Max Barney was exhausted. He had just finished a long meeting with his current VP of Headquarter Operations, Michael Brown. Michael, who was himself getting ready for retirement, was giving Barney a rundown of a recent crisis that impacted the company. While the dust seemed to be settling, Barney recognized that this was one of the worst things to ever happen to his company.
Michael recalls the crisis in the following way:
“On the morning of January 19th, I got a call from Joanne Edwards, my contact at our major distributor, Happy and Healthy Foodmart. She told me that three of her customers had complained that Biotech’s echinacea had made them ill. I called our legal department immediately to put them on alert. By noon that day, the number of reported illnesses had risen to seven. By January 22nd, the worst possible news came in – one of those people had actually died.
I called my team together immediately to come up with a plan for an immediate Recall. We needed to manage this crisis with our employees, our distributors, and most of all our customers. Controlling the message to the public and the media was critical. We’d had Recalls before, but never in reaction to a customer death. This was a whole new ball game for us.
Once the Recall had been put in place, we needed to get to the bottom of the echinacea problem. We started looking at the suppliers and ended up in the Purchasing Department. When we discovered that Henrietta Higgins, the Assistant Director of Purchasing, had cut a deal with a new supplier I became furious, Max. I mean, it was not one of my proudest moments.”
“That’s understandable,” replied Max, “go on. Tell me more.”
“Well, Higgins received an offer from a new supplier to buy genetically modified echinacea. She explained that she thought it was a good move because it would save the company over 20% on the wholesale price. She made the decision unilaterally, Max, without every going to her supervisor or to me to discuss it.”
“What did you do when you found this out?” asked Max.
“I fired her, of course. We had no other choice, Max. It’s because of her we have this crisis. And on top of that, we’ve decided to halt all sales of all echinacea in the foreseeable future.”
“Who’s we?” Max asked, with concern in his voice now.
“My team, of course. I told my managers about my decision and they’re all behind me 100%. We all know how important it is to act quickly in this situation, Max. You can trust me to turn this situation around.”
Max left the meeting sure about two things. First, he was secretly relieved that Michael was nearing retirement. The new VP of Headquarter Operations could start fresh. Second, he had just finished reading an article about a “Crisis Ready Culture”. He knew that it was time for Biotech to start developing a crisis-ready culture.
Max drops by your office with a copy of that article. He has a post-it note on the article, with the following questions and a request for recommendations:
What Leadership Styles were used in the recent echinacea crisis? Discuss the leadership style of every person involved.
What Leadership Styles would be most beneficial in a crisis-ready culture?
What leadership competencies were evident in the recent echinacea crisis? Discuss the leadership competencies of every person involved.
What leadership competencies would be most needed in a crisis-ready culture?
What role did Emotional Intelligence (or lack of Emotional Intelligence) play in the echinacea crisis?
What role would Emotional Intelligence play in a crisis-ready culture?
What role did Authentic Leadership (or lack of it) play in the Echinacea crisis?
What role would Authentic Leadership play in a crisis-ready culture?
What role (if any) did Biotech’s current culture play in the Echinacea crisis?
How can Biotech align its current strategy, culture and organizational structure to develop a crisis-ready culture?
Give three specific and actionable recommendations that could be implemented to develop acrisis-ready culture for Biotech. (Each recommendation should be supported by course materials).