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scanning the environment seeing the signs interpreting cues and making sense of them as something so completely
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innate in nature wholly native to migratory animals and so hardwired in their instinctive behavior and decision
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making that it prompts the question why do human beings so frequently fail to go
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higher McDonald's essay highlights something critically important the best way to
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survive a crisis is to watch for it and see it coming before it's too late it is about catching sight of the threat
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soon enough to avert it or contain the worst and giving yourself and your organization the maneuverability to
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prepare mitigate damage and plan efficiently for recovery this is the first phase of Crisis
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management welcome to the ripple effect the podcast that takes you on a journey through the
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minds of work and faculty I'm your host Dan Loney and in each episode we'll be
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diving deep into the inspiration behind the groundbreaking research that Wharton
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professors have conducted and exploring how their findings resonate with the world today we'll be covering a diverse
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range of topics bringing you the latest insights and knowledge that you can apply to your life into work so get
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ready to dive into new ideas with the ripple effect great to have joining us today Wharton
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Dean Erica James who is a co-author of the book The prepared leader emerged from any crisis more resilient than
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before Dean James great to have you with us today thanks for your time thanks Dan
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happy to be here thank you so obviously we've all gone through crisis a lot in
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the last few years how do you view the the kind of the most important components of a leader dealing
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with crisis right now so there are five things that I think people need to think about in dealing
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with the crisis typically when we think of Crisis management we think of once something has happened what do we do at
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that point so it's sort of the response to an event but as Leaders we think we
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need to think about this notion of signal detection what are we seeing in the environment that might warn us that
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our organization is vulnerable to something we then need to prepare or plan for that potential reality
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then in those circumstances where we can't prevent something from happening we do have to respond when we find
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ourselves in reaction mode the fourth thing is to think about business recovery at some point the crisis will
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come to some sort of end and we've got to get our organizations back on track
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and recover from what we've just experienced and then lastly there's the learning from the
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crisis how do we do we take time to stop and reflect on what we've just experienced what can we learn to make us
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a better organization going forward to make us more capable of dealing with the next threat or prevent the next threat
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from happening how has that played out for you personally especially considering when you came to Wharton we
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were obviously right in the midst of the crisis I mean that's a unique component
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in a person's career to take over such an important role in in the time of a
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crisis like that right so Dan what you're describing is my joining Wharton in July of 2020 which was just a few
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months into the into the pandemic the school at that time was completely remote I moved to a new city started a
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new role interacted with my colleagues whom I had never met before for at least six to nine months all on Zoom never
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having met anyone in person or spent any time on campus so I think the thing that I needed to
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think about was what can I do to establish myself as a leader and as someone who was trustworthy that they
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could feel confident getting behind as I'm leading this organization that I literally knew very little about because
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I just had no time or experience with with Wharton before coming here and so I think
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focusing on building those relationships even though they were over Zoom uh identifying ways that would allow me to
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have credibility that they could trust me in some ways those were the important things that I needed to do I think it's
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also interesting because we've had a time where uh it there's been a lot of
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pivots and I think a lot of people have pivoted coming out of the pandemic especially in leadership in in making
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changes and adapting to what is kind of a new normal it's really important to
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use the phrase New Normal uh oftentimes when people are going through a crisis what they think about is how do I get
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back to normal how do we go back to the way things were and what I always encourage people to think about is if
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you're going back to something you have to recognize that the environment the
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world the competitors around you have all been moving forward and so if you think about
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going back then you're setting yourself and your organization up for failure
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right so the thing is how do we think about what does the new environment cause us to need to do differently and
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this is also where learning really comes into play because if we reflect on how we are a different organization if we
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reflect on the new skills that we've gained if we've reflect on the experiences that we've had we're more
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likely to Envision a different future that we can drive towards rather than going back to the way things were so
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when businesses are going through quote-unquote crisis I know you talk about this in the book about the
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importance of the crisis leadership team of being able to have that that core together as well yes so many companies
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do not a priori identify a team of people that will carry the organization under unusual circumstances we tend to
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rely on our direct reports who is our head of marketing who is our general counsel who's our head of HR right
