The Prepared Leader (2022) is a guidebook for those seeking insights on how to manage and persevere through a crisis. One thing is certain: it won’t be long before another crisis hits. The Prepared Leader shows how you can be ready and successful in weathering the next storm.
Introduction: Learn how to manage and perhaps even grow stronger from the next crisis.
Table of Contents
- Introduction: Learn how to manage and perhaps even grow stronger from the next crisis.
- Humans aren’t great at preparing for future crises, which is why we need to hone specific skills.
- There are five phases to crisis management.
- The nine skills of crisis management.
- About the author
- Table of Contents
- Discussion Guide
They say that there are only two things in this world that are certain: death and taxes. But in the business world, you can add a third certainty: crisis. Sure, for some of us the worst of the COVID-19 crisis may be over, but you wouldn’t be wrong in thinking that some other crisis is just around the corner. It might be local. It might be global. Whatever the case, it’s a crisis that you can anticipate and prepare for if you have the right skills.
In this summary, you’ll learn the five stages and the nine most valuable skills for crisis management. And you’ll also hear a couple stories about leaders who not only navigated their way through a crisis successfully but also emerged from it stronger than ever before.
Humans aren’t great at preparing for future crises, which is why we need to hone specific skills.
The COVID-19 pandemic took us all by surprise, right? Well, maybe not everyone. There were journalists, scientists, and epidemiologists who’d been warning us for decades that a viral worldwide pandemic was likely to happen. But, in the end, most of us weren’t prepared. While it’s hard to add up the cost, in both human and economic terms, some economists have suggested that the pandemic could end up as a $12 trillion loss. In 2020 alone, labor income losses totaled $3.7 trillion.
It’s true that we could have done a better job of heeding the warning signs, but it’s also true that human beings are simply ill-suited to preparing for future crises.
In the simplest terms, human evolution has caused us to prioritize the dangers that are here and now over the possibility of future threats. Because of this, we have a bunch of cognitive biases that get in the way of preparedness.
One such bias is known as probability neglect, which means that even if we see a threat brewing halfway around the world, we tend to dismiss it or underestimate the impact it could have on us.
Another is the anchoring effect. This refers to the way we tend to latch on to a first impression, and how we refuse to budge from it even when all signs point to it being wrong. Likewise, the more time and money we invest in a possible solution, the more difficult it becomes for us to change course, even when it’s clear that the solution won’t work.
But there is a silver lining: once you’re aware of these biases, you can take steps to overcome them. It will take some active effort on your part, but there’s no reason you can’t become the kind of leader who not only recognizes and manages a crisis but comes out on top. That’s right, you can be the boss who replaces panic and neglect with preparedness and poise.
One of the best examples of this is Adam Silver, the commissioner of the National Basketball Association (NBA). On March 11, 2020 – the same day the World Health Organization made the pandemic official – Silver put the NBA season on suspension. This is something that had never happened in league history. But Silver had been paying strict attention to what had been brewing the past few months and took action based on what he saw were “the facts.”
Perhaps most importantly, Silver wasn’t acting as his own counsel on the matter. He went outside his immediate circle and reached out to scientists, physicians, and trainers in order to get the best possible picture of what the COVID-19 threat looked like. With those added perspectives on the crisis, he decided to cancel the season – a decision that would no doubt cost the NBA tons of money.
But that’s not the end of the story. Silver put together a diverse brain trust of health-care and sports experts to build the first “bubble.” At a cost of around $190 million, this was another expensive decision since it involved creating what was essentially a small city in Florida where all the players and team members could live in isolation. But with “the bubble” in place, the league was able to play 172 games, with zero cases of COVID. In the end, Silver’s decision not only kept people safe – and showed the world how a business could continue to operate during a raging pandemic – it allowed the NBA to come out on top and earn $1.5 billion in revenue.
What Silver did is a classic example of the agency of leadership during a crisis. As a leader, it’s essentially your responsibility to take action.
In the sections ahead, we’ll get into more detail on the skills you can develop in order to be the most prepared leader you can be.
There are five phases to crisis management.
