Teaching Business Students to Lead through Organizational Crises

Contemporary business must be prepared to "weather the storm" of crisis events that have the potential to compromise their success and survival, as well as that of those who lead them.
Illustration of businessman holding up life-size dominoes to keep them from falling

On the fifteenth anniversary of the September 11 terrorist attacks, I contributed a BizEd article in which I called on business faculty members to embrace the challenge of preparing our graduates for the many obstacles they will face throughout their careers, including times when their organizations may experience a crisis situation or event.

I recounted my pilgrimage in teaching Business Policy, our business capstone course. Throughout my pilgrimage in teaching this course for more than 30 years, I have always focused on the development of a “strategic mindset” and strategic thinking skills that will contribute to our graduates’ professional success and that of the organizations they will manage and lead throughout their business careers.

While the world in which we live, work, and travel changed forever on September 11, 2001, and subsequently in the years leading up to the earlier article, the challenges of the contemporary business environment have continued to evolve and will undoubtedly result in even greater disruptions to businesses in the years to come—in type, number, frequency, and impact.

Some crises are the result of forces of nature such as weather events, in part due to dramatic climate changes, but an increasing number are the consequences of intentional or unintentional actions of individuals or groups. Intentional acts including active shooters, cyber attacks, and acts of terrorism involving biological, chemical, explosive, or incendiary agents have a potential impact on a growing number of businesses. While in the years since the September 11 attacks much has been done to address traditional “hard targets,” we now recognize that “soft targets,” including businesses, are also subject to various threats.

While our business graduates and their organizations will ideally have the good fortune of never having to deal with a major crisis situation that has gone public at the speed of lightning in today’s digital information age, that is likely wishful thinking. Therefore, as business school faculty, we owe it to our students to ensure that they graduate with the necessary knowledge, skills, and confidence to enact whatever role they may play during a crisis successfully. The preparedness of business leaders prior to a crisis has often made the difference between organizational success or failure, as well as either ending or advancing a promising career.

DEVELOPING MISSION-CRITICAL CRISIS MANAGEMENT SKILLS

The logical place for students to learn crisis management is in a capstone course on strategic management. Students might also acquire other essential crisis management skills in courses such as communication, decision making, problem solving, and information management. Faculty teaching these related topics can collaborate on courses designed to prepare business students to address crises.

There are three distinct phases of crisis management: preparing before a crisis, managing during a crisis, and recovering after a crisis. Successful crisis management begins as the organization charts its future course through proactive planning.

Given the potential catastrophic events that can quickly confront a contemporary organization, business leaders cannot afford to adopt a reactive approach to planning in general, and particularly to anticipating crisis events or situations that have the potential of challenging their survival and future success. The actions an organization takes prior to a crisis can prepare it to “weather the storm” and include the following:

  1. Understanding the potential crisis situations the organization may face
  2. Evaluating potential crisis situations based on likely frequency and severity
  3. Recognizing the potential business impact of different types of crises
  4. Developing an appropriate crisis management plan
  5. Training all involved personnel to be prepared to understand and enact their roles and responsibilities as delineated in the crisis management plan

Crisis management activities before the occurrence of a crisis are thus intended to prevent crises and minimize the organizational impact of those that unfortunately do occur. In my course, students are required to identify the essential elements that they would recommend an organization include in its crisis management plan.

Successfully navigating a crisis that has occurred requires decisive management and leadership from a team of dedicated personnel who have prepared properly in advance of an incident. Their roles and responsibilities must be delineated prior to the occurrence of a crisis event. An effective activity for students is to role play various crisis management tasks, such as developing a media release or delivering an update during a press conference.

Successful recovery following a crisis involves restoring things to normal and engaging in the necessary evaluation of how the crisis was handled, in the interest of learning valuable lessons to prevent or address such occurrences in the future. In the capstone course, students identify the lessons learned from particular situations and discuss how these insights can serve to inform the organization’s future crisis management approach.

RECENT COURSE ENHANCEMENTS

Over the past two years, I have further enhanced the course coverage regarding crisis management in light of increased media attention devoted to crises affecting businesses, including weather-related events, cyber security, workplace violence, and public relations disasters. In completing the various course projects, students fully consider potential crisis situations through environmental scanning and strategy formulation activities.

Environmental scanning activities include considering an organization’s vulnerability based on its geographic location, products and services, and mission, as well as its degree of exposure to potential crises and their resulting impact. Students are expected to consider crises that could have an impact on the overall organization and those that might impact only certain locations or facilities. In the case of an organization with nationwide locations and operations, a regional or local event would typically have a lesser impact than it would if an organization were located only in the affected area or region such as in the case of a weather-related event.

Students also consider mission-critical activities and task interdependencies of operations. In evaluating the potential impact of a crisis, students consider the ability of an organization to continue to operate, the length of any interruption, resulting increases in operating costs, and ultimately the organization’s ability to survive.

While the course has always required students to identify organizational stakeholders and their expectations, they are now additionally required to consider the expectations of employees, customers, owners, and other relevant stakeholders before, during, and after an event. Students must recommend a crisis communication plan that ensures that organizational stakeholders receive information that is accurate, comprehensive, credible, professional, and timely. Activities include assembling briefing information, preparing media releases, preparing information for dissemination to organizational stakeholders, and participating in press conferences or media interviews. The importance of these actions in the age of the internet and social media is emphasized during the course.

Continuing with the example of a weather-related event, students are expected to prepare and deliver written documents or presentations that address how to disseminate information that meets the expectations of various stakeholders: employees who need to know how the crisis impacts their employment situation and their ability to get back to work, customers who are interested in discerning an organization’s ability to continue to deliver desired products and services, and owners who want to know the financial implications and realities of the crisis.

Students consider crisis situations from the standpoint of their impact on an organization’s reputation and recommend strategies necessary to maintain an organization’s positive reputation. An example of an innovative strategy for a well-known financial service organization whose headquarters was located in a geographic area subject to frequent and significant flooding was affording employees the opportunity to work from home during such events through the provision of the necessary training and technology to do so.

The vulnerability of an organization’s reputation in times of crisis is emphasized, as is the role of proactive crisis management in maintaining an organization’s reputation and ensuring its future survival and success.

The reality of the world today suggests that we, as business faculty, consider what our business programs are currently doing or what we could be doing to prepare our graduates to enact their various roles and responsibilities in catastrophic times. Our graduates and the organizations they work for throughout their careers will be the beneficiaries of our conscientious consideration of this important question in a business world where the threat of crisis events is an ever-present, growing reality.

Robert Fleming, Professor of Management, Rohrer College of Business, Rowan UniversityRobert S. Fleming is a professor of management in the Rohrer College of Business at Rowan University, where he previously served as dean. He also has an affiliate appointment as a professor of crisis and emergency management.