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What should the chairman do in a crisis

Faced with the crisis of the new crown epidemic, even the CEO becomes the chief crisis officer, so what role should the chairman who cannot be too deeply involved in the implementation of the strategy and cannot be too alienated?

Guarding the sense of identity and mission When a crisis comes, CEOs are under pressure to take immediate action and communicate quickly. Divestment, elimination of products, layoffs and cost cuts all help to quickly improve performance and relieve pressure. However, if these efforts fail to recognize the skills, potential, experience, and culture that are critical to the long-term recovery of the organization, then CEOs risk dismembering the core and soul of the organization. The chairman should emphasize the purpose, beliefs and culture of the organization at this time, and direct the energy and passion of the organization to the most fundamental goal, which is to stick to the reason for the organization’s existence.

Resolving anxiety The leadership team is usually caught off guard for the new crown epidemic crisis and its consequences. Such lack of preparation can lead to various negative emotions such as stress and discomfort. Through approachability, sympathy, and a team-oriented approach, the chairman can demonstrate his participation, understanding, care and empathy. They do this not only to provide psychological support, but also to avoid negative emotions, uncertainty, and fear from influencing decision-making.

Create a safe space The chairman of the board should become the CEO’s decision-making consultant during the crisis. Creating an open and open and safe space not only helps the chairman maintain a close relationship with the CEO, but also ensures that the two have timely exchanged feedback and reached a unity before presenting their strategic actions to all members of the board of directors.

Although the security space promotes consensus in the crisis and speeds up decision-making, it should not be imposed on the CEO. They may interpret this as the chairman’s desire to intervene in the entire crisis response. Therefore, the chairman should encourage the CEO to make independent decisions and actions.

Achim Schmitt Gilbert Probst Michael Tussman

The experienced chairman of the board knows very well that neither too deeply involved nor too alienated in the execution of the company’s strategy, their success depends on how to walk impartially on this “wire rope”. However, when faced with a crisis such as the new crown epidemic, even the chief executive officer (CEO) becomes a Chief Crisis Officer, the chairman may become increasingly uncertain about how to maintain this balance.

The crisis breeds uncertainty and leads to low morale within the organization. Usually in such organizations, leaders need limited information to make quick decisions. At this time, the responsibility of the board of directors to supervise executive crisis response measures becomes very critical. It concerns the interests of stakeholders. At the same time, the board of directors may also bear the risk of delays in response and bottlenecks. In addition, when the short-term survival of the organization is at stake, the chairman’s goal of maintaining sustainable growth strategy choices in the future may become difficult to achieve. If the chairman and CEO conflict in their views on crisis response measures, the friction will intensify. This situation in turn will cause both parties to focus on maintaining their own image and reputation when facing the media and key stakeholders. Therefore, they fall into the typical dilemma of “doing is wrong, and not doing it”.

In view of the above, the interaction between the chairman and the CEO for establishing decision-making rules, guidelines, related expectations, work agendas and communication strategies is the key factor that determines whether they can successfully lead the organization through the crisis. This factor The importance of is often underestimated. We carefully examined this relationship to find out how experienced chairmen interpret their role in the crisis, and why the company’s success and recovery depend on the complementary roles, strategic synergy, and “chemical reaction”.

Chairman and CEO in the new crown crisis
In the traditional sense, the responsibilities of board members are “control” and “advise.” The control function means that every member of the board of directors must ensure that the actions of the senior management are in the interests of stakeholders; the suggestion function is to provide strategic guidance and advice to the senior management team to help the company make decisions. Through these two functions, the chairman builds a bridge of communication between the board of directors and the senior management team.

