Sep' 19
The Effective Executive
Focus
General Electric, a business conglomerate that once was a ready-reckoner for anyone
to draw lessons of best practices on leadership, management, innovation,
performance, learning, succession, growth and many more, has suddenly found itself in the doldrums. Deeply stuck in the quagmire of accounting issues, heavy debt, weak demand and top-leadership instability, General Electric is in a kind of adversity, which nobody could imagine.
The cascade effect on the investors, consumers, collaborators, markets and revenues is inevitable. The business behemoth is facing a turnaround that would shed a lot of blood in the form of closures, layoffs, and sell-offs. A shrink in business portfolio is imminent, investors are certain to get affected, a shrink in business size and market share is on the horizon. General Electric is in crisis.
Given the competition, volatility and uncertainties across the markets and geographies, crisis is no more a situation that strikes a business once in a blue moon. It is just around the corner, all set to strike a business, like an alligator waiting patiently, till its potential prey commits a mistake. Potential crisis is already and always there; what matters is whether a business offers enough reasons to invite it. In the context, one may recall a much celebrated book, Only Paranoid Will Survive, authored by Andrew Grove, the former boss at Intel, whose central message was to be vigilant, visionary, and opportunistic, always.
This issue of the journal focuses on leadership in crisis. The issue carries three handpicked papers where the authors share valuable insights on leadership in the event of crisis. The first paper, �Leadership in Crisis � Insights from India and Abroad� by Stephanie Jones and Parth Chauhan, elaborates on the concept of crisis�its potential sources, nature, intensity, impact, etc. The paper picks numerous illustrations from diverse fields like business, politics, administration, etc. to drive home some critical insights on managing crisis.
The second paper, �Leader Sensemaking in Times of Crises� by Kurt April and Gerald Chimenya, is a sumptuous one that explores and shares the experiences of leaders in a scenario characterized by Volatility, Uncertainty, Complexity and Ambiguity (VUCA). The paper revolves around the question: What are the sensemaking constructs employed by leaders in a VUCA world?
The last paper, �Board Leadership, Crisis Governance and Governance in Crisis� by Colin Coulson-Thomas, offers insights from the perspective of a board. The paper captures various skills and capabilities expected of a leader in crisis situations. The paper focuses on the leadership behavior amid change, uncertainty and time pressure and on the board�s composition and the members� responsibilities during crisis.
Consulting Editor
Leadership in Crisis � Insights from India and Abroad
A crisis facing a leader is a true test of leadership. It can occur anytime and anywhere, and for any reason, in government or business. Crises can be especially due to two main factors�technological advancement and globalization, such as the �dotcom bubble� of the early 2000s. If we investigate the failures of some big names of the past like Kodak, Nokia, Blackberry, Enron, Satyam Computers and Jet Airways, we see problems in leadership as amongst the major causes of failure. What are the symptoms causing a crisis in today�s corporate entities? These can include a drop in sales numbers, a change in government regulatory policies, a ban on specific raw materials, a product recall, and the adoption of disruptive technologies by the competitors; these are some of the common types of crisis that have happened in the past and continue to happen in the present, and are hard to predict.
Leader Sensemaking in Times of Crises
Leadership requires that leaders navigate through the world that is characterized by Volatility, Uncertainty, Complexity, and Ambiguity, that is, a VUCA world. The acronym VUCA is not a single word but four different concepts that require different approaches. The sensemaking perspective provides a way of survival in a VUCA world. O�Driscoll and Bleak (2013) have come up with seven sense-abilities that leaders need to cultivate in order to make sense of unfamiliar contexts in their environment. This study explored the lived experiences of leaders in a VUCA world. The main research question was: What are the sensemaking constructs employed by leaders in a VUCA world? The study took a qualitative approach and a phenomenological strategy to explore the lived experiences of a sample of 18 participants who were regarded by their companies as managers and leaders. The participants were purposively selected, and this was supplemented by snowballing introductions. The findings were that unfamiliar contexts trigger occasions of sensemaking and that leaders make sense of a VUCA world based on their attitude towards creativity and risk-taking; having strategies for decision making under multiple options; having strategies for decision making under uncertainty; using various leader resources that go beyond their organizations; cultivating relationships with their employees and stakeholders through exhibiting collective leadership; having a broadened self-awareness that goes beyond their organizations; and analyzing and understanding the complex and unfamiliar situations before coming up with solutions.
Board Leadership, Crisis Governance and Governance in Crisis
Many directors and boards face challenges, difficult situations, multiple threats and related opportunities. Some of them are shared, interrelated and multifaceted. They impact upon many areas of corporate operation, supply and value chains, a variety of stakeholders and wider communities. Unlike situations that might suddenly and unexpectedly arise, some of the threats have also been long predicted. They represent a challenge for board leadership, and they need to be addressed by a combination of activities by multiple parties over a longer time period than emergencies that may have been quickly tackled by crisis management teams in the past. They raise questions about the adequacy of crisis governance arrangements, how directors should prepare for crises and handle them, and whether there is also a crisis in corporate governance in terms of the ability of current approaches and practices to cope with crises in the contemporary business and market context and environmental sustainability and climate change challenges that require collective and collaborative responses.