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Organizational Culture and Leadership Style: The Missing Combination for Selecting the
Right Leader for Effective Crisis Management
Melissa R Bowers, corresponding author
Associate Professor and Beaman Professor of Business
242 Stokely Management Center
Department of Business Analytics and Statistics
The University of Tennessee Knoxville
Knoxville, TN 37996-0562
Phone: (865) 974-1736
mrbowers@utk.edu
J. Reggie Hall, Colonel, United State Air Force, Retired
Bald Eagle Associates Strategic Consulting Services
Principal Owner and Consultant
Ogden, Utah
Phone: (385) 439-2833
reggie.hall@beaorg.com
Mandyam M. Srinivasan
The Pilot Corporation Chair of Excellence in Business
243 Stokely Management Center
Department of Business Analytics and Statistics
The University of Tennessee Knoxville
Knoxville, TN 37996-0562
Phone: (865) 974-1737
msrini@utk.edu
“The authors would like to thank Kathleen D. Close, Major General United States Air Force
(Retired) for all of her support, encouragement, and assistance in making this article a
reality.”
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Organizational Culture and Leadership Style: The Missing Combination for Selecting the
Right Leader for Effective Crisis Management
Abstract
Most organizations faced with a crisis rely on the leader in place at that time to lead them out of
the crisis, often with disastrous results. When the crisis gets out of hand, these organizations
belatedly realize that the current leader does not necessarily possess the leadership style required
to effectively manage the crisis. We present a set of Crisis Response Leadership Principles (CRLP)
to help organizations successfully prepare for and manage a serious crisis. To accompany the
CRLP, we provide a prescriptive guide termed the Crisis Response Leadership Matrix (CRLM) to
help an organization improve its initial response and enhance the effectiveness of its crisis
management effort by choosing the right leader. Combining the organizational culture element
with individual leadership styles, the CRLM offers a standard methodology allowing organizations
to match a given crisis with the best possible crisis response leader. We present a real-world case
study that describes a successful implementation of the approach, focusing on the U.S. Air Force
Taiwan-4 crisis, to our knowledge, the first time the Taiwan-4 crisis is addressed from an
organizational leadership perspective. Organizations adopting this methodology can confidently
choose the right person to lead a swift effective response to a serious crisis.
KEYWORDS: Crisis management, leadership style, organizational culture, crisis management
leadership.
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THE TAIWAN-4 INCIDENT: A HIGH RISK/HIGH MAGNITUDE CRISIS
This article focuses on serious crises, namely high risk/high magnitude crises with potential
impacts so severe that they can threaten the credibility, perhaps even the survivability of the
affected organizations. One such example is the United States Air Force (USAF) Intercontinental
Ballistic Missile (ICBM) Nuclear Weapons Related Material (NWRM) mis-shipment to Taiwan
referred to as the “Taiwan-4” crisis, a matter of national security that threatened to undermine the
credibility of the USAF. This crisis unfolded in August 2006 when the USAF mistakenly sent
four nuclear fuses that help trigger nuclear warheads on Minuteman ICBMs, to Taiwan instead of
four replacement battery packs requested for use in Taiwan’s fleet of UH-1 Huey helicopters. More
than 18 months transpired before Department of Defense (DoD) officials realized the wrong parts
had been erroneously shipped, and the news hit the media in March 2008 (White, 2008). U.S.
Secretary of Defense, Robert Gates, found the incident “disconcerting” and launched an immediate
investigation (Hoffman, 2008). In a move unprecedented in U.S. Military history, two high-
ranking officials, Secretary of the Air Force Michael Wynne and Chief of Staff General Michael
Moseley, were both forced to resign in June 2008 (Staff Report, 2008). This incident presented a
serious crisis because it threatened to undermine the ability of the USAF to secure and account for
the nuclear weapons arsenal.