These days there are three bottom lines that are generally recognized as being fundamentally important for every leader to consider. This is known as the triple bottom line paradigm. It consists of a responsibility to care for people, the planet, and then profits. Now, this is absolutely correct, but in order to properly take care of these responsibilities, we have to add a fourth bottom line: prepared leadership.
With this in mind, the authors have identified five phases of crisis management that are key to becoming a prepared leader. Now, keep in mind that we’ll also be looking at nine skills that you can hone to be successful every step of the way. But first, let’s go over the five phases.
The first is Early Warning and Signal Detection. Some crises can appear without warning, such as a natural disaster or a sudden act of violence. But more often than not, a crisis has warning signs that you can detect and do something about. The prepared leader must have their senses tuned to these kinds of early warning signs. And they must have the courage and conviction to do something about them before the crisis gets worse – even if that means taking some early losses.
The second phase of crisis management is Preparation and Prevention. You’ve spotted the warning sign, but now what? Do you have a crisis response team in place? Have you been running drills to ensure a swift and coordinated response? If this sounds like exactly what you’re doing, then you’re well on your way to managing the Preparation and Prevention phase.
Next up is phase three: Damage Containment. Generally speaking, this is the phase most people think about when dealing with a crisis. How do we keep a problem contained and prevent it from contaminating all aspects of the business?
When the COVID-19 crisis hit, a lot of businesses did what they could to try and minimize the damage. But some, like the UK pub chain JD Wetherspoon, failed at this stage. Group chairman Tim Martin announced that none of their 43,000 employees would be receiving a salary during the first lockdown period, and he encouraged people to apply for jobs at the supermarket chain Tesco. This crisis response wasn’t well received, to say the least. It simply heaped more damage upon the company and had people asking: If this is how they treat their employees, who’d want to work for JD Wetherspoon? This is a good example of exactly what not to do.
Now, phase four is all about one thing: Recovery. This is another phase that will benefit from having a well-staffed team in place. Time is of the essence here, so the recovery team should have open access to the right information, with short-term and long-term goals in place. We’ll talk more about this later, but at this stage, there should always be the question: Can we recover from the crisis in a way that makes us stronger and better than we were before?
This leads us to the last phase: Learning and Reflection. Many leaders take a purely defensive approach to crisis management. Often, it amounts to a series of reactions that might minimize the immediate damage, but do nothing to address the underlying factors that caused the crisis. So, by taking the time to examine, learn, and reflect, a prepared leader can emerge with a business that’s more efficient and more successful than ever.
As we mentioned earlier, in order to thrive in these phases, there are nine corresponding skills that every prepared leader should have. In the next section, we’ll dig into each one.
The nine skills of crisis management.
Let’s take a minute here to do a little visualization exercise. Imagine you’re a bird. But not just any bird. You’re a migratory bird known as the swift. What’s special about swifts is that twice a day they’ll take flight and soar up to the planetary boundary layer. At such a high altitude, the birds can analyze air currents, weather systems, and atmospheric conditions so that they can make the best possible plans.
In other words, swifts make it part of their routine to take a look at the big picture, make sense of the various signs around them, and plan accordingly.
That’s a pretty sensible system, and it’s one that every prepared leader should have in place. It’s also what the first phase of crisis management, Early Warning and Signal Detection, is all about. Now, to excel in this phase, there are two highly beneficial skills: Sense-Making and Perspective-Taking.
Going up and looking around for signs of an approaching crisis won’t be very helpful unless you know how to make sense of what you’re seeing. For this, you need a crisis response team that consists of multiple diverse perspectives – a team that will be sure to spot anything out of the ordinary and worthy of attention.
Mark Aslett is the head of Mercury Systems, an aerospace and defense electronics company. He was named by Glassdoor as one of the “25 Highest-Rated CEOs During the COVID-19 Crisis.” Part of the reason for that is that his crisis response team had been monitoring the virus for months by the time the US went into lockdown in March 2020. That team tracked events, monitored data, made sense of that information, and presented its findings to the entire company in a routine fashion.
