Erika Hayes James
  • Search results for crisis leadership
  • Mary Barra and the GM Recall Crisis, Part II

    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.

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  • Mary Barra and the GM Crisis, Part I

    A few years ago a colleague and I conducted research that disturbingly revealed that the announcement of the appointment of a female CEO provokes significantly more negative investor reaction relative to the announcement of the appointment of a male CEO.  At the time, we argued that the status differences accorded to men and women, and the infrequency with which women are named to executive positions, made the appointments feel more risky to investors.  Risk translates into reduced confidence, and reduced confidence yields reduced investment, thereby negatively affecting the stock price upon news of the new executive appointment.

    Although in recent years, we have seen ostensible growth in women holding top leadership jobs (think Ursula Burns at Zerox, Ginny Rometty at IBM, and Indra Nooyi at Pepsi), the scrutiny of women in these positions tends to outpace that directed to their male counterparts.  Imagine, therefore, the pressure for recently appointed General Motors (GM) CEO Mary Barra.  The first female CEO to lead one of the big three U.S. auto manufacturers is now also facing a highly publicized crisis – something else that tends to draw scrutiny and invite reduced confidence in leadership and firm performance.

    GM is embattled in a significant recall for millions of cars with ignition and other defects dating back more than a decade.  The recall is both financially costly and damaging to the beleaguered automaker’s reputation.  For Barra, investors and other stakeholders are voyeurs peering into her crisis handling, prepared to comment (and criticize) at every turn.  Below the surface her gender may make this an even more intriguing case than your average corporate crisis.

    There are some things Barra can do to mitigate the threat associated with the recall, and potentially stave off some of the risk associated with the crisis.  Read More

  • What is a Crisis? Part II

    In Part I of this blog What is a crisis? I introduced the definition of crisis according to   The Institute for Crisis Management as any problem or disruption that triggers negative stakeholder reaction and that could impact the organization’s financial strength and ability to do what it does. This can apply to businesses, educational institutions, cities, governments, and even individuals.

    I told about the first of two crises in recent months in which I was personally involved,  the ousting and subsequent reinstatement of Theresa Sullivan, the President of my institution, the University of Virginia. And in this story, an account of  a personal crisis that shook not only a key element of my career, but my ability to recover and move forward.

    In October of 2010 I, along with my co-author Lynn Perry Wooten, published a book that included the phrase “leading under pressure” in the title. It was the culmination of our work on crisis leadership, on which we each built our academic careers. The book was necessary for progression in my academic career at the Darden Graduate School of Business at the University of Virginia, and a personal achievement. And it was launched to great acclaim and success!

    Several months later I was notified by the owner of the registered trademark for the phrase, “leading under pressure”––an expert in the field of strategies to avoid burnout, increase energy, and improve well being, along with work in leading through business crises––that this phrase was trademarked. We were under the impression that things like website URLs and book titles could not be trademarked, and we didn’t pay close enough attention to the breadth of her work to realize that this was a complete brand, so I wasn’t too concerned…at first.
    As a result of my oversight, we soon found ourselves in the middle of a dispute, with the owner enforcing her legal right to the trademarked phrase. This would involve us dismantling our book website, removing the book from circulation, and removing any reference to the phrase from my website. I didn’t want to put my family at financial risk by prolonging the dispute, and I wanted to be able to come to a swift resolution so that I, and we, could move on. I also wanted to respect her trademark and her work, and not contribute to any confusion.

    I must say, at first I was paralyzed. After years of teaching, writing, and consulting about learning from and finding opportunity in crisis, when I was faced with my own, I couldn’t do it. It took time. I had to dig deep. And I realized that in order to validate my work, I had to practice what I preached. Eventually, Lynn and I regrouped and began collaborating on our second edition book, with updated citations, a fresh, more universal and less academic writing style, and, of course, a new title. We expect to publish it in the coming months. We also learned from the experience about infringing on trademarks and will be more aware and more thorough in our research when choosing titles for future publications! In addition, I purchased The Institute for Crisis Management, where I could continue putting my research and theories into practice in providing crisis preparedness and consultation to companies and institutions.

