Why all MBA students should study crisis management
23 March 2021
Crisis management advisor Jonathan Hemus makes the case for equipping MBAs with the capabilities to navigate the unexpected.
As Warren Buffett said: “It takes twenty years to build a reputation and five minutes to lose it”.
It’s a lesson which business leaders from BP’s Tony Hayward to Boeing’s Denis Muilenberg have learned to their cost, while others such as Merlin’s Nick Varney, have emerged from crises with their personal and organisational reputation not only intact, but enhanced.
A crisis is the acid test of management, a pivotal moment for business leaders and their organisations. Fail to respond in the right way and the damage can be catastrophic.
My career as a crisis management consultant is driven by a desire to end the needless harm to business reputation and value and, most importantly, those people who are directly affected by a mishandled crisis. This requires senior managers to have the knowledge, capabilities and confidence to do and say the right things on the worst days of their career.
The Amygdala Response
Without education, training and coaching it is rare for business leaders to intuitively act in the most effective way when crisis strikes. More likely, the amygdala (the part of the brain associated with emotional processes) will light up, adrenaline will course through their bodies and the instinctive ‘fight, flight or freeze’ response will kick in. This is not a recipe for a well conceived, purposeful and ultimately successful crisis response.
It is no surprise that a crisis can cause such an emotional response. Crises are by their nature unexpected and challenging events, with a lack of time, incomplete information, intense stakeholder attention and high stakes conspiring to put managers under unprecedented pressure. After all, not only is the fate of the business on the line but also their own career. The amygdala protected primitive humans when under attack from, for example, a sabre tooth tiger. A modern day crisis triggers a similar reaction.
Crisis management education and training
The only antidote to this syndrome is education, preparation and training in crisis management so that managers set aside ‘business as usual’ ways of operating and adopt a set of skills and approaches proven to work effectively even under the pressure of a crisis.
This provides an opportunity for business schools to equip managers with the essential skills they need to navigate a challenging crisis. Managing information, situational awareness, dealing with uncertainty, prioritisation, communication, leadership, teamwork and decision making are all capabilities that are developed under pressure through crisis management education, training and exercising. Even better, all of these capabilities are also invaluable during business as usual.
Preparing for a risker world
Sadly, as the pandemic demonstrated, the world is becoming an increasingly risky place for businesses. With cyber attacks increasing by the day, higher expectations of corporate and leadership behaviour, terrorism remaining a threat, environmental activism on the rise and social media fuelling the escalation and spread of bad news, it is likely that senior managers will be required to manage crises more frequently in future.
Equipping MBA and other business students with the crisis management capabilities they need to thrive under pressure will enable them to protect not just their business and its reputation, but also the lives and livelihoods of those affected by it.
Jonathan Hemus is founder of crisis management consultancy Insignia and the author of Amazon number one best selling book, ‘Crisis Proof – How to Prepare For The Worst Day Of Your Business Life’. He works with leaders of businesses including Cathay Pacific, DP World, Lidl and Stagecoach to ensure they have the capability and confidence to do and say the right things under the intense pressure of a crisis.
He is a visiting lecturer at Catolica Lisbon School of Business and Economics, Henley Business School, Manchester Metropolitan University and the University of Central Florida. He is also chair of the Advisory Board at Aston University’s Crisis Centre where he lectures as a member of the faculty for its MSc in Crisis and Disaster Management.
Jonathan was named as one of the IoD’s directors of the year in its 2020 awards for his work in advising businesses on their COVID-19 response.