Leading through a Cultural Crisis
1 December 2019
Errol Amerasekera
It feels like it comes out of the blue. It takes you by surprise. It sends you into shock and disbelief to the point where you can feel completely blindsided. In a period of a couple of months, weeks, or even days, it can jeopardise and threaten the very existence of the organisation you lead, or at least give rise to significant financial, relationship and reputational risk. The “it” I am referring to is a cultural crisis. A cultural crisis is an unexpected and/or deleterious event, or a series of events, which calls into question the effectiveness of your cultural approach to business and high performance.
In recent times there have been some very public crises in Australian sport. In 2013 Swimming Australia had to deal with the fallout from the under-performance at the London Olympics, in conjunction with allegations of prescription drug abuse and bullying. This year the Australian Rugby Union faced its own set of challenges in dealing with the tweeting habits of one of its marquis players and was forced to take a stand in terms of the content of those messages. And of course the most controversial of these in recent times was the ball tampering incident in South Africa. The resulting aftermath which Cricket Australia had to deal with included significant reputational damage, especially with sponsors, the public and fans.
And whilst not in the sporting sector, as I write this, Westpac bank is in the midst of dealing with a statement of claim by AUSTRAC with alleged contraventions of its obligations under the Anti-Money Laundering and Counter Terrorism Financing Act. This has seen the share price plummet by almost 10% and the “resignation” of the CEO and key members of the board including the chairperson.
Dealing with such a crisis, is one of the most challenging things that a leader will have to do. This is especially true in the sporting sector, where given the iconic place that sport holds in the psyche of Australians, these crises are often very public, and therefore the bright light of scrutiny that leaders already operate under only gets intensified.
After working with numerous sporting organisations in times of a cultural crisis, we have learned a few things which may support leadership through such a crisis – God forbid that any one has to go through such an experience. Given my penchant for breaking things down into sequential steps, there are three phases we have found beneficial in dealing with such a crisis. While I have discussed these three phases below in a way which may give the impression that they are discrete and chronological, in reality, there is significant overlap and interrelatedness between these phases. This means that leaders need to exercise judgement and discernment in terms of which phase currently requires the most focus, and which will provide the maximum leverage in terms of return on investment of time, energy and other resources.
Phase one: Retracing the shock
When a crisis happens it can send leaders (and team members) into emotional shock. The experience of being in shock is partly protective. This is because the “numbness” often associated with shock creates a degree of insulation between the repercussions of the unfolding crisis and their impact on the psychological well-being of those within the organisation, particularly those who are required to manage the crisis.
In this scenario, it is essential for leaders to firstly have the self-awareness to know that they are in a degree of shock. And then with this awareness, for reasons I shall discuss below, to not make any critical decisions from this state.
In a previous career, whilst working as a relationship therapist, I would often see individual clients in a state of shock because of what had recently transpired in their relationship. Part of the process of dealing with shock is developing the awareness that while this crisis appears to have come out of the blue, in fact, there were usually multiple warning signs and signals at earlier points in time, that for whatever reason, they chose to ignore, dismiss, make excuses for, or simply be in denial of.
For instance, I would ask clients were there earlier examples of this behaviour – the one that was the causation of their shock? Almost invariably they would reply with: “Yes, I remember on our second date where he was rude to the waiter for no reason” or “There were a few occasions where under stress, she would retreat and withdraw and become emotionally distant”.
So as leaders trace back to see previous, or even the earliest, signals or warning signs of those behaviours related to the cultural crisis, it tends to incrementally move them through, and eventually out of a state of shock. This is because they can start to see that this crisis did not come out of the blue, even though it might feel like it. But rather, there were clear harbingers of this crisis at an earlier point in time, that as a leader, they chose to ignore. Part of the developmental work of the leader is, at some stage, to unpack and develop greater insights relative to the narratives and internal psychodynamics which gives rise to these blind spots – but that is a separate discussion.