With the team’s valuable insights in hand, Mercury Systems was able to make a number of decisions that helped the company weather the incoming crisis. It spotted supply chain problems early on and made valuable adjustments. It flattened its communications hierarchy by using live video channels that facilitated open dialogue across the company. This allowed for questions to be asked and answered at any time, which made it easier for people within the company to adapt to the flurry of changes. Very early on, Aslett also put a freeze on all layoffs and began implementing new programs to provide food delivery and assist with childcare services for all employees. The company also reset everyone’s sick leave balances and opened up a $1 million COVID-19 relief fund for staff and their families.
All of this was made possible because Aslett established a crisis response team with diverse perspectives that was able to make sense of the warning signs. The reward? Despite racking up $2.6 million in COVID-related costs, 2020 ended up being one of Mercury Systems’ best fiscal years ever.
Moving on to the next phase, Preparation and Prevention, there are three main skills to consider: Influence, Organizational Agility, and Creativity.
Influence means being the kind of leader that people trust and are inspired by. The kind of leader people will feel confident in following. So here are a few questions to ask yourself: Do you prioritize trust and transparency in your leadership practice? Do you delegate to people who have specialized knowledge? Do you communicate clearly and provide the reasoning behind your decisions? If you answered yes to all of these questions, then you should have the kind of influence that will help you manage a crisis.
Trust also plays a big part in the second skill of Organizational Agility. When a crisis hits, your focus as a leader will be on big-picture problems. You’ll need to be surrounded by teams that have a certain amount of autonomy so that you can delegate duties and be comfortable that plans will be carried out and critical decisions can be made without you. If communications are currently getting clogged up in webs of bureaucracy and hierarchy, you need to put a priority on fixing this so that your organization will be able to pivot smoothly when a crisis hits.
Creativity can’t be undervalued, either. Do you regularly promote creative thinking when it comes to solving problems? Could your teams stand to think more outside the box? When a crisis hits, it’s immensely valuable to have people in your organization who know the importance of – and are familiar with – creative problem-solving. So this is a skill that should remain a priority at all times.
During the Damage Containment phase, there are two skills to keep in mind: Effective Communication and Risk-Taking.
It should go without saying that clear and effective communication is crucially important during crisis management. Truth be told, this is a skill that is vital to every phase of crisis management. But it’s perhaps most important when you’re trying to keep people calm, inspired, and confident, even when things are at their most chaotic and uncertain. In this phase, it’s important to remain empathetic to what people need in order to do their jobs and to keep the lines of communication open. The last thing you want is for people to feel like they can’t ask questions or for their concerns to go ignored.
It should come as no surprise that Risk-Taking is also a valuable skill in a time of crisis. After all, a crisis is an inherently risky situation. It requires a leader with the willingness and confidence to make quick decisions. Hemming and hawing simply won’t do when you’re in the damage containment phase. So you have to be willing to take chances and make mistakes from time to time. It’s simply part of the job.
This leads us to the last two skills: Promoting Resilience and Individual & Systemic Learning.
When communities and businesses were beginning to emerge from the COVID-19 crisis, the word resilience was on everyone’s tongue. You can promote resilience by encouraging and empowering your teams to make decisions, experiment, learn from errors, and grow in terms of experience and confidence. There should always be the possibility in everyone’s mind that we can emerge from this crisis not only intact but maybe even stronger than we were before.
The final skill is Individual & Systemic Learning, and it’s perhaps the most important skill when it comes to prepared leadership. There’s no end to your own personal learning. It’s ongoing, and it will always be critical to being prepared, since the world around you never stops changing. That said, as a leader you should also do whatever you can to promote learning within your organization. The organization’s employees are also the eyes and ears of your business and need to be prepared in order to identify and manage the next crisis.
Let’s take a breath. We covered a lot in that last section. So let’s use this final section to reinforce a few of the key points and wrap things up by mentioning one or two pitfalls that you should keep an eye out for.
Two things that the authors really spend a lot of time on are diversity and trust. In terms of decision-making, it can not be stressed enough how important it is to get a variety of opinions and perspectives. Remember how we talked about those cognitive biases in the first section? Well, the best way to get around those biases is to reach out to different people and hear what they have to say.
Diversity also plays a big part in setting up a crisis management team. You need to create a well-rounded team, with diverse skill sets and no blind spots. You also want to establish clear goals centered around your company’s shared vision. And this is where trust comes in, once again. You need to establish an environment where people feel empowered, inspired, and comfortable speaking up. This is all part of company culture, which, as the leader, is something you have agency over.
