadership in a (permanent) crisis. Harvard Business Review, 87(7/8), 62-69.

Organization culture & governance systems must prevent a state of “permanent

emergency.”

10

Leaders must first address these four questions.

Edmondson, A. (2020). Crisis Management for Leaders. https://www.alumni.hbs.edu/Documents/events/HBS_Crisis_Management_for_Leaders_Program5_Chilean_Mine_Rescue_Teaming_in_Crisis_Apr2020.pdf

1) Who are ”we”? (Am I part of this “we”) [Identity]

2) What things that we that we care about are at risk?

[Values / Purpose]

3) What happened / is happening? [Situational awareness]

4) What do people like us, with values like ours, do in a situation like this?

[Action]

If people don’t hear this from their leaders, they will find their own answers to

these questions.

See: New Zealand's PM Jacinda Arden's speech on Friday, March 15, 2019 during the

Mass Shootings at two mosques in Christchurch during Friday Prayers

https://www.youtube.com/watch?v=REkcKkctdJY

11

The leader’s communication must balance realism & optimism.

➢ Be honest about the most brutal facts of the current situation

➢ Maintain unwavering faith that you can and will prevail in the end,

regardless of the difficulties

➢ Show empathy

➢ As crisis is addressed, transition to more long-term visionary messages

Collins. J. (2001). Good to Great: Why some companies make the leap and others don’t. Random House, p. 13.

König, A., Graf-Vlachy, L., Bundy, J., & Little, L. M. (2020). A Blessing and a Curse: How CEOs’ Trait Empathy Affects Their

Management of Organizational Crises. Academy of Management Review, 45(1), 130-153.

Hunt, J. G., Boal, K. B., & Dodge, G. E. (1999). The effects of visionary and crisis-responsive charisma on followers: An experimental

examination of two kinds of charismatic leadership. The Leadership Quarterly, 10(3), 423-448.

(Stockdale Paradox)

12

Guidelines for navigating adaptive challenges…

1. Restrain your desire for control & need for importance / Don’t become the “answer-giver-in-chief”

2. Recognize that all crises have moral implications

3. Affirm the core values & be a role model for desired values/behavior

4. Consult experts from diverse areas

5. Have multiple teams working in parallel

6. Guard against cognitive biases

7. When sacrifices are needed & where possible, ask people to volunteer

8. Create psychological safety & encourage dissent (Prof. Amy Edmondson)

9. Remember that attacks are reactions to your professional role, not to you personally

10. Anchor yourself, have a few confidants

Heifetz, R. A., & Linsky, M. (2002). A survival guide for leaders. Harvard Business Review, 80(6), 65-74.

Leonard, H. B., & Howitt, A. M. (2012). Leading in Crisis: Observations on the Political and Decision-Making Dimensions Response. W: I. Helsloot,

B. Jacobs, A. Boin (red.) Mega-Crises. Understanding the Prospects, Nature, Characteristics and the Effects of the Cataclysmic Events, 25-34.

“Leadership in troubled times is defined by the values it preserves, not by the ability

to get all the operational decisions right”

13

Why Have Women Leaders Excelled At Fighting The Coronavirus Crisis?

“Mounting a successful defense against a crisis of this magnitude takes

more than a single person. Effectively developing a strategic response

depends on a leader who is both willing to listen to public health experts

and scientists and also willing take decisive action as needed. The

approach is obvious in theory but so hard to do in practice. And these

leaders have this unique cross-section of skills in common.”

Denning, S. (April 25, 2020). Why have women leaders excelled at fighting the Coronavirus crisis? Forbes. Accessed from

https://www.forbes.com/sites/stephaniedenning/2020/04/26/why-have-women-leaders-excelled-at-fighting-the-coronavirus-crisis/#5f7b7545543e

14

Leaders engage in collaborative “sensemaking” with team members.

Weick, K. E., & Sutcliffe, K. M. (2015). Managing the unexpected: Sustained performance in a complex world (Third Edition): John

Wiley & Sons, Jossey-Bass, p. 3 & 39.

Perception ofReality

Concepts & Theories

Sensemaking

1) Situation : “Here’s what I think we face”

2) Task : “Here’s what I think we should do”

3) Intent : Here’s why I think this is what we should do”

4) Concerns : “Here’s what we should keep our eye on because if that changes, we’re in a whole new ball game”

5) Calibrate : Tell me if you…(a) don’t understand(b) can’t do it, or(c) see something I don’t

15

Resources for further reading…

Thank You!

Prof. Venkat R. Krishnan Prof. Noel Machado Prof. Virajanand Varma