Serious crises often drive organizations to predictable mitigation strategies focused on
managing distractions rather than prioritized actions targeted at crisis response. Moreover, many
organizations operate in a reactive mode, waiting for public criticism, emergencies, or negative
publicity before they act (Girboveanu & Pavel, 2010). A more proactive approach, based on three
key principles we present in this paper, can help organizations to prepare for, and successfully
manage a serious crisis. These three principles, the Crisis Response Leadership Principles
(CRLP), provide a practical framework for an organization to improve its initial crisis response
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and enhance crisis management effectiveness. These principles offer a prescriptive methodology
to be used in conjunction with a crisis management tool, the Crisis Response Leadership Matrix
(CRLM), which serves to match a given crisis with the best possible crisis response leader based
on organizational culture and individual leadership style. We present a case study that describes
how these principles were applied to the Taiwan-4 crisis supply chain management recovery
demonstrating the impact of leadership style and organizational cultural on optimal crisis recovery.
To our knowledge, this is the first time the Taiwan-4 crisis response is addressed from an
organizational leadership perspective.
MANAGING CRISES
Organizations are keenly aware of the potentially devastating impact of a crisis. Typically
when a crisis occurs, the response from the organization facing the crisis can range from
pandemonium to a controlled, purposeful, and well-orchestrated crisis resolution depending on the
characteristics of the leadership team in place at the time, and the prevailing organizational culture.
The response to the crisis will determine the trajectory of recovery and future organizational
performance. In preparation, vigilant organizations should scan the horizon for signs of an
impending crisis. Since the job of leadership is to address the crisis as quickly and effectively as
possible, an enhanced environmental scan is prescribed by the CRLP that, unlike the traditional
environmental scan, also includes an organizational culture and leadership team assessment as
both directly impact the probability of successfully managing a crisis.
Organizations, however, rarely allocate resources to crisis management preparedness since
crisis management is not a part of their day-to-day operational activities. It is noted that “despite
past disasters and the millions of dollars of damage they have rung up, many organizations are not
prepared for a catastrophe to occur.” (Hickman & Crandall, 1997) Crisis management readiness
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receives little to no attention under normal operating conditions for a variety of reasons, one of
which is the belief that the organization is unlikely to be affected by a crisis. In an article on crisis
management, Lockwood cites a 2005 Disaster Preparedness Survey indicating that even after the
9/11 attacks, forty-five percent of the organizations surveyed did not create or revise disaster
preparedness plans. (Lockwood, 2005)
Another reason why organizations rarely allocate resources to prepare for crisis management
stems from a notion that it is very difficult to anticipate a crisis. Lockwood presents five reasons
why managers and organizations fail in this regard:
1) A state of denial that it can happen to the organization,
2) A reluctance to make crisis preparedness a priority,
3) A lack of awareness of the risks inherent to the business,
4) Ignorance of warning signs accompanied by a failure to critically analyze the
organization’s own history or the disaster experiences of others in the industry or locale,
5) Reliance on weak, untested plans that will not effectively protect organizations in a real
crisis.
The CRLM considers the organizational culture and the leadership traits needed for successful
resolution of the crisis, and the CRLP provide clear guidelines on how organizations can adopt a
proactive process to prepare for serious crises and manage a crisis as soon as it occurs, thereby
prompting a positive recovery trajectory. Before describing this approach, we present some
realities that underscore the need to develop and apply the CRLP to improve crisis response and
organizational performance.
The Reality of Crisis Management
Reality 1. Crisis dynamics create a compressed time and space continuum. At the moment of a
crisis, organizations do not have enough time to do the things necessary for optimal response.
According to Weiner and consistent with Lockwood’s findings, research shows that the vast
majority of crises develop because organizations fail to identify a potentially contentious issue at
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an early stage, which leaves them unable to develop a plan of action to “manage the issue before
the issue manages them.” (Weiner, 2006) So when the crisis occurs, organizations quickly try to
fit themselves and their crisis response to the situation. The pace of situational developments force
rapid changes to organizational policies, procedures, and cultural identity as well. As Weiner
notes, “The first casualty of a crisis is perspective. Characteristically, the pattern is one of
escalation, with the initial response being surprise … As events escalate, management senses a
loss of control over the issue. Intense scrutiny by the media, regulators, stakeholders and
competitors breeds a siege mentality, tempting a company to batten down the hatches.”