Finally, let’s mention technology. Many businesses today are, to one degree or another, affected by technology and crises that can exist on either a local or global scale. This is important to keep in mind for several reasons. Technology can help to cultivate a global mindset that can effectively respond to a global crisis. It allows you to reach out to people around the world for expertise and to gain valuable cultural insights. Increasing the number of contacts you have around the world can result in what the authors refer to as a “mega community.” And this can be a tremendously beneficial thing to have when facing a global crisis.
As Mercury Systems showed, technology can also be a great way to streamline communications. But it also has its pitfalls. In June 2020, Greg Glassman, the founder and CEO of the billion-dollar CrossFit empire, facilitated his demise with a couple of horrible tweets and some racially insensitive comments made during Zoom conferences. The global backlash forced Glassman to step down as CEO in a matter of days.
It brings to mind the wise saying: “Technology is only as good as the leader who uses it.” More often than not, people will point to success stories and suggest that we can learn from them. But it’s also important, if not more so, to learn from the mistakes of others.
Entrepreneurship, Management, Leadership, Business, Self Help, Money, Business Decision Making and Problem Solving, Motivation
Erika H. James became the dean of the Wharton School on July 1, 2020. Trained as an organizational psychologist, James is an expert on crisis leadership, workplace diversity and management strategy. Prior to her appointment at Wharton, James was the John H. Harland Dean at Emory University’s Goizueta Business School from 2014 to 2020. An award-winning educator, accomplished consultant, and researcher, she is the first woman and first person of color to be appointed dean in Wharton’s 141-year history. As such she has paved the way for women in leadership both in education and corporate America.
James has been instrumental in developing course material in crisis leadership and women’s leadership and in leading programs for executive audiences in these areas. She earned her B.A from Pomona College and her PhD from the University of Michigan. James serves on the boards of Morgan Stanley, Momentive and the Philadelphia Orchestra. She is coauthor, with Lynn Perry Wooten, of The Prepared Leader: Emerge from Any Crisis More Resilient Than Before.
Lynn Perry Wooten, a seasoned academic and an expert on organizational development and transformation, is the ninth president of Simmons University and the first African American to lead the institution. Before coming to Simmons, she served as the David J. Nolan Dean and Professor of Management and Organizations at the Dyson School of Applied Economics and Management. Prior to that, she served on the faculty of the University of Michigan Ross School of Business for nearly 20 years.
Specializing in crisis leadership, diversity and inclusion, and positive leadership, Wooten is an innovative leader, presenter, and prolific author. Wooten holds a bachelor’s degree from North Carolina A&T State University, where she was valedictorian; an MBA from Duke University’s Fuqua School of Business; and a doctorate from the University of Michigan. A resident of Brookline, Massachusetts, Wooten is actively involved in the Boston philanthropic and civic community. She is the coauthor, with Erika H. James, of The Prepared Leader: Emerge from Any Crisis More Resilient Than Before.
For more research and insights from James and Wooten, visit jamesandwooten.com.
Table of Contents
Chapter 1 Prepared Leadership as Your Fourth Bottom Line 1
Chapter 2 The Five Phases of Crisis Management 17
Chapter 3 The Nine Skills of Crisis Management 27
Chapter 4 Making Decisions Under Pressure 43
Chapter 5 Building the Crisis Team 55
Chapter 6 Inheriting a Team in the Middle of Crisis 69
Chapter 7 Managing a Globalized Crisis 85
Chapter 8 Technology and Crises 99
Chapter 9 Learning and the Prepared Leader 111
Conclusion: What’s Next? 127
About the Authors 147
About Wharton School Press 151
About the Wharton School 152
The book is a self-help guide that aims to help leaders prepare for and manage any crisis, whether it is economic, environmental, medical, or organizational. The authors, who are both experienced and influential leaders in academia and business, argue that the time to prepare is always, and that leaders need to develop a set of skills and mindsets that enable them to emerge from any crisis more resilient than before. The book introduces the concept of the Prepared Leader, who is someone who can flip five internal switches: Perspective, Risk, Independence, Self-Awareness, and Motion. These switches represent the key attributes of successful and resilient leaders, such as optimism, courage, autonomy, self-knowledge, and action. The book explains how to activate each switch and provides examples of leaders who have done so in various fields and situations.
