How Leaders Can Help Organizations Overcome Scandal

April 25, 2023

leader surrounded by reporters

Overview: Organizational scandals can blindside leaders and employees alike, causing panic and leading to hasty decisions. Before rushing for the exit, leaders should aim to bring the fallout under control if possible. Executive coaching values the use of critical thinking in decision-making. In accordance with its tenets, leaders should carefully analyze the nature of the scandal and its implications.

Scandals are extraordinary organizational crises that put leadership to the test in unexpected ways. When a company gets embroiled in a scandal, the pressure is on its leaders to find an equitable way out of it. In addition to destroying the reputation of the organization, a scandal may endanger the reputation and image of its leaders.

Thus, the leaders of a scandal-ridden company face a double challenge. They must act in the interests of the organization and minimize the impact of the scandal on its existence, but they cannot neglect the personal implications of the scandal either.

Leadership coaching can help leaders prepare for every eventuality. Scandals will stretch leaders’ coping abilities to their limits.

In addition to the interests of the organization, leaders should consider the following:

  • Should they leave the organization to preserve their reputation and employability?
  • If they stay and weather the fallout, how will it impact their reputation?
  • Where should they draw the line in terms of the responsibility and consequences they’re willing to assume?
  • By staying, will they tacitly endorse the bad behaviors of their organization, even if they have nothing to do with them?
  • How will the scandal and its fallout affect the standing of the organization and the leaders’ reputations within it?

Here’s what leaders can do to help their organizations and their reputations:

Putting Someone in Charge of Managing the Situation

Reputational risk is an existential issue for many organizations. It makes sense for leaders to appoint a dedicated reputational risk manager to overcome scandal and handle the fallout.

The person appointed to the job must have the skills and resources to handle the pressures and be effective.

 Curbing the Feeling of Guilt by Association

Leadership coaching values self-awareness and emotional intelligence as essential components of effective, intelligent leadership. These abilities can help leaders avoid developing a sense of guilt by association and beating themselves up emotionally and mentally about the scandal.

It can be exhausting for leaders to deal with the ordeal of a scandal, even if they are not involved with it directly. Guilt by association is a consequence of a moral spillover effect that highly sensitive and emotionally intelligent people may experience.

Some leaders may have developed such strong psychological ownership of their organizations, that they feel hurt when the organization suffers.

To overcome scandal, leaders must pay extra attention to their emotional needs during scandal-ridden times.

Grasping the Extent of the Scandal

To gain clarity about scandals and understand the best courses of action, leaders must determine whether the problems are short-term or likely to leave lasting marks on their organizations.

Executive coaching encourages decision-making based on critical thinking. To think critically, leaders must acquire and weigh information. The first objective of a leader of a scandal-ridden organization should be to gain clarity about the scandal.

Eyeglass lense labeled clarity.
Leaders should strive for clarity before heading for the exit.

Leaving the organization as soon as possible shouldn’t be a priority unless leaders find that by staying, they condone bad behaviors and become accessories to problems.

Making a Decision and Being Firm

While rushing out the door is most often not a priority, when leaders determine scandals to be inconsistent with their values, they should be firm about their decisions to leave.

Pausing Networking

During scandal-born crises, leaders should refrain from proactive networking. When an organization is in the headlines for the wrong reasons, it can ruin the conversation and deflect it in undesirable directions.

Company scandals can be debilitating and game-changing for leaders and employees. Instead of heading to the exit immediately, leaders should weigh the specifics of a crisis against their options. Salvaging the reputation of their organization should be their top priority, especially if reputation makes up a considerable part of the value of the company.

Contact us to learn more about how you can join the IL Movement as a coach or how you can benefit from partnering with us to bring IL Solutions to you and your organization.

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