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How to Lead in Times of Crisis

Posted by Tasnim Ahmed

January 7, 2021

No matter how well you manage your business or how successful an entrepreneur you are, one crisis can challenge your years of experience and cripple the business. Financial crunch, customer and media backlash, and employee dissatisfaction could damage your credibility, and completely destroy your reputation. A minor problem can quickly snowball into a huge business crisis that you never expected.

In some cases, the problem reaches a point where you are unable to manage it, putting your organization at risk. Even the most successful businesses aren’t immune to a crisis, as it can happen unexpectedly, and the time period can range from a day to a few years.

Check out the following types of crises that can strike a business and create stress for its owners.

Financial Crisis

A financial crisis occurs when an organization loses a large amount of money or is unable to pay off its debt. Bankruptcy, revenue losses, market changes or inflation can cause a steep drop in assets, which could destabilize the firm’s revenue. Although a financial crisis is a fairly common phenomenon, it can often result in catastrophic conditions for the company. In unfavorable situations, it can create a death spiral that can potentially lead to permanent closure of the company.

Natural Crisis

A natural crisis is derived from the occurrence of a calamity such as volcano, earthquake, storms, floods or any other natural disaster. While these disasters are rare, their impact on businesses are mostly chronic and long term. A prominent example of a natural crisis is Hurricane Katrina. In such a situation, a business needs to be proactive in building contingency plans to ensure business continuity. Additionally, if you are aware that the location of your company is prone to natural disasters, or exposed to extreme weather conditions, you need to be well prepared.

Technological Crisis

With technology advancing at an extraordinary pace, businesses depend heavily on it to facilitate their day-to-day activities. Without it, businesses will not be as efficient as possible. For instance, the business of eLearning completely depends on the internet. If the internet were to crash today, eLearning will have to inadvertently cease operations until the internet came back online, leading to an inability to make profits. The occurrence of such a situation is considered a technological crisis.

Organizational Crisis

Organizational crises are generally related to the company, management and consumers. There are situations when the company exploits its customers for the business’ benefit. On certain occasions, customers go against the company and form groups to boycott, launch class action suits and damage company reputations to make the management accept their demands. The only solution to this is to foster an organizational culture that puts customer interests and successes at the forefront.

Additionally, organizational crises concern the employees, when management makes decisions that aren’t favorable for the staff or stakeholders. It could be in the form of illegal actions taken by the company, neglecting the employees’ interests, putting stakeholders’ money at risk, or an act of deceit. To deal with such crises, the company may end up in court, leading to financial strain and reputational damage.

Workforce Crisis

This type of crisis happens when an employee is involved in an illegal or unethical act, which might tarnish the company’s image. You always need to evaluate the situation, take disciplinary measures and act accordingly. Keep things transparent if the media, your competitors or others get involved.

As a leader, it is imperative that you are always ready to tackle such situations. The way you and your organization respond will impact the reputation of your brand.

Regardless of the type of crisis, you need to have the following leadership skills to successfully steer through the situation.


Agility is key. Efficient leaders have an experimentation mindset and the ability to deal with uncertainty. They try their best to resolve a problem in some way or another. They learn from their failures and don’t fall back into old habits.


Being able to adapt is crucial to managing any tough situation in life. You don’t simply pursue Plan A no matter what happens. You need to have a Plan B, collect input from experts, gather fresh perspectives, and collaborate to come up with an excellent crisis management plan when the situation demands.


Astute leaders know they don’t have the solutions to every problem or crisis, so they create a crisis management team. They are even open to expedient decision-making, when required.


For a leader, communication is critical. Clear and concise communication during a crisis helps you get your point across so you aren’t misquoted or misinterpreted. You need to be calm and communicate effectively.


Leaders need to make connections and collaborate. During a crisis, they can encourage and inspire employees, and gather support from their professional networks. You need to have self-control, hold the team together, demonstrate empathy, and build relationship management skills.

Successful crisis management is about being responsive and proactive. You need to understand the crisis well, and understand how it can be resolved. If you struggle to adopt to a crisis management program, consider bringing on a crisis management expert to help you through your tough period so you can come out the other side stronger than ever.


Tasnim Ahmed
Tasnim Ahmed

Tasnim Ahmed is a content writer at Escalon Business Services who enjoys writing on a multitude of subjects that include finops, peopleops, risk management, entrepreneurship, VC and startup culture. Based in Delhi NCR, she previously contributed to ANI, Qatar Tribune, Marhaba, Havas Worldwide, and curated content for top-notch brands in the PR sphere. On weekends, she loves to explore the city on a motorcycle and binge watch new OTT releases with a plateful of piping hot dumplings!

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