The book also contrasts the Prepared Leader with the Unprepared Leader, who is someone who lives in the Lemon Life, which is a passive and mediocre existence that results from settling for less, making excuses, and following the crowd. The book is filled with inspirational stories, practical advice, and actionable steps that can help leaders transform their mindset and behavior and lead the Lemonade Life, which is a state of mind that enables one to overcome challenges, seize opportunities, and create positive change.
I found the book to be engaging, insightful, and motivating. The authors write in a clear and conversational style that makes the book easy to read and understand. They use anecdotes, metaphors, and humor to illustrate their points and keep the reader’s interest. They also draw from their own personal and professional experience as well as from research and studies in psychology, neuroscience, business, and other fields. The book covers a wide range of topics that are relevant and applicable to any leader who wants to improve their performance and impact in times of crisis. The book is not only informative but also inspiring.
The authors share many examples of leaders who have overcome adversity, pursued their passion, and made a positive impact on the world. They also challenge the reader to reflect on their own situation and aspirations and provide exercises and questions that can help them discover their purpose, values, strengths, and opportunities. The book is not a quick fix or a magic formula but rather a guide that encourages the reader to take responsibility for their own happiness and success and to make conscious choices that align with their vision. The book is a valuable resource for any leader who wants to live a more meaningful and fulfilling life.
The next crisis might be here now or it might be right around the corner. In The Prepared Leader: Emerge from Any Crisis More Resilient Than Before, two history-making experts in crisis leadership—Erika H. James, dean of the Wharton School of the University of Pennsylvania, and Lynn Perry Wooten, president of Simmons University—forcefully argue that the time to prepare is always.
In their fast-reading and actionable book, James and Wooten provide tools and frameworks for addressing and learning from crises, as well as insight into what you need to know to become a Prepared Leader.
Questions for Discussion
- In the introduction to The Prepared Leader, James and Wooten talk about two critical ideas that have emerged from their crisis leadership research. One is that crises are inevitable. The other idea is that leaders can prepare for crises before they actually happen. What kinds of experiences have you had in the past managing crisis situations— at work or at home? How have you prepared for a crisis in the past?
- James and Wooten highlight a number of cognitive biases that can impair rational decision-making and make it all the harder for us to prepare for a crisis in advance and then take the right actions to mitigate its impact. Which of these cognitive biases present a challenge for you or your organization?
- In chapter 1, the authors introduce a critical idea: the fourth bottom line or fourth P of leadership. What are your thoughts about this assessment? How would it transform your leadership, organization, or business as a whole if a fourth P were adopted?
- Chapters 2 and 3 break down in detail how crises unfold: the five phases of a crisis and the specific skills you need to deploy to navigate each of these phases. Which phases and which skills do you feel most prepared for? Where do you see the need further development?
- Crises are both threats and opportunities, say the authors. Do you agree that crises present opportunities? Is there an example from your own life where a crisis presented an opportunity?
- The authors argue that in a crisis you not only need the input of others, but you need a diversity of inputs or perspectives. How diverse is your team and what practices or processes do you currently have to capture information and expertise from different areas of your business? How empowered are individuals at different levels of the organization to speak up if there’s an issue?
- Trust is absolutely vital in a crisis. Your team needs to trust in you and your leadership. Likewise, you need to be sure of the advice that you are receiving. Using the Trust Assessment Wheel, think about who you would go to in a crisis situation, and evaluate how each person scores in terms of transparency (communication), following through on a promise (contract), and their skillset (competence.)
- Crises are exceptional events with the potential to do major harm to business, communities, and individuals. They are also exceptional opportunities to learn. However, oftentimes leaders don’t leverage this learning effectively, and the authors cite four ways that leaders fail to learn in the book. What positive or negative examples of learning after a crisis have you experienced or observed?