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because that's the team that we typically work with but that team isn't always the right team to lead an
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organization through a crisis many of those roles and responsibilities are necessary but there are also things you
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have to consider that you don't have to consider in the day-to-day running of a
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business so building the team means identifying a set of skills or competencies or experiences that people
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have that might not exist on your team of direct reports are there common mistakes that leaders make when
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they're in time of crisis so the biggest common mistake is actually part of human nature so
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go back to your five-year-old self and you get caught doing something you're
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not supposed to do right right and the first thing you say is it wasn't me right right we immediately want to deny
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our involvement in something bad right that carries with us even into our adulthood so when we experience a crisis
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we assume the crisis is something bad we don't want to be associated with it so
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we tend to engage in avoidance behavior or denial behavior all of these things that disassociate us from that event and
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that's really problematic because that's time and energy that we could be using
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to identify the appropriate communication and narrative that we want to put around this that could be time
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and attention that we could be doing something more uh proactive to help address the situation as opposed to
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denying so that's I think the one common thing that many leaders engage in well
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and certainly then when you talk about what we went through with the pandemic but it obviously plays out in a variety
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of different so essential crises is the element of stress because when you have this I think there's a lot within your
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body within your mindset that just amps up the level of stress that you deal with absolutely so in the research and
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this is long-standing research what we find is that in times of stress or times of threat when people feel particularly
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vulnerable they engage in something called threat rigidity so there's an external threat
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we instinctively our body becomes rigid we become more narrow in our thinking we
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become less creative we become more restricted to the the people with whom we're going to interact so all of
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that restriction that rigidity then prevents us from being able to really engage in effective problem solving
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so with covid it was obviously something we had never gone through before and I think that element of the unknown
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in terms of a type of Crisis is probably something that's a challenge for a lot
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of leaders is not absolutely and I mean that is the core definition of a crisis it's something
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that we've not experienced before it's something that we don't have the
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resources or the experience or or some guidebook with the answers and and what we should do differently so
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um crises are unique circumstances and because they are unique because we've
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not experiences and we don't know what to do so most often we're making things
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up as we go which is fine but we've got to always sort of reflect on was that most recent
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decision the right decision if yes then let's keep going if not we need to Pivot
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and and try something else so there's this constant feedback loop and experimentation that's happening when
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we're trying to address a crisis it isn't there also just the learning from
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going through that crisis so that whether it's the same thing the same type of Crisis happening down the road
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or something different you have that experience you have that knowledge so that you can be better prepared for that
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next time you would think in theory yes that's how it's supposed to work but what
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oftentimes happens is we so want to be finished with the crisis it takes a lot out of you you're exhausted the notion
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of going back and reflecting and taking those lessons learned that they can be applied to a future event is less likely
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to happen because most of us don't invest in the learning process which is that fifth stage that I that I described
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so yes in theory we should be able to have gone through an experience once taken
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those lessons learned from it so that the next time it happens we're better prepared but too many of us don't go
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through that after action review is what they call it in the military I think a lot of times in companies employees and
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managers they expect their leaders to be prepared and and they hope that they are
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prepared but can we actually quantify the value of having a prepared leader I mean I I
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think it's it's probably unique to especially what's what's happened with
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covet the last three years right so I mean it would be a fascinating study trying to identify what are the
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variables for which we could quantify preparation in our leaders but one of the things that we know for example is
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that many crises cost a lot of money whether it's in legal fees whether it's
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in you know damage control all sorts of things so you can quantify by looking at
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um you know how much a particular crisis costs I just came back from Maui for example I was on Maui when the fires
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broke out and you see every day the escalating cost in terms of the human capital the death toll is rising every
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day for a period of time you can see the escalating costs in terms of the financially how much this is going to
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cost so those are metrics by which we can determine the cost of a crisis it's
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unclear yet how we determine how effective a particular leader was because it's a one-off situation right
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we don't necessarily have a control group in those situations but it would be
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worthwhile exploring that so we're obviously at an age right now where technology has such a a huge impact on
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our lives I wonder how much and and crises then I think also play in with what we're going through with uh the