    Did I experience tragedy? No. Was there a loss of lives or livelihood? Of course not. But in considering the definition of crisis—any problem or disruption that triggers negative stakeholder reaction and that could impact the organization’s (or person’s) financial strength and ability to do what it does—then my circumstances definitely fit this definition.  It became more apparent than ever that organizations and people alike should be prepared for unfortunate circumstances. Because even with careful planning, when the reality hits it can derail even the best prepared, much less unsuspecting institutions or individuals, as in my two examples.  And as we say on the ICM web site, “It doesn’t have to be shock and awe, it can still derail (you) or your company. Hopefully I’m a better leader and a stronger person because of my experiences; and although I wouldn’t wish it on anyone or any organization, I do believe in finding opportunities in and learning from crisis. I know I did.

  • A Sudden Departure

    I am a member of the Mount Zion First African Baptist Church in Charlottesville, and a faculty member of the Darden Business School at the University of Virginia.  Both affiliations are relevant to a set of unusual circumstances I experienced this weekend.  On Sunday I enthusiastically attended church service.  On this day my enthusiasm was in large part because our church was welcoming Theresa Sullivan, President of the University of Virginia.  As a UVA faculty member I was looking forward to hearing her speak to a constituency often peripheral to the academic community. President Sullivan was invited by our pastor to be a guest speaker with the purpose of ministering to the congregation in honor of the high school and college graduates from our church.  As I’ve seen her do on numerous occasions at the university, she delivered eloquent, humorous, thoughtful, personal, and deliberate remarks.  Her message centered on staying true to one’s convictions, and leading with a purpose.  Referencing bible verses from the book of Romans she spoke of not allowing one’s self to conform to the inevitable trials and tribulations life will present, but to be transformed by them. She used stories to illustrate her point that one does not need to hold a particular title or position to lead, but that true leaders lead with integrity and from the heart.  True leaders lead in accordance with their values and they are not side-tracked by people who question or doubt those values.

     

    In my professional life, I view things from a standpoint of crisis leadership and diversity, the nature of my work. But this day, I listened as a parent and member of the congregation. And I was moved by her comments.  This is precisely the message I would want my own children to hear when it is time for their graduations.   As a fellow university professor I felt affirmed by President Sullivan’s remarks because they are consistent with the message that I try to instill in the MBA students I teach.  I left the church service filled with pride for the African American graduates who were honored in our service, and proud of our President who chose to spend her Sunday morning at a predominately African American Church ministering to our young people.  I had not expected what was to come next.

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  • How to Fix the Economy

    The world continues to cough and sputter as it suffers from economic malaise. Among its symptoms: sluggish growth, sliding stock prices, entrenched unemployment, political upheaval, skeptical consumers and skyrocketing fuel costs. The Darden Report • Spring /Summer 2011 23 asked nine members of our faculty, one representing each of the  school’s academic areas, to share ideas for how the world might pull out of the slump. Here are my thoughts:

    As a professor of leadership, I, along with my colleagues, view the economy through a lens connected to understanding people and their motivations. We teach that leadership is about broadening one’s perspective rather than staying entrenched in a single point of view. Just as we recognize the importance of multiple functional areas in effectively running a business, our government leaders must recognize the value that all of their constituents bring to the effort of rebuilding our economy. Great ideas come in a variety of packages, from a variety of gift bearers (rich, poor, black, white, business leaders, senate leaders), espousing a variety of values (conservative, liberal, Christian, non-Christian). Each one must be opened and carefully considered rather than summarily dismissed because someone takes issue with the person or group bearing the potential gift. To fix the economy, we must put our egos aside and consider the possibility that someone else, someone different, just might have a good idea.