Why is it so important to start to reduce the shock state by retracing the warning signs? Because in a state of shock leaders are least equipped to make good decisions. Professional poker players (yes, I know this is a left-field example) call it playing “on tilt”. It usually happens when the player has had a couple of heavy losses, especially on hands they believed they should win. So naturally, losing those hands came as a surprise to them, and the sense of surprise is magnified into shock when the stakes are particularly high (as they are in business, and the business of sport). Playing on tilt reduces the effectiveness of a player’s decision making capacity, which means they make less than ideal decisions, which in turn increases the probability of losing subsequent hands.
In the face of a cultural crisis, a leader’s decision making capacity is required more than ever. Leadership is filled with decisions in areas occupying the “grey zone”. Answers to key strategic, operational and cultural decisions, especially in a time of crisis, are rarely clear-cut and live in the land of black and white. One of the most important leadership capabilities is being able to use one’s judgement and discernment to make good decisions. However, if leaders are in a state of shock, their judgement and discernment is impaired, which like in a game of poker, can lead to making a series of less than ideal decisions – which in turn can exacerbate the crisis.
So once leaders are aware they are in some degree of shock, they need to press the “pause” button on making critical decisions. And then retracing the shock until such a point where the shock has subsided enough so that their critical decision making ability has once again returned to optimal. This retracing process is imperative in the early stages of cultural crisis.
Phase two: Manage the crisis through the lived experience of those involved
If someone is having a heart attack, it would be inappropriate to stand over them and say: “See, too many hamburgers”. They are in a well-being crisis, so you give them CPR. Once they are stable and out of crisis, appropriate lifestyle measures can then be discussed. Phase two is the CPR for a cultural crisis. And in squeezing as much juice out of this metaphor as possible, phase three is analogous to the longer term lifestyle changes.
As the leader, once you are out of shock and your optimal decision making capability has returned, now the work starts to manage the acute phase of the crisis. The goal of phase two is to manage the immediate risks to the organisation to the point where there is a degree of relative stability.
The people most affected by a cultural crisis are those people directly involved. In a sporting context this may be players, coaches, support staff, administrators etc. Taking the time to understand and support the lived experience of these people is the critical aspect of phase two. Lived experience refers to how an individual is experiencing the crisis. For some individuals the most appropriate thing at this point in time may be to support them to retrace the shock (as in phase one), so that their critical thinking ability returns to optimal.
Understanding the lived experience of those people directly affected will reveal vital data about what individuals and the organisation might need to better navigate the crisis. If we revisit my analogy of having a heart attack – what are the blockages which need to be unblocked and how do leaders start to restore the flow of vital “oxygen” to those parts of the organisational system that most need it? An accurate assessment of these needs requires a considered and sometimes slow approach, this can be challenging in the midst of a crisis. However, paying attention to, and being guided by the lived experience of those involved, will provide information as to what needs to be “unblocked” so those vital flows are restored.
In order to best assess the immediate and critical needs of those people directly involved in the crisis, as well as the organisation in general, one of the challenges that leaders must grapple with is (temporarily) blocking out the narratives and voices of those people not directly involved.
In business, optics are important. Optics flavour relationships, and relationships are important, especially with fans/supporters, commercial partners, media and other key external stakeholders. The narratives which drive these optics usually appear plausible and reasonable and can therefore be very seductive. In other words, in attempting to mitigate the crisis by managing the optics and controlling the narratives, leaders can place an inordinate amount of emphasis on these elements. And while there is a place and a time to manage the optics, doing so in the acute phase of the crisis can relocate focus away from an emphasis of understanding the lived experience of those involved. It would be like being concerned about how your style and technique of delivering CPR is being perceived by those watching you, as opposed to focusing on the process of delivering effective CPR and monitoring the vital signs of the patient.
Additionally, the narratives which arise and the optics those narratives generate can be fuelled by speculation, personal agendas, gossip and misinformation. Therefore basing a crisis management strategy around these is fraught with danger. Understanding the lived experience, feelings, concerns etc of those directly involved and implicated in the crisis is a key objective of phase two. This is because these understandings provide real, tangible and powerful information in terms of determining the most effective points of leverage in the management of the acute phases of a cultural crisis.
