Crises are inevitable in leadership. Whether it’s an external threat like an economic downturn or an internal disaster like a product failure, how a leader responds to crises can determine not just the immediate outcome, but the long-term success and reputation of their organization. Aspiring leaders should understand that crisis moments are defining tests, and how you navigate them can set the tone for your entire leadership legacy.
So, what should leaders do when a crisis strikes? And equally important, what should they avoid? Let’s dive into some timeless principles, backed by real-world examples, that aspiring leaders can use to steer their organizations through turbulent times.
What Great Leaders Do in a Crisis
1. Communicate with Transparency and Regularity
Case Study: Jacinda Ardern and COVID-19
During the height of the COVID-19 pandemic, New Zealand’s Prime Minister Jacinda Ardern exemplified transparent leadership. In an uncertain global environment, Ardern made it a point to communicate frequently with citizens, not just through traditional press conferences but also via Facebook live sessions, where she spoke directly to the public. She explained government decisions clearly, provided updates, and maintained an approachable demeanor, which helped build trust. This transparency contributed to New Zealand’s early success in controlling the pandemic, earning her international recognition for strong leadership.
Takeaway for Aspiring Leaders:
Transparency is the cornerstone of effective crisis management. It builds trust and keeps people informed, preventing confusion and misinformation from taking hold. Even when the news is bad, it’s better to communicate openly. Silence or obfuscation will lead to fear, distrust, and disengagement from your team or stakeholders. Keep communication clear, honest, and frequent to keep everyone aligned and focused.
2. Make Decisive, Data-Driven Decisions
Case Study: Alan Mulally and Ford’s Financial Turnaround
In 2006, Alan Mulally took the reins of Ford, a company teetering on the edge of bankruptcy. By the time the 2008 financial crisis hit, Mulally had already made a series of decisive, bold moves: selling off unprofitable brands, streamlining product lines, and securing billions in loans to ensure Ford could survive without a government bailout. These decisions were grounded in data, strategic foresight, and a clear vision for Ford’s future. While competitors like General Motors sought federal bailouts, Ford emerged as a symbol of resilience.
Takeaway for Aspiring Leaders:
Crises require action. Delaying decisions out of fear of making a wrong move can be worse than acting decisively. However, these actions should not be impulsive—they must be rooted in data, analysis, and a clear understanding of both short-term needs and long-term goals. As a leader, don’t wait for a perfect answer. Collect relevant information, assess risks, and act quickly.
3. Lead with Empathy
Case Study: Mary Barra and GM’s Ignition Switch Crisis
In 2014, General Motors faced a massive recall crisis due to faulty ignition switches linked to numerous deaths. As CEO, Mary Barra faced intense public scrutiny, but she handled the situation with empathy and accountability. Barra personally met with the families of victims, taking responsibility on behalf of the company. Under her leadership, GM issued multiple apologies, launched internal investigations, and restructured to prevent future failures.
Her empathetic leadership helped GM not only survive the crisis but also begin the process of rebuilding trust with customers and regulators.
Takeaway for Aspiring Leaders:
Empathy is not a weakness—it’s a leadership strength. In times of crisis, your team and customers will look to you not just for solutions but for understanding and compassion. Acknowledge the personal and emotional toll of the situation. Leaders who show genuine empathy foster loyalty, trust, and morale, even when the organization is under pressure.
4. Adapt and Innovate
Case Study: Howard Schultz and Starbucks During the Recession
In 2008, Starbucks was struggling with overexpansion and the financial crisis was taking a toll on consumer spending. Howard Schultz, who had stepped down as CEO years earlier, returned to lead the company through this difficult period. Rather than sticking to business as usual, Schultz closed hundreds of underperforming stores, retrained baristas, and refocused the company on its core mission: delivering a premium coffee experience. He also embraced digital innovation, introducing mobile payments and expanding loyalty programs, positioning Starbucks for long-term success.