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impact of hacking and and and and and that impact on business uh that the element of Technology can I think assist
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the leader in terms of mitigating a lot of these problems as well right again it
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perhaps so we would hope so it is a tool that can be used for exactly that purpose
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sometimes people use Technologies in ways that are actually more damning than helpful if they use social media for
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example in ways to cast revenge or to dis you know dispute antagonism or frustration or anger or hostility for
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whatever has happened in that crisis then that is not a very effective use of technology and in fact it could be more
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problematic in the book that I wrote with my co-author the prepared leader we actually talk about it a couple of
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examples where the CEO has um you know used technology social media and other Platforms in ways that costs
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him his job and the organization a lot of a lot of money if we use technology for purposes of soliciting support and
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help and guidance and communicating what's happening on a day-to-day basis and those kinds of things then yes it
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absolutely is an effective tool I've heard you talk about your co-author Lynn
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Perry Wooten and the importance she's kind of meant to you as a mentor in terms of you're building up your career
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for leaders in general how important do you think it is to have that sounding board that that extra component to to
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helping build your leadership skills it's a great question it is so vitally important so that the notion that it's
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Lonely at the Top there's a lot of Truth to that because primarily because there
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are so few people who can relate to what you are experiencing everyone else in the organization when you are the
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president when you are the CEO when you are the dean there's no one else within
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the organization that fully understands the scope and complexity of the work that you're doing and then you add on
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top of that a crisis you realize even more how alone you are and so having someone else in another organization in
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another field who understands that role I think it's really invaluable and I guess that can kind of even go
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down the chain a little bit it doesn't have to necessarily always be the c-suite but think about middle level
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level management and what that person has a leader at that level of the organization really relies on that's
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absolutely true so I say that we all have a sphere of control that we are responsible for regardless of your title
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or response or role that you play and in that regard it can be debilitatingly lonely if there are not a
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network if there's not a network of relationships that you have either within or outside of the organization
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with whom you can bounce ideas with whom you can vent and be frustrated and it's
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a safe space how do you think then the Dynamics of leadership have developed but also
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potentially can change in the future especially considering we're talking more and more about Ai and the component
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that AI can can play I mean I saw a story the other day about how AI may eventually be able to give people life
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advice and that that worries me a little bit but but it makes me think about how
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far will AI kind of impact you know the business and even leadership to a degree
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I mean honestly at this point no one knows we can produ we have the capability to
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produce technology and artificial intelligence to do just about everything but at the end of the day we are still
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human beings and there is no tool there is no artificial intelligence that can replace what comes from Human
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interpersonal contact and interaction uh so the interpersonal support the the emotional support the feedback all of
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those things that are really uh human inspired I think will continue to actually will become more and more
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important and necessary and more valued in the organization um but you know five years from now one
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year from now is quick listings are happening we're going to see much more AI but I still believe that over time
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the human only those things that humans can do the the emotional side is going to become more important let me finish
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up with this when you look now at your transition coming here to work and having gone through this period of time
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I've asked this of a lot of CEOs over the course of the last couple of years
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is did what occur and what you went through as a leader tweak any of your mindset about leading the company and
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have you seen that in in what your thought process is of what you want to do to lead Worden moving forward have
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you seen elements of that so what's interesting in my case is I didn't know
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Wharton before the pandemic right I came once it was already in this state of flux because of the external extenuating
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circumstances um so my leadership coming into Wharton was informed by that reality so if I
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were to say hypothetically would I be doing some of the things I'm doing now
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as a Wharton's leader had the pandemic not happen maybe but there are probably
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some things I'm doing now because the pandemic happened right that would not
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have been the case before so we are all changed by having gone through the the pandemic and even as a new leader coming
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in when the pandemic was first happening uh I am quite confident that my approach to leadership was informed
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by starting this role in the midst of a crisis great to have you in here today thank you so much great to be here thank
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you Dean Erica James the book by the way is the prepared leader emerge from any crisis more resilient than before the
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book that she is a co-authored with Lynn Perry Wooten thank you for listening to
00:18:00
the ripple effect we hope you found this episode informative and engaging don't
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00:18:10
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