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What makes for effective crisis leadership?

Crises can break or make leaders. Leaders who survive and shine in crises are those who have the right skills, the right teams, and the right actions.

Dr Yuen Lam Bavik, Deakin University
Associate Professor Jeff Shao, Deakin University
Professor Alexander Newman, Deakin University
Professor Gary Schwarz, Queen Mary University of London

This article is presented in advance of the launch of the Deakin Leadership Futures Hub on October 19 at 5.30pm. Register here for the launch event, a free webinar, "Breaking the bamboo ceiling in Australia: Challenges and solutions". 

A great leader is like a stage director who is visionary about what the audience needs and deeply knowledgeable about the play and each of its performers.  

However, in times of crisis, leaders not only have to deal with new demands and urgent challenges, but also the need to make decisions with minimal information – challenges that can force a shift from the conventional understanding of what makes an effective leader. 

For example, in the COVID-19 pandemic, many leaders face rapidly-changing circumstances that require swift responses. These include public health restrictions, disruptions to business operations, remote working arrangements, and increased mental health issues in employees. 

So, how can leaders navigate uncertain times and lead effectively during crises? 

In our new paper published in The Leadership Quarterly, we reviewed the crisis leadership literature and identified three key aspects to effective leadership during crises: having the right skills, the right teams, and the right actions.  

The right skills

Our review revealed that empathy and charisma play key roles in influencing leadership effectiveness during crises. 

Empathetic leaders are able to sense others’ emotional distress and put themselves in others’ shoes, thereby being more likely to gain employees’ trust and support. 

One article included our review suggests that US states led by women governors had fewer deaths than those led by male governors during the COVID-19 pandemic.

This is partly because people tend to perceive women governors’ public briefings as more empathetic, viewing them as better in using emotional and adaptive responses to address the needs of others. 

However, regardless of gender, empathy is an important quality for leaders to have, and express, in times of crisis.

Charisma is another critical skill for effective crisis leadership.

According to research, a charismatic leader commonly refers to someone with powerful and captivating personal appeal or magnetism. 

Because charismatic leaders have the ability to instil hope and generate passion in followers in such uncertain times, these leaders are often perceived as being effective in leading people out of crises. 

For example, charisma is considered a key factor that helped Barack Obama win the historic 2008 US presidential election which occurred at the height of the economic crisis.  

Some people may think that empathy and charisma are innate qualities that people are born with. This is not true. The good news is that both empathy and charisma are skills that can be trained and learnt. 

For examples, leaders can learn to increase and express their empathy by proactively engaging in employees’ conversations to understand how they feel in crises, providing a non-judgemental listening ear, and acting on employee concerns. 

Charisma can also be improved by communicating key messages through stories, metaphors, analogies, rhetorical questions, and expressing conviction via collective identities. 

The right teams

No man is an island, especially in times of crisis.

Leaders often have to work collectively in teams to confront challenges in a crisis. 

Findings of our review demonstrate that firms led by a diverse top management team (TMT) are less likely to encounter crises, but when they do, they have a better chance of surviving.

Diversity in TMT can be evident in terms of a higher percentage of outsider directors, educational backgrounds, and members’ functional backgrounds. 

A diverse TMT or company board makes more balanced decisions and is better at resolving conflicting demands because of collective complex thinking skills, diverse perspectives, and the understanding of organisational problems, problem-solving approaches, and identification of alternatives. 

The right actions

Our review also reveals that effective crisis leadership requires key actions that include sense-giving, direction-giving, and self-giving. 

Crises can uproot people’s assumptions and lead to a breakdown of collective sensemaking, so leaders should act to help followers make sense of the crisis and its accompanying disruptions. 

The act of “sense-giving” involves implementing policies and strategic changes to disseminate vision to stakeholders. Sense-giving helps stakeholders better interpret the crisis, construe meanings from it, and develop consensus with leaders around how the crisis should be handled. 

During crises, people look to their leaders for directions and advice.

Even though leaders may lack complete and sufficient information, they should not withhold communication but instead, recognise the importance of admitting what one doesn’t know. Providing clear directions helps people meet their need for certainties during crises. 

Because resources can be scarce and risks of losses are high during crises, effective leaders should role model self-giving behaviours, such as making sacrifice, and encouraging others to follow suit. 

However, self-sacrifice does not happen naturally. Surrendering self-interest for the greater good requires greater conscious effort. 

Leaders who ask employees to prioritise collective welfare over personal interests, should be ready to also make sacrifices in order to influence others during crises. 

During the COVID-19 outbreak, some leaders have been particularly skilled in taking these key actions. 

An exemplar is New Zealand Prime Minister, Jacinda Ardern, who has demonstrated effective crisis leadership by helping her people understand the COVID situation and its consequences to the country (sense-giving), providing clear guidelines on how people should do to combat COVID (direction-giving), and sacrificing a percentage of her salary (self-giving). 

To conclude, crises pose great challenges to leaders. However, these challenges are not insurmountable. Those leaders who develop the right skills, assemble the right teams, and take the right actions are more likely to lead their organisations and people out of crises.