Crises are inevitable in modern environments, the substance that should matters most to leadership is; what type of crisis will occur, when, and how leadership will respond in managing the crises. The increasing competitive environment, increased human activities, and demands for better living continuously place individuals, organisations, groups, and governments in situations susceptible to crisis. In such situations, leadership (self and group) plays a critical role in shaping how crises are handled.
In April 2010, bp’s drive to increase its profitability and sustain competitive advantage in the oil market resulted in what is famously known as the Bp Deep-water Horizon oil spill. This crisis resulted from an explosion on bp’s oil drilling rig, in which 11 people died and 17 were injured. The oil spill caused a massive environmental damage in the Gulf of Mexico, affecting tourism and livelihood of the people of the gulf. The behavior of Chief Executive, Tony Hayward who demanded his 'life back' and chose to go on a holiday during the crisis period was perceived as bp being out of sync with the crisis situation at hand. The CEO’s inability to handle the crisis effectively cost him his position and did further damage to the ‘beyond petroleum’ brand reputation. This highlights the importance for organisational leadership in managing crises effectively.
Leadership is significant in the overall (organisational) direction and becomes more eminent where an organisation undergoes crisis situations. Thus far, a leader’s behavioral dispositions in crisis situations are critical cues on how the overall entity will respond to an unfolding crisis. The importance of leadership approach during crises illuminates the rationale that crises shape people’s perception of their leaders. Unfortunately, while modern (organisational) operating environment is far much prone to crises than any other time before, many leadership training do not prepare executives for crisis management.
This is even exacerbated with the fact that most leaders perceives crises as a catalyst for problems, (and not as an opportunity for learning and creating a new beginning), because crises disturb an (organisation’s) stability by creating potential for loss of business; loss of reputation; and endangering organisational present status. However, (organisations) cannot effectively deal with crises situations without effective leadership. This suggests that in responding to crisis, leadership assumes ‘the buck stops here’ attitude, and is responsible for the overall attitude the entire organisation attains in resolving challenges.
A very good example is that of George W. Bush. Returning from a reputation sinking recounting of Florida presidential ballots debacle in 2000, G.W was mostly perceived as a weak president and his approval rating was the lowest of any winning team. However, closely followed by the 9/11 attacks, G.W took an aggressive stand against terrorism, sounded more resolved and decisive, became eloquent, and sided with the people. His action not only engaged a world crusade against acts of terror, but also endeared him with the people. His approval rating immediately went up.
Crisis management strategies that an (organisation) may adopt may not only be prompted by organisational environment factors, but are also closely knitted with the efficiency of prevailing leadership.