- Throughout the book, the authors flesh out the key ideas with examples taken from the real world: Prepared Leaders who have navigated the pandemic era and emerged more resilient. Is there someone who you believe has been an exemplary Prepared Leader in the last few years? What characteristics or decisions distinguish them from others, and why?
- What are your next steps to become a Prepared Leader?
In Conversation with the Authors
Wharton School Press sat down with Wharton School Dean Erika H. James and Simmons University President Lynn Perry Wooten to talk about how they found the motivation and the staying power to write this book during the pandemic.
WHARTON SCHOOL PRESS: What led you to write The Prepared Leader in the midst of a pandemic while transitioning into highly demanding new roles?
JAMES: When we had the notion to author a new book, the pandemic was still not on anyone’s radar. And as it started to emerge, it so happened to coincide with the point in time when Lynn and I were both at the final stages of making the decision to join a new institution. We realized that, given our backgrounds, our expertise in crisis leadership and given that this pandemic had now come to the United States, we couldn’t not take advantage of this opportunity. And although, yes, we were starting new roles in the midst of the pandemic and the midst of a really major crisis, we realized that we had to speak to this, both from our own personal experiences as leaders, but also as experts and scholars in this field. We had a unique perspective, and we felt like we had to take advantage of this moment.
WHARTON SCHOOL PRESS: You use the word “we” when you’re talking about response to a crisis, and it’s clear that no one person can lead through a crisis alone. In the book you talk about the crisis team and how it needs to be “diverse in perspective.” Why does this need to be front of mind for prepared leaders?
JAMES: Surrounding yourself with trusted colleagues and experts is a really important factor in helping take the organization effectively through a crisis. When we talk about diversity, we generally assume a very narrow definition, and we think about race and gender. Yes, those characteristics are certainly important in responding and problem-solving, but they are not all of what we’re referring to when we describe diversity. Diversity of perspective really matters. That might mean seeking advice and counsel and input from people who are not on your leadership team, but who might sit in different areas of the organization; who see firsthand some of the challenges associated with the crisis that you’re trying to address. These are the people who might have a window into information that is absolutely critical in a time of crisis.
It’s important to recognize that perspective and expertise might come from anywhere in the organization and we shouldn’t just narrow our focus to our senior leadership team who will add valuable insight, but probably insufficient information. So, expanding who we have access to, who we seek information from, is a critical part.
WOOTEN: When I’m doing the checklist, there are a couple of things that I consider in terms of diversity in times of crisis. First, I want to hear the voices I normally don’t hear. So I’m going to seek them out. Then you want the provocateurs: people who are going to disagree with you; people who can see the pros and cons.
I want to bring everybody into the room who has the expertise to help resolve the crisis. I want people who have previous different experiences. I want execution capability and I want different levels of emotional intelligence; all the ingredients to make that diversity melting pot that you need in the room to resolve a crisis.
WHARTON SCHOOL PRESS: What do you hope that a reader coming to The Prepared Leader for insights will take away from your book?
WOOTEN: I think for me it’s the importance of creating a culture of prepared leadership. A culture where everybody’s constantly progressing through the five phases: scanning the environment, thinking about what could go wrong. Then, once in crisis mode, it’s about having people empowered to step up and roll up their sleeves.
It’s also really about the importance of learning at the individual level and at the team level. What you want is when your team comes together the learning is always more than one plus one; you want all of your people thinking proactively about the system and scanning their environment. This for me, is having a culture of prepared leadership.
JAMES: And I would add two things to what Lynn said. One is, when you’re thinking about managing a crisis and responding to a crisis, it really is about the people. And if you surround yourself with people that you trust, they’re the ones who are going to go through the fire with you. They’re the ones who are going to be there through the thick and thin and help you resolve the challenge that you’re experiencing. Having trusted counterparts throughout this process is a critical aspect of prepared leadership.
And the other thing I would say, touching on Lynn’s comments on learning, is that you shouldn’t learn for learning’s sake. You want to be able to do something with the information you gather. Crises can generate opportunities, but you only leverage those opportunities if you make investments based on new information; if your teams are able to deploy the new skills they’ve developed through really challenging circumstances. Learning allows for creative, innovative ideas to emerge, if we are intentional about seeking those opportunities.