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Dean's Corner: Leadership in Times of Crisis

April, 2013

By Alfons Sauquet
Dean, ESADE Business School

Leadership is a paradox in academic terms. On one hand, the abundance of contributions in the field is overwhelming. On the other, if we examine the numerous contributions produced, we could easily finish our assessment by way of the classical "further research is needed," which leaves scholars with unpopular mixed feelings.

Indeed, we have to come to terms with the fact that there is some intrinsic elusiveness to leadership. Jim March, in a brief and rich contribution, discards a frontal approach to the topic on the basis of that the fundamental issues of leadership echo issues of life, and thus, he states "they are characteristically illuminated more by great literature than by modern essays or research on leadership."1

There is a natural expectation that leaders have an opportunity to make a significant impact during a crisis more than at any other point in time. We often turn our attention to those in positions of greater responsibility, since they have the opportunity, power, and responsibility to make decisions that orient or change the course of affairs of organizations.

In times of crisis, there is one basic assumption that holds true: things cannot continue as usual. Even if they do, continuity—in a general context of uncertainty and change—constitutes a crucial decision that should be the expression of some strategic goal, as it will have consequences. Times of crisis in organizations are indications of the appropriateness for change. It can be a change in processes, in markets, products, or something else, but crises are the preface to different scenarios.

A crisis is often a combination of several factors that do not come with explanation. In the midst of a crisis, there is a degree of confusion, causing the connection between information, data and interpretation to become non-linear, with the usual logical connections put aside. Data are subject to more than one interpretation, and there are often competing, plausible interpretations that must be considered. Causality requires reconstruction, as events may be the result of different antecedents. To further complicate things, multiple actions may well result in the same outcome. In times of crisis, uncertainty, ambiguity, and over determination are the watchwords. And, if this is the context of leadership, there is one expectation that leaders cannot avoid satisfying: providing an explanation that links outcomes with actions, and the present with future.

Here, we have one of the appropriate features of leadership in times of crisis: the ability to produce a story—or more simply stated, to bring meaning into a situation of certain confusion. To some extent, that meaning is linked to a story that probably has some of the virtues of fiction. Simon Leys (2011) states that whereas historians are the novelists of the past, for they select, organize and interpret available materials and present them in a coherent and plausible manner, novelists are the historians of the present for they select from current events those that are relevant for the narrative. In this respect, leaders would resemble the novelists within an organization.

The ability of the leader (or story builder) is that of producing a coherent narrative that incorporates both logical elements, as well as complementary ones, that make the narrative effective. Logical elements connect causes with effects, and data with interpretations to arrive at conclusions. They are the territory of reason, for they are amenable to analysis and discrimination. Yet, no narrative fulfills its purpose unless there are at least two more elements. The first one is that of credibility. This is a precondition, for no story holds unless there is a credible source behind it or embodying it. An unreliable source will not persuade anyone. The second is the ability to excite, move, and awaken. And this element is crucial in times of crisis. The narrative of a leader cannot be a cold, impersonal presentation, but a moving one that promotes action of a special kind. In times of crisis, action has special features.

In times of crisis, action cannot be mere continuity. While continuity is based on past success, past success does not ensure the right approach for tackling the next steps. On the contrary, action has to convey innovation, a new approach that points to a different outcome. In a recent meeting of successful entrepreneurs, a young and successful leader spoke of a conversation in which an investor asked him about the size of the market and what share he was expecting. The entrepreneur stopped for a minute and then uttered, "Unfortunately, there is no such market yet." And here, when addressing innovative actions, we learn the importance of credibility and the ability to move people as crucial factors.

There is a concept in organization theory that illustrates the difficult task of attending to novelty whilst maintaining control of the current events. Exploration is an organizational task, but one that must be supported by bold leadership—and ambidextrous organizations explore opportunities while at the same time exploiting current assets. Jim March (2005) suggests that leaders consider heresy, or in the same vein William Faulkner wrote in Intruder in the Dust, that "whenever you have to do something unusual do not lose your time with men; seek the help of women and children," as men are too busy with facts. Imagination is thus a quality that has to be within the scope of leaders in times of crisis, not just as an individual asset, but as a state of alertness and openness.

Last, whatever the goal, the road to completion is paved with delays and setbacks. Despite the clarity of the final state, unpredicted events are likely to create doubt if not appropriately managed. These moments require commitment and persistence in the face of disappointment. Private doubts have to be confronted. Individual resilience is a worthy leadership trait, but it is not sufficient. These doubts are opportunities to continue framing the process.

Winston Churchill provides us with a striking example of how to frame a situation in a way that helps align people and asks for the needed endurance. After two exhausting years in which the resources of the country had been tested to its limits, news of a first victory came from the North of Africa. Churchill masterfully framed that positive event in a way that combined praise for the result, as well as showing how much was yet to be covered by way of declaring "this is not the end, nor the beginning of the end, it is the end of the beginning." In times of crisis, the most difficult phase is likely to be the next one.


1. March, J. G. (2005). On leadership (English ed.). Malden, MA: Blackwell Pub.
2. Leys, S. (2011). (1a. ed.). Barcelona: El Acantilado.


Alfons Sauquet
Dean
ESADE Business School