Takeaway for Aspiring Leaders:
Crisis is often the catalyst for innovation. It’s easy to fall into the trap of defending the status quo in an attempt to ride out the storm, but great leaders recognize that crises are opportunities to reimagine how things can be done. Embrace change, adapt your strategies, and lead your team in finding creative solutions to emerging challenges. This ability to innovate will not only help you survive the crisis but thrive beyond it.
What Great Leaders Avoid in a Crisis
1. Withholding Information or Being Dishonest
Case Study: Boeing and the 737 MAX Disaster
Boeing faced one of its biggest crises when two of its 737 MAX planes crashed due to a malfunctioning software system. Instead of immediately acknowledging the problem, Boeing downplayed its severity, withheld critical information from airlines and regulators, and delayed necessary actions. The lack of transparency and accountability led to widespread public distrust, significant financial losses, and a tarnished reputation that will take years to rebuild.
Lesson for Aspiring Leaders:
Secrecy can destroy trust faster than any external crisis. In the face of failure or disaster, it’s tempting to withhold negative information, but transparency is critical. When leaders try to hide the truth, it almost always comes back to haunt them. Own the situation, provide facts, and take responsibility from the start.
2. Shifting Blame
Case Study: BP’s Deepwater Horizon Oil Spill
After the 2010 Deepwater Horizon oil spill, BP’s then-CEO Tony Hayward became infamous for his lack of accountability. Hayward attempted to shift blame to contractors and downplayed the severity of the disaster, famously stating, “I’d like my life back,” during a media interview. This insensitivity and refusal to take responsibility led to public outrage, massive protests, and his eventual resignation.
Lesson for Aspiring Leaders:
Leaders must own their organization’s mistakes. Blaming others, even if they are partly responsible, reflects poorly on leadership. Teams and the public respect leaders who are accountable, especially during a crisis. Shifting blame is a surefire way to lose credibility.
3. Neglecting Employee Well-being
Case Study: Travis Kalanick and Uber’s Leadership Crisis
During Travis Kalanick’s time as CEO, Uber faced several crises, including allegations of workplace harassment, toxic culture, and unethical practices. Kalanick’s focus on rapid growth at all costs meant that the well-being of employees and the company’s internal culture were often ignored. These issues eventually led to a leadership crisis that forced Kalanick to step down.
Lesson for Aspiring Leaders:
No amount of business success can justify neglecting your employees. In times of crisis, leaders should pay extra attention to their team’s well-being. A demoralized, overworked team will eventually falter, no matter how innovative or aggressive the company’s growth strategy is. Care for your people—engage them, listen to their concerns, and provide support when they need it most.
4. Overreacting or Panicking
Case Study: Kodak and the Digital Photography Transition
Kodak, once the undisputed leader in film photography, faced a crisis with the advent of digital cameras. Instead of adapting early on, the company failed to recognize the shift, then overreacted with hasty decisions that didn’t align with their core business strategy. As competitors innovated, Kodak fell behind, eventually filing for bankruptcy.
Lesson for Aspiring Leaders:
In a crisis, leaders must remain calm and avoid making knee-jerk decisions. Panicked reactions often lead to disorganized and unsustainable solutions. Instead, leaders need to maintain composure, assess the situation thoroughly, and implement strategic actions that align with the long-term vision of the company.
Conclusion: Crisis Leadership as a Defining Moment
Crises test leaders in ways ordinary circumstances never do. They reveal a leader’s true character, decision-making ability, and capacity for empathy. Aspiring leaders must remember that while crises are challenging, they are also opportunities for growth, innovation, and transformation.
By embracing transparency, acting decisively, showing empathy, and staying adaptive, leaders can guide their organizations through turbulence. On the other hand, withholding information, shifting blame, ignoring employees, or panicking can lead to disaster. Whether it’s the calm leadership of Jacinda Ardern or the innovative adaptation of Howard Schultz, the lessons from great leaders show us that crises, when handled well, can elevate an organization to new heights.
For those aspiring to lead, remember: a crisis doesn’t define you, but how you respond to it will.
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