Phase three: Crisis proofing (at least for the short term)
As challenging, stressful and painful as a cultural crisis can be, it also has the potential to be transformative for a business. Imagine we are still using Windows XP (apologies to all you Apple users). Some programs may run well; others may be a bit “clunky”; while others will crash in a way which may resemble a crisis. Therefore, a cultural crisis can be viewed as a symptom of using a cultural approach to business and high-performance that needs to be updated. In other words, the cultural “operating system” that we are using is out of date for what we currently need.
From the leader’s perspective, there are numerous directions and ways in which to start to “update” or transform the cultural approach. Do we need to have higher expectations? Do we need more accountability? Do we need to be more (or less) person or athlete-centric? Do we need stronger processes? Do we need to focus more on having difficult conversations? etc etc….
Where do leaders start?
If leaders have done sufficient work in first two phases, then the insights they glean and the data they collect from this work will often illuminate the pathway in terms of the direction they need to place their transformative efforts. In other words, what were the “cultural muscles” that if stronger, meant they would have been less inclined to ignore or go into denial around those early warning signs uncovered in phase one? When sitting with those individuals or teams directly involved in the crisis in phase two, based on their lived experience, what cultural elements may have supported them in what they found challenging in the lead up to and during the crisis?
For many people, this requires a slight paradigm shift. When assessing behaviour, people tend to apportion behaviour to that individual’s psychology, mindset or attitude. So they tend to place the blame for a cultural crisis on a particular individual, group or team. And of course individuals need to be held accountable to their behaviour; and also supported to better understand how their own psychology, beliefs and deeply held narratives gave rise to those less than ideal behaviours.
But additionally, an individual’s behaviour, both positive and negative, is driven partly the cultural context in which they operate. And in my view the contextual part of an individual’s experience, is as significant, if not more significant in terms of contributing to their behaviour. How often do we see an athlete who is struggling on one team, change teams only to thrive in their new environment? The cultural context that we all function in is a significant contributor to behaviour. So while it may be easier to scapegoat a few individuals, the more beneficial (and challenging) question for leaders to ask themselves is: “What is the cultural context in which these individuals were working, where they thought these behaviours (which gave rise to the crisis) were acceptable?”
Certainly when Bluestone Edge worked with the Australian Swim team in 2013 (and I am free to talk about this piece of work because it was very much in the public arena) this was the most powerful and informative aspect of the work. We sat with the athlete group, and supported and facilitated them to explore amongst themselves some of the cultural and procedural backdrop which gave rise to their underperformance at the 2012 London Olympics and subsequent behaviours. This engaged them in a way where they felt valued and not scapegoated, and also provided key psychological insights which assisted them in the transformation of their culture.
When we implement these transformations, we are effectively updating our cultural operating system. This means that to some extent we have started to address those elements which created the propensity for the cultural crisis to occur in the first place. The benefit of this is that it ‘crisis proofs’ the business – but only temporarily. At some point in time in the future, it is possible that our cultural operating system will once again have aspects which are obsolete and this will predispose the business to a cultural crisis all over again. And in some ways, as painful as it may be, this is how it should be. Just like in nature, where in order to survive and thrive, organisms must constantly adapt and evolve to an ever-changing environment, the crises we face in business (and in life) are powerful in that they give us no option but to adapt the way we do business in order to maximise the chance of an organisation surviving.
Conclusion
Having worked with multiple sporting organisations through a cultural crisis, it is not something I would wish on anyone, particularly those in leadership roles. However, as challenging as a crisis might be, leaders need to have the commitment to follow a thorough and considered approach, such as the one described above and resist the temptation to make decisions from a reactive mindset, or whilst “on tilt”. This will not only enable leaders to navigate through a cultural crisis with as minimal damage to the organisation as possible, but also start to address some of the underlying factors which created a “fertile ground” for the crisis to occur in the first place.