There is no doubt that this relationship between the chairman and CEO is essential to the company’s success, especially in the face of the new crown epidemic crisis. Monika Ribar, chairman of the Swiss Federal Railways (Swiss Federal Railways), pays great attention to the main activities and actions related to the crisis, and regularly interacts with the company’s CEO. Ribal said that whenever the CEO has a need, she will definitely appear. She will ensure that all communication channels are open, so as to understand as much as possible the way the executive team responds to the crisis and provide them with help. Ribal realized that during the global epidemic, as the chairman of the board, she needed to take more responsibility for the company’s strategy. These regular exchanges enabled her to be fully engaged and keep abreast of the trends. Effective chairmen are well aware of the role they must play, and they will combine board members into an efficient team to serve the company and stakeholders.

The chairman of other organizations such as Boston Childrens Hospital, Maersk Group (AP Möller-Mörsk A/S), Nestlé and Siemens AG have all taken similar measures. , To ensure that you can get closer to and support the CEO. For example, the chairman of Boston Children’s Hospital Douglas Berthiaume and CEO Sandra L. Fenwick are sticking to the core concept of “until every child recovers”, and The mission and values ​​of clinical nursing work and community participation have been firmly agreed upon. The crisis has increasingly highlighted this basic agreement. For example, during the COVID-19 pandemic, Fenwick and Bertiom joined hands to participate in communication across multiple boundaries for the board, donors, and staff. Fenwick said: “We must keep people informed of the situation and policy changes in a timely manner, and at the same time answer extremely complicated personal and professional questions, so that everyone can maintain focus, health, commitment, tenacity and optimism. This is very important. ”

Jim Hagemann Snabe, Chairman of Maersk Group and Chairman of the Siemens Supervisory Board, also emphasized the importance of this relationship. In order to ensure the consistency of the company’s overall strategic direction, he worked closely with the CEOs. Shi Jiehan said that such cooperation is equivalent to “providing a catalyst for strengthening corporate goals and strategic intent.” As the chairman of the board, he must guide the company to “still adhere to the strategic direction in the face of short-term goals and actions.” Although in times of crisis, all chairman of the board can assume the traditional responsibilities of control and advice, we have found that the experienced ones will make great efforts to coordinate and cooperate with the leadership to protect the organization’s sense of identity and mission.

Guarding the sense of identity and mission. In terms of crisis response measures, the company’s main risk is to react passively and take short-sighted, programmatic actions instead of formulating an overall strategic recovery plan. When a crisis comes, CEOs are under pressure to take immediate action and quickly communicate and respond-even if the coverage and impact of the crisis are still unknown, they must act immediately. Measures such as divestment, product obsolescence, layoffs, and cost reduction all help to quickly improve performance and ease pressure. However, if these efforts fail to recognize the skills, potential, experience, and culture that are critical to the long-term recovery of the organization, then CEOs risk dismembering the core and soul of the organization.

This key point in crisis response is where the relationship between chairman and CEO plays an important role. Taking Boston Children’s Hospital as an example, CEO Fenwick and Chairman Bertiom’s emphasis on the concept of “until every child recovers” highlighted the organization’s mission, beliefs and culture during the crisis. Such an attitude of firm adherence to organizational beliefs is equivalent to playing the role of an overall “crisis vision”, providing guidance for senior management in formulating and implementing crisis response strategies. It not only helps to avoid confusion, but also unites the entire leadership alliance toward the same ideal goal, while motivating employees to ensure that they can obtain the support of all stakeholders during a crisis. Shi Jiehan believes that this kind of cooperation is more important in a crisis, “because the uncertainty during the crisis may challenge the priorities that are originally consistent with the corporate purpose and strategic intent.” By aligning crisis communication with the purpose of the organization, the chairman and CEO can help the organization direct energy and passion toward the most fundamental goal, which is to stick to the organization’s reason for existence.

In order to maintain this focus on the purpose of the company, the leadership team must be able to ignore pressure and uncertainty and stick to its responsibilities. Resilience during a crisis will not only help leaders keep a clear head, but also allow the company to maintain a vigorous development momentum. However, easier said than done. Overcoming negative emotions and anxiety, and creating a safe space, has become a key issue that the chairman needs to actively pay attention to during the crisis.

