What Small Business Owners Need to Know About Managing vs. Leading During a Crisis

To Be a Manager or a Leader? About 40% of small businesses fail to reopen after a crisis due to poor crisis management or leadership strategy. Leadership shapes a business and provides the agenda going forward. However, if the agenda is more directed at managing the situation, it can misdirect employees and confuse people as to what is happening.

Businesses need to have strong leaders who can guide employees during a crisis and unite the company as a whole. So, how does a business differentiate its strategy from managing vs. leading?

Don’t worry; this guide dives deep on the dos and don’ts of managing and leading. From communicating to being available, being a leader can be challenging. But with these tips, leaders can be better equipped to handle a disaster.

Now, read on about how to lead during a crisis:

Managing vs. Leading in a Crisis

Managing a crisis is different from leading one. Let’s take a look at two ways managing can be damaging to a company:

Taking a Limited View

In times of crisis, a manager will likely have such a limited perspective that he or she cannot see the big picture. In that case, he or she will likely react instead of considering how their actions will influence the future performance of the organization.

A leader, however, will step back and look at all the obstacles around to see how each action will affect each entity. By having a broad perspective it will help advance the companies objectives. After all, a leader has to consider how each decision will affect the next and have a plan in place for that situation.

Thus, a leader doesn’t just react; instead, he or she takes action by having a broad perspective.

Forgetting About the Human Effect

It can be easy to focus solely on the data, price, and daily costs of a business. However, a manager who is prioritizing those aspects over employee wellbeing is not a leader at all but rather trying to manage the situation.

While those aspects are important to keep in mind, leaders need to first think of their employees’ needs. A leader realizes that caring for the team is the most critical aspect of leading in the midst of a crisis. Businesses need to unite the team during a crisis and bring together their goals as a united front. This first starts with a clear and vocalized agenda that binds work and purpose.

A business’s agenda can be then achieved by flexible leadership, where each employee understands how they can properly strengthen the organization. This gives a deeper purpose to each task, big or small.

However, no leader can forget about the human impact of a crisis. Businesses can help unite their employees by offering benefits, incentives, or even guaranteeing wages.

How to Lead in a Crisis

When a crisis ensues, it’s essential to lead with responsibility, confidence, and understanding. Here are three effective ways to lead during a crisis:

Communication Is Key

During an emergency, time is limited. Most often, the beginning of a crisis introduces great pressure to act. However, sometimes a business has to begin handling a problem before they understand the issue.

It’s important to take charge and be active as a business. Waiting to act or over-analyzing the problem can lead to riskier outcomes.

During this time of action, communication is essential. All businesses should communicate their plans to each member of the business clearly and effectively. Explain to them how the organization is reacting, whether through an email or Webex.

Let them know how the new regulations will affect their jobs and income. Try to be as transparent as possible, and remember that everyone is going through this together.

Be Present and Available

All leaders should be available during a time of crisis for anything from providing project guidance to listening to how the crisis is impacting team members on a personal level. However, since leaders can’t always be available for in-person meetings, let employees know the best way to get in touch for support, questions and updates.

During a crisis, employees like to hear from their leaders regularly. If a leader is confident or calm, employees will likely feel more at ease that everything will be okay.

Leadership during this time should also be more flexible. Business should not halt due to one person not being available. Thus, include a wide range of people into a business’s decision-making process to mitigate potential bottlenecks in the system.

That way, if one person is not available, another person can handle it. It makes the process easier and more efficient.

Commit Department Resources For Future Crisis

As the crisis unfolds from the early beginnings, the pressure to act will ease as will the need to make complex business decisions. By then, businesses should look at how recovery should take place and start transitioning back to normal. Leaders should also place critical resources aside for future crises. It’s important for businesses to be prepared if something similar were to happen.

In fact, only about 62% of businesses have a crisis plan in place, and only a few of them practice it frequently. Thus, leaders should develop an action plan aimed at defining their actions towards any potential emergencies. This plan should capture past learnings from the past crisis.

While it’s impossible to know the future, businesses should prepare themselves by creating a training program and practicing it regularly. That way, employees understand what to do if a similar situation were to occur again. In fact, it will decrease the fear associated with the situation and instead promote education and confidence.

Be a Leader Today

Being a leader is difficult and even more so during a crisis. Oftentimes, managers will want to manage the situation instead of being proactive and taking a holistic approach.

For example, instead of focusing solely on the numbers, it’s important to think of the big picture. Look at how each action will affect the employees, customers, and future plans of the company.

Thus, communication is key, especially during a time of crisis. All leaders should communicate their actions clearly and effectively.

Remember be as available as possible. By creating a calm and confident atmosphere, employees will try to mirror it. For more information regarding managing vs. leading, contact us today.