In Part I of this blog series, we talked about the importance of early verbal responses to a crisis as an acknowledgement. When the leader recognizes the situation and even apologizes for the negative impact on stakeholders, stakeholders perceive it as a firm’s willingness to take corrective action and is correlated with a leader and his or her organization taking on a learning orientation.
Framing the issue as a threat vs. opportunity
How a crisis is framed by leaders also matters to the subsequent handling of the crisis. Crises are negative events that evoke an emotional response. According to psychological research, events that are perceived negatively are interpreted as threats, and in turn spark negative emotions (e.g., anger, anxiety, and despair) and negative behavior (defensiveness, deception, paralysis). Under these circumstances it is difficult for leaders to recognize the potential opportunities for positive change that can manifest from crisis. In fact, there is evidence to suggest that in response to situations interpreted as threats, leaders become more restricted in how they process information and less generative and creative in identifying solutions.
Fortunately, crises can be interpreted as opportunities when and if leaders adopt an orientation toward learning, and when those leaders are supported by an organizational culture that supports learning. Under these conditions a leader is more likely to take action to understand the root of the problem contributing to the crisis, therefore setting themselves and their organizations up for one of two kinds of opportunities to be realized: 1) the opportunity to decrease the likelihood or impact of future negative events or, 2) the opportunity to increase the likelihood or impact of future positive events.
In the third and final part of this blog series, we’ll dive into how Barra’s crisis handling stacks up to the best practices regarding initial messaging and crisis framing.