Crisis Management

Crisis reveals character

A company’s reputation is often tested most severely not during periods of stability but moments of disruption. As Janek Jayasekara notes, crisis management isn’t simply about responding to the unexpected; it is about revealing the strength of the culture, leadership and trust that an organisation has built over time.

“It is often said that a company’s reputation is built during a crisis and there is consi­derable truth in that view. Stakeholders pay close attention to how organisations respond when they’re faced with uncertainty, disruption or adversity,” he adds.

Yet, Jayasekara believes that a crisis does not create reputation as much as expose it. When conditions are favourable, organi­sations can project values, confidence and competence with relative ease. 

He explains that “a crisis strips away the narrative, and exposes the underlying culture, leadership and decision making processes that have been developed over many years. Organisations rarely fail because of the crisis itself. More often, the crisis expo­ses weaknesses in their culture, communi­cations, governance or decision making that existed long before the event.”

This makes crisis a powerful acce­lerator of reputation rather than its starting point. 

The foundations of respect are laid long ­before disruption occurs – i.e. through consi­stent action, ethical leadership and stakeholder trust. When a crisis strikes, stakeholders discover whether the organisation is genui­nely what it claims to be.

At the heart of effective crisis management is the protection of trust. While companies understandably focus on safeguarding ope­rations, assets and financial performance, Jayasekara contends that preserving stakeholder confidence is just as important.

“Effective crisis management is fundamentally about protecting trust. Corporate respect is maintained when leaders respond with clarity, decisiveness and empathy,” he declares.

Stakeholders do not expect organisations to be immune from crises. Economic shocks, operational disruptions, technological failures and external events can affect even the best run businesses. What they expect, ­according to Jayasekara, is honesty, accountability and a visible commitment to resolving issues responsibly.

He elaborates: “In many cases, it is not the crisis itself that damages reputation but ­rather, delays, confusion or poor communi­cations in responding to it. Respect is preserved when organisations demonstrate both competence and integrity in the face of adversity.” 

Some organisations emerge from difficult periods with stronger reputations. While planning, quick decision making and strong execution are important, Jayasekara ­believes that acknowledging mistakes is often even more significant.

He continues: “Stakeholders tend to place greater trust in organisations that are transparent about shortcomings, learn from setbacks and take meaningful corrective action than in those that attempt to project an ­image of perfection.”

This is where transparency and accountability become central to stakeholder trust. During uncertain periods, leaders may not have every answer at their
fingertips. But they’re expected to communicate openly about what is known, what is being done and what the potential impact may be.

“Transparency and accoun­ta­bility are the foundations of trust,” he maintains, adding that “attempts to conceal problems or shift responsibility often cause greater repu­tational damage than the original issue itself.” 

In Jayasekara’s opinion, one of the most important lessons from adversity is that stakeholders remember behaviour. They may forget some of the details of the crisis itself; but they remember whether leadership was visible, honest and trustworthy.

“One lesson that has remained constant throughout my career is that stakeholders remember how leaders behave during difficult times. In moments of uncertainty, people look for authenticity more than perfection,” he reveals. 

Respect cannot be manufactured once a crisis has unfolded. It is earned over time through ethical conduct, responsible leadership and a genuine commitment to stakeholders. Crises simply provide the moment of truth.

“In today’s world, crises are inevitable but reputational damage isn’t. Organisations that communicate openly, act responsibly and remain true to their values during difficult times often discover that trust,
respect and resilience become their greatest competitive advantages,” Jayasekara concludes.