Reality 2. There is a perceived immediate need for the leader to demonstrate publicly that
everything is under control.
The crisis response is often shaped by the perceived need to cope with the media by framing
perceptions, which often takes the form of attempting to contain the crisis, or “just making it go
away” (Zald, 1996). Druckman points out that “the framing effect occurs when a communicator
selects certain factors to emphasize e.g. ‘everything is under control,’ hoping that the people who
receive the message will focus their attention on those factors when forming their opinion and
making judgments.” (Druckman, 2001) The objective of this approach is to convince the public
that the situation is well in hand thereby reducing media attention. Rarely is this approach
effective. On the contrary, it distracts the leader’s attention away from taking actions to actually
resolve the crisis, leaving the leader relatively little time to adequately assess the situation and
ensure he is doing the right thing. Coombs notes that the primary focus should be on what is being
done to address the crisis, not on how to best handle the media. (Coombs, 2011)
Reality 3. Crises do not develop overnight. They are rooted in systemic issues that send out
signals that most leaders ignore because of the prevailing organizational culture. Since all
organizations will experience a crisis at some point in time they need to know how they will
respond to a crisis well before its onset.
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It is noted that “An issue can fester for months, maybe years, until events and circumstances
intersect and propel it to center stage of the public agenda.” (Weiner, 2006) Both the September
11 terrorist attacks and the Hurricane Katrina disaster were preceded by many unheeded warnings
of potential risks – for instance, notice of Al Qaeda activities in the first case and weak levee
protection in the second. Yet adequate preventive measures, which in hindsight were glaringly
needed, were not taken before these deadly events occurred.
Indeed, as established by Lockwood, most organizations take a “this will never happen to
us” attitude towards the potential of a crisis occuring. However, contrary to this wishful thinking,
crises can no longer be thought of as rare or unlikely. To the contrary, as noted by LaLonde, the
occurrence and diversity of types of crisis in our societies have increased. (LaLonde, 2007) Thus,
it is critical that organizations prepare for crisis response well in advance.
So how can an organization ensure that it is prepared and postured for successful response
when a crisis occurs? By accepting the crisis management realities, understanding the CRLP crisis
management principles, and applying them to the crisis situations, the organization can
successfully deploy the optimal crisis response. Since all organizations are very likely to
experience a crisis at some point in time, they can position themselves to successfully maneuver
through any crisis by applying the CRLP before the crisis occurs, thereby enabling them to quickly
select the appropriate crisis response leader via the CRLM at the onset of the crisis using the
proposed approach to accelerate their positive response trajectory.
Crisis Response Leadership Principles
Having identified the crisis management realities, we offer a set of corresponding enduring
principles that counterbalance the impact of the crisis realities and when applied to crisis recovery
enable organizations to mitigate those effects and take actions to affect a positive crisis recovery.
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Principle 1. “Crisis management requires more time and resources than initially perceived.
Manage expectations early to facilitate stakeholder ownership. Acquire additional resources and
time to expand the required operating space.”
Principle 2. “Focusing on PR distractions is misguided. Focus the priority of effort on resolving
the crisis. It is critical to communicate that a clear action plan is being developed to deliver a
successful crisis response. Don’t be tempted to declare victory too early because it erodes
credibility and prolongs the actual crisis.”
Principle 3. “Culture plays a huge role in the development and management of a crisis.
Furthermore, leadership style matters – not all leaders are best suited for handling a serious crisis.
Therefore, organizations must ‘perceive, prepare, and position’ for crisis response by knowing the
organization’s culture and leaders, and applying the CRLM (detailed in the next section) based on
crisis environment, organizational culture, and leadership style to select the right leader for the
crisis.” CHOOSING THE RIGHT LEADER MAKES ALL THE DIFFERENCE
All leaders have a signature style that characterizes their approach to leading an
organization. Leadership styles have been classified and categorized in a variety of ways, and
different styles have been shown to be more effective in different situations. Choosing the right
leader to manage a given crisis is clearly not a “one size fits all” proposition. Placing the wrong
leader at the helm in a crisis situation can virtually guarantee a catastrophic result.
