Do you Know Leadership?
Crisis Leadership and the Learning Organization
Chapter 12 Part Three: Organizational Leadership
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Learning Outcomes
Explain why crisis leadership competency is an important consideration when hiring new leaders.
What are the benefits of having a crisis management plan in advance of a crisis?
Briefly describe the three stages of a crisis management plan.
Describe the role of top management during a crisis.
Describe the five-step process for crisis risk assessment.
Describe the importance of effective communication during a crisis.
Describe the key characteristics of a learning organization.
Distinguish between the traditional and the learning organization.
Describe the role of leadership in creating a learning organization culture.
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Crisis
A crisis is a low-probability, but high-impact event that threatens the viability of an organization and is characterized by ambiguity of cause, effect, and means of resolution, as well as by a belief that decisions must be made swiftly.
Comes in many forms:
Natural disasters,
Mass shootings,
Product failures,
Human error disasters, or
System failures.
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Crisis Leadership
In planning for a crisis, leaders focus on five integrated tasks:
Formulate a vision of crisis management,
Establish strategic goals and objectives for crisis management,
Coordinate the creation of a crisis management plan,
Establish a communication plan, and
Develop simulations and drills.
These five tasks are essential competencies of crisis leaders, the ability to:
Craft a vision,
Set objectives,
Formulate, execute and evaluate crisis plans,
Communicate, and
Manage people.
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Crisis Communication in the Age of Social Media
Social networks must be a part of an integrated communication strategy.
Technologies diminish an organization’s ability to control crisis communications.
A crisis is instantly visible, and viral.
Companies have only minutes to contain a crisis.
Stakeholders may have more information about the crisis than the company itself.
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Formulating a Crisis Plan
Better prepared organizations could reposition themselves and turn a crisis event into a strategic opportunity.
Readiness to respond is a function of:
The skills, abilities and experience of a crisis leader,
A trained and well prepared crisis team,
Organizational preparedness,
Adequate organizational resources, and
Top management support and commitment.
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The Benefits of a Crisis Plan
Reduces duration of crisis.
Enhances corporate image.
Allows for quick and effective responses.
Improves communication.
Enhances coordination and cooperation.
Can lead to the accumulation of ready resources.
Can lead to fewer costly mistakes.
Creates less panic.
Leads to a quicker resolution.
Limits financial loss.
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Three-Stage Crisis Management Plan
Exhibit 2.5
Exhibit 12.1
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Pre-Crisis Planning
Pre-crisis planning addresses:
Do we have a crisis response team/who is on it?
Want a mix of people from all parts of the organization.
What is our crisis plan of action?
Should evaluate the worst possible scenarios .
Do we have all the necessary resources in place?
Both financial and nonfinancial resources are needed.
Another aspect is deciding on the appropriate communications strategy.
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Discussion Question
What are the benefits of creating a comprehensive crisis response plan before a crisis happens?
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Leading during a Crisis
When crisis erupts, a rapid response is vital.
The crisis leader must step forward and lead.
Focusing on three key elements:
Goals – define the ‘What’
People – define the ‘Who’
Resources – define the ‘how’.
Effective leadership from the top is critical.
Basic lesson is prepare for crises, respond quickly, act with integrity, and disclose fully.
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Discussion Question
Describe why a senior leader’s physical presence is critical during a crisis.
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Adapting After a Crisis
After a crisis, a review should include:
Effectiveness in stakeholder communication,
Effectiveness in addressing the root cause,
Crisis team effectiveness,
Leadership effectiveness, and
Effectiveness in dealing with victims.
Information gathered in the post-crisis evaluation helps prevent future crises.
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Five-Step Risk Assessment Model
Exhibit 12.2
Ultimately, these five factors determine readiness:
Quality of crisis plan
Awareness/access to crisis management information
Readiness for a timely response
Effective communication plan in place
Effective crisis leadership
Exhibit 12.2
© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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Effective Crisis Communication
Leaders must be able to communicate quickly and effectively during crises.
Four questions often emerge:
What happened?
How did it happen?
What’s being done to address the crisis?
What has been done to ensure it never happens again?
Providing honest, accurate, and timely answers is effective crisis communication.
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Guidelines to Effective Crisis Communication
The first 24 hours of a crisis are crucial.
Organizations can use media and tools to inform the public.
A press release is a printed statement that describes how an organization is responding to a crisis and who is in charge.
A press kit is a package of information about a company, including names and pictures of its executives, a fact sheet, and key milestones in the company’s history.
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Effective Crisis Communication – Rules to Follow
Exhibit 12.3
Exhibit 12.3
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Discussion Questions
What advice would you give to a leader who wants to improve his or her organization’s communications function so that it is more effective during a crisis?
How important to an organization is internal (employee) communication during a crisis?
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The Learning Organization and Knowledge Management
Organizations are increasingly dependent on innovation to create value for customers.
In a knowledge-based economy, learning and creativity are key to competition.
Leaders must develop knowledge-integration capabilities.
Organizational learning is the pathway to knowledge-creation – a strategic resource.
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Learning Organization Characteristics
Learning organizations have the following:
They continuously adapt and improve,
Everyone engages in continuous learning,
The culture supports creativity and innovation,
Knowledge creation is imperative, and
Decision making is informed by facts/analysis.
A learning organization is skilled at creating, acquiring, and transferring knowledge, and at modifying behavior to reflect new knowledge and insights.
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What is Knowledge Management?
Organizational knowledge is the tacit and explicit know-how that individuals possess about products, services, systems, and processes.
Explicit or formal knowledge is often codified.
Tacit knowledge is the instinct and intuition an experienced practitioner possesses.
Also referred to as intellectual or human capital.
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Key Differences between the Traditional and the Learning Organization
Exhibit 12.4
Discontinuous change occurs when anticipated or expected changes bear no resemblance to the present or the past.
Exhibit 12.4
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The Learning Organization Culture and Firm Performance
Higher levels of learning/knowledge creation relate to higher firm performance.
Firm’s ability to create/share knowledge is positively related to product development.
Productivity and profits increase.
Team creativity and innovation increase.
Direct positive impact on employee, customer, and supplier satisfaction.
Increased organizational citizenship.
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Fostering a Learning Organizational Culture
Benchmarking is a process that allows an organization to adopt the best practices of others.
Exhibit 12.5
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Discussion Question
What message does it send when the organizational culture encourages employees to view mistakes/problems as opportunities for improvement rather than reasons to blame or punish those involved?
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Key Terms
benchmarking
crisis
discontinuous change
learning organization
organizational knowledge
press kit
press release
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