The CEO at the Helm in a Crisis?

Much has been said over the years about the role of the CEO in a crisis. From those staunchly advocating that the top man or woman must be in the front line of a crisis to save the day, to those defending a more selective visibility strategy, we feel it’s time to provide some clarity on what role the CEO should take in a crisis.

With their extensive experience in crisis management and communication as consultants and corporate executives, CS&A’s Caroline Sapriel and Mark Hooper discuss the role of the CEO in a crisis.

Mark Hooper: What is the role of the senior leader/CEO in a crisis?

Caroline Sapriel: The CEO is ultimately responsible for protecting his organisation’s reputation. Therefore he has a vested interest in ensuring that it is resilient and prepared to avoid a reputation train wreck. From anticipation, prevention, mitigation and recovery, the CEO has a key role to play in crisis management. He/she must set the tone and the commitment for this to be implemented effectively throughout his/her organisation. This does not mean that he/she should get involved in the nitty gritty planning details, but the mandate must come from the top.

MH: How involved do you think the CEO and company board should be in ensuring their organisation is crisis ready?

CS: As guardians of corporate reputation, CEOs and Boards are ultimately responsible to ensure that their organisations are resilient and crisis-ready. It is a critical part of their job.

MH: Should senior leaders/CEO be fully versed in dealing with a crisis, or should they simply assemble the team that handles the crisis?

CS: Senior leaders must be well versed in crisis management. Real crises are actually rare. Therefore, if they have not had the opportunity to acquire the necessary experience and competencies from real life events, then they must surely obtain them through regular crisis leadership training and simulation exercises. Crises are best managed by well-practiced and experienced teams. But, to be effective, crisis teams need crisis leaders. Without, it’s like an orchestra without a conductor or a sailboat in distress without a skipper at the helm. Crisis teams need their leaders and crisis leaders need their experienced teams.

MH: Should the CEO lead the team or specifically manage the crisis response?

CS: Senior/Leaders and CEOs must be part of the Crisis Management Team and as such be familiar with the organisation’s crisis processes, take part in regular training and exercises and preferably have experience from real-life crises. However, very much like a soccer team coach and team captain, there are clear delineations between the roles of the Crisis Leader and the Crisis Chairman. The former leads the crisis team while the latter keeps a close oversight to protect his organisation during crisis. In large organisations, the CEO must not be the Crisis Leader and avoid micro-managing the crisis. Rather, he/she should be present, visible and consulted on critical subjects, whilst remaining one step removed from the detailed decisions taken by the crisis team leader. This will help him/her retain a strategic overview of the situation to lead the organisation through the crisis optimally.

MH: Most CEOs are not necessarily crisis experts, but in a crisis, when the world is watching, people expect them to perform at the highest level. Is that realistic?

CS: Indeed, leadership in normal times is different from leadership in crisis. There is less time to make decisions under pressure and the stakes are extremely high with multiple potential levels of impact such as, people’s lives, environmental damage, public and media scrutiny, business continuity and share price to name a few. Not all CEOs are adequately prepared for crises affecting their organisations, it is a real test for most, a make or break situation, in which trust and reputation are on the line. To be crisis-ready, leaders need more than years of business and functional expertise, they need a complete new set of skills: crisis leadership competencies.

MH: Does it take special skills to manage a crisis? Is business experience enough?

CS: CEOs and Senior Leaders cannot become crisis leaders by default. They have to acquire the skills. Situational awareness, sense making, scenario planning, stakeholder mapping and decision-making are examples of core crisis leadership competencies that can be acquired through bespoke training workshops and exercises. So business experience alone is not enough.

MH: Many crises turn into reputation train wrecks, what can CEOs and Boards do to prevent this from happening?

CS: There are crises and then there are reputation train wrecks. In the former, the organisation is thrown into a period of chaos that may last days, weeks or months. Stakes and costs are high but by quickly demonstrating ownership, integrity, genuine stakeholder concern and swift action, the chance of recovering and even enhancing the organisation’s reputation is strong. Think Johnson and Johnson’s Tylenol crisis and Pepsi’s tampering case.

In the latter on the other hand, slow response, lack of responsibility, blame and insensitivity to stakeholders’ perceptions will quickly propel the organisation into a reputation train wreck that may damage and possibly destroy it forever. Think BP, FIFA and Volkswagen.

Therefore, the starting point for all this is having the right corporate values and principles. The organisation should live and breathe these values on a day-to-day basis and work hard to protect and sustain them through good and bad times and before, during and after a crisis. An organisation that values and protects transparency, honesty, integrity during a crisis will be able to retain stakeholder trust and possibly emerge from the crisis stronger than before.

MH: What about the role of the CEO in crisis response? Should he/she be in the front line?

CS: The CEO must be visible and available during crises. His/her role in public and media crisis response is to demonstrate concern and care for those affected, engage with key stakeholders and show integrity. This does not imply that he/she must be in the front line at all times, taking every media interview and responding to all calls. Practically, this is not possible nor is it advisable. The CEO must be “rolled out” strategically for important media opportunities, whilst his/her team tackles the bulk of the media/social media response. This is particularly critical if the crisis lasts, as fatigue and stress will set in and can cause mistakes as we have seen on many occasions, with BP’s Tony Hayward the most obvious example. Therefore the CEO must be cautious to preserve his/her credibility to lead and communicate effectively during crises. Finally, the CEO must remember that during a crisis he/she may little control over the events, but he/she can certainly control the response to protect credibility.

MH: If the CEO is the ultimate guardian of corporate reputation, what can he/she do to protect it during tough times?

CS: In a few words, the same as what he/she must do during normal times – be available and accessible, uphold integrity, instil a culture of transparency and crisis resilience throughout his/her organisation – so that when the going gets tough the same values and behaviour can help steer his/her organisation through the crisis.

MH: Most crises today are more complex and involve a maze of stakeholders, what can CEO’s and corporate leaders do to be better prepared?

CS: Spending time to understand the complex maze of stakeholders that have an impact on their organisation is invaluable for CEOs and Senior Leaders. Mapping stakeholders’ positions, issues and their conflicting agendas, must be a pre-requisite skill for all leaders in today’s complex interdependent and globalised world. This is not a task to be delegated, but one in which the CEO must have a direct hand. Only then can the organisation map different scenarios and strategies to help diffuse issues and pro-actively engage stakeholders before smouldering situations get out of hand and escalate to crisis levels with little or no possible mitigation.

In today’s world, crisis management is very much like a life jacket, it may never get deployed, but it must be there in case of need. The key is to make sure the jacket works, that everyone knows how it works and that the organisation’s leader is ready and equipped to coordinate the actions and do everything necessary to protect the interests of those affected. That leader is the CEO. The CEO must be there to lead his/her organisation before, during and after the crisis.

 

Caroline Sapriel is Founder and Managing Partner of CS&A International, a leading expert firm in risk, crisis and business continuity globally. With over 25 years experience, Caroline has provided counsel in crisis management to multi-national clients across industry sectors internationally.

Mark Hooper is an Associate with CS&A International. Mark has over 25 years experience with The Boeing Company, during which he was involved in leading his communications team and advising his CEO through a number of crises.

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