Resolving anxiety The leadership team is usually caught off guard for the consequences of crises and disasters such as the new crown epidemic. This lack of preparation can lead to various negative emotions such as stress and discomfort. The special circumstances of each crisis also make it difficult for executives to adopt similar action plans or past practices to deal with the current situation. The management team could have gradually injected confidence into the employees, and such negative emotions had the opposite effect. In response to the extremely emotional needs of stakeholders, this instability can lead to suspicion and distrust.

In all the first-class companies we have studied, the chairman will actively focus on how to solve the emotional and psychological impact of the CEO. At Nestlé, Chairman Paul Bulcke has always emphasized that everyone’s emotions have been tense during the crisis. As the chairman, he can no longer make mistakes to increase stress and discomfort. Through approachability, empathy, and a team-oriented approach, the chairman can show—especially show to the CEO—his participation, understanding, care, and empathy. They do this not only to provide psychological support, but also to avoid negative emotions, uncertainty, and fear from influencing decision-making.

Actively nurturing positive energy acts as a catalyst. It can help CEOs stay rational instead of emotionally. The chairman’s perception and reaction to the CEO’s negative emotions are the key to guiding decision-making to rational facts rather than emotional differences.

Creating a safe space Because they all rely on the positive results that can be achieved in the crisis, all chairman of the board of directors value the trust relationship reached with senior management and board members. This kind of trust has made the chairman become the CEO’s decision-making consultant during the crisis. Creating an open and open and safe space not only helps the chairman maintain a close relationship with the CEO, but also ensures that the two have timely exchanged feedback and reached a unity before presenting their strategic actions to all members of the board of directors.

Although the security space promotes consensus in the crisis and speeds up decision-making, it should not be imposed on the CEO. They may interpret this as the chairman’s desire to intervene in the entire crisis response. Therefore, the chairman should encourage the CEO to make independent decisions and actions. Although trust lays the foundation for the CEO to actively seek feedback and suggestions, it is a two-way street. Failure to trust will form a vicious circle of blame and suspicion, which will severely hit the organization’s hopes for recovery after the crisis. This is harmful to both the CEO and the chairman. Therefore, the relationship of trust between the two should be established on the basis of mutual support and common interests. As the chairman of Swiss Federal Railways, Riber said, this “we are on the same ship” mentality will bring the chairman closer to the CEO. In uncertain and turbulent times, the company needs a united leadership front, a safe space where the chairman and CEO can coordinate their personal interests and jointly fight the crisis.

The importance of chairman
The new crown epidemic is an unprecedented crisis, and it has caused the global economy to fall into chaos. For companies, now more than ever they need to ensure coordination and consistency, as well as mutual support from the board of directors, chairman and CEO. The board of directors and the chairman of the board need to maintain self-discipline, stick to their responsibilities, not interfere in specific operations, and focus on being a good CEO when they need to “learn from” partners. The experienced chairman will not intervene or interfere. They will help the CEO overcome challenges by constantly reminding the organization’s beliefs and mission.

In addition, the chairman can also use close contact, positive reinforcement and trust to ensure timely information flow and deepen the understanding of the challenges and responsibilities faced by the CEO. They remind the CEO not to forget the purpose of the company and show empathy, which will help the CEO not only give full play to his creativity and passion when selecting, assessing and implementing short-term crisis response measures, but also provide himself with psychological safety sense.

Finally, the chairman should continue to provide support to the organization as always-continue to fulfill his mission of challenging decision-making, defend the long-term interests of the organization, and be ready to play a leading role when needed. After all, for organizations, the arrival of a crisis does not mean that the chairman is either completely invisible or unconditionally support. Just as the CEO needs to grasp the moment, so does the chairman. The latter plays a particularly important role in the success and long-term survival of the organization. Or as Nestlé Chairman Burke said, in a crisis, the chairman is like “a motorcyclist, he needs to see the distance when he is bending, if he keeps staring at his eyes, your wheels If you can’t exit the corner smoothly, you will lose your balance.”

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