Thought Leadership

Moral Leadership: What’s Important in the Midst of Crisis

There are many versions of a quote ascribed to various writers and thinkers, but the point is the same in all: people may not remember what you did, but they’ll remember how you made them feel. Likewise, even with difficult decisions to be made in a crisis, people are far more likely to remember how leaders made them feel and whether their decisions reflected a strong moral compass, according to Brooke Vuckovic, who teaches in Kellogg Executive Education programs such as Leading for Impact within Family Enterprise, The Leader Within and the Enterprise Leadership Program.

“There’s a hard-hearted reality that many businesses could easily fold if they don’t shrewdly manage their way through the pandemic,” Vuckovic explained. “Leaders have a tendency to hunker down immediately into save-the-company mode without an awareness of what happens if they’re misunderstood as they do so. But their execution mode must be balanced by human concerns.”

“The way business leaders and their decisions are perceived by the market-at-large break down into two phases: in crisis and after crisis,” Vuckovic noted. “Currently, people will focus on how leaders deal with employees, consumers and their community. For example, early in the crisis, Amazon and Instacart went into execution mode to meet the demand without thinking about what they’d be remembered for: not providing safe working conditions for workers. There was a strong moral outrage initially; they were blindsided because they didn’t look at the human issues involved in meeting demand. The health and safety of one’s workforce is critically important right now.”

In the short term, Vuckovic identified three key dimensions in which companies and their leaders will be judged:

• Building trust between employer and employee: a show of solidarity
  Employers must show that they empathize with their employees’ personal struggles, that they value their work and that they view their employees as team members capable of contributing to solutions. Communicating these ideas to their employees humanizes leaders and strengthens loyalty and moral alignment with one’s work. Even when companies must make the difficult decision to lay off their workforce or to shutter operations, the way in which they communicate will be remembered most. Those with more flexible balance sheets are currently watched for how they treat their frontline employees. Examples, among many, include retailers such as Patagonia and Apple continuing to pay employees while stores are closed and Target raising hourly wages and implementing other practices to aid sick and high-risk workers as well as team leads.
• Providing value to consumers: a show of appreciation
  Companies leading in providing value to their current and potential customers have offered free products, upgrades, or relaxed restrictions to improve quality of life, education and work during these altered, often chaotic circumstances. By doing so, they communicate to customers that they are aware of their current challenges, appreciate their patronage and wish to be supportive. Examples of good behavior include State Farm, which distributed a $2 billion dividend to customers after a drop in driving resulted in fewer claims, and wireless providers such as AT&T, Verizon and T-Mobile, which pledged not to cut off service for non-payment during the crisis. The opposite was true of various airlines that fought against rules requiring them to refund canceled-flight fares.
• Providing service to the community: a show of humanitarianism
  Organizations have the opportunity to communicate their awareness of the wider ecosystem in which they operate and their responsibility to society at large. “Shows of altruism humanize companies and their leaders, demonstrate their agility and prove that there is more to them than a fixation on increasing profits,” Vuckovic said. Supporting broader causes is frequently seen—or even companies that shift operations, such as Anheuser-Busch, Dyson, General Motors, Gap Inc. and Christian Siriano, which moved to produce supplies like ventilators, masks, medical gowns and hand sanitizer.

“Currently, moral leadership has focused on an inside-out framework: taking care of one’s business and employees, focusing externally on customers, and then focusing further outward on community,” Vuckovic said. “This is right and proper, as we are in the middle of the crisis right now. Crises, like power, reveal our best and worst sides and show us the work we need to do as a business community and as a broader society.”

Next up: After the crisis—the moral complexity leaders must face over the long term.

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Dr. Brooke Vuckovic teaches leadership coaching to Kellogg's full-time MBA students and has co-developed coaching programs for multiple Executive Education programs. In addition to being the Academic Director for Leading for Impact within Family Enterprise, The Leader Within and the Enterprise Leadership Program. Dr. Vuckovic teaches in many of the leadership programs offered through Kellogg Executive Education and the Center for Nonprofit Management. Outside of Kellogg, Dr. Vuckovic has an executive coaching practice working with senior executives.