How Leadership Traits Affect Crisis Response
Four leadership styles are considered. Three of these, Directive, Transformational, and
Transactional are as presented in Pearce et al., while the fourth, Cognitive, aligns with Fiedler’s
cognitive resource theory. (Pearce et al, 2003; Fiedler et al, 1989)
The Directive leader characterized as strong and decisive, adopts a take charge approach,
has well-defined expectations, communicates clearly and typically expects people to follow the
dictum without questioning it too deeply. This “do what I say” approach can be very effective in
an internal crisis or when working with problem employees. However, such a leadership style
may inhibit initiatives in crisis situations that require organizational flexibility or innovative action.
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The Transformational leader is described as self-assured, adaptive and logical. He/she
consults with subordinates, and seeks inputs to make consensus decisions. This type of leader
thinks strategically, is detail-oriented yet able to see the big picture, and is capable of drawing
from diverse experiences to connect the dots using cause-effect logic. This type of leader may not
be the most appropriate in the case of an extreme time crunch, if only because it takes time to build
consensus.
The Transactional leader can be thought of as a “dot the i’s and cross the t’s” kind of leader.
This leader focuses on a possibly small set of individual details, is intelligent, follows the rules,
and gets the job done. The Transactional leader is bound by rules and regulations making him or
her ill-suited to manage the dynamics of most emerging crisis situations.
The Cognitive leader is perceptive and imaginative. Characteristics of the Cognitive leader
include knowledge leadership, expertise in a specific area, big picture thinking, strategic thinking,
and participative decision-making. While the Cognitive leader is often perceived as lacking
sufficient empathy and interpersonal skills to successfully manage a serious external crisis, he/she
may be quite effective leading an internal crisis in cooperation with his/her experienced, seasoned
staff to coordinate communication, and provide managerial insight, infrastructure and support.
Simply defaulting to the incumbent in place to lead a crisis response effort, such as the
CEO, as suggested by Tsang, can have disastrous results. (Tsang, 2000) A leader well-suited to
manage a particular crisis in a given organizational culture may not be well-suited to manage a
different crisis in a different organizational culture. Organizations can recover from a disastrous
crisis under the leadership of the individual whose style is best suited for the specific dynamics of
the organization’s culture and the given crisis. Thus, attributes of the organizational culture and
the crisis itself must be considered to best match the crisis management leader with the crisis event.
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KNOWING THE ORGANIZATIONAL CULTURE AND WHY IT MATTERS
Culture is a set of basic, tacit assumptions shared by a group of people about how the world
is and ought to be. These tacit assumptions determine the group’s perceptions, thoughts, feelings,
and to some degree, their overt behavior, driving their actions and responses. Naturally, these
assumptions shape the organizational culture (Schein, 1996). Three organizational cultures are
considered: the Hierarchy and Clan/Adhocracy cultures (Kinicki and Fulgate, 2012), and the
Elitist culture (Wiener, 1988).
A Hierarchy culture can be characterized by a rigid hierarchical structure, with a strictly
defined set of core values that demand detailed processes and systems to drive compliance. The
Hierarchy culture is generally risk averse. It is a culture laden with policy and regulations that
may tend to limit individual creativity.
Organizations with a Clan/Adhocracy culture typically have few formal, rigid processes,
an entrepreneurial spirit, and an empowered workforce. Organizations with a Clan/Adhocracy
culture are not risk-averse. They are willing to take risks, but such risks can be a detriment in a
crisis situation if risk-taking plays a role in the leadership strategies formed to cope with the crisis.
Taking undue risks while efforts are underway to manage any crisis leaves little room to maneuver
if something goes wrong.
The Elitist culture tends to be dictatorial in nature with intrinsic qualities or perceptions of
worth. The pervading belief is that “we are smarter and better.” Power is concentrated in the
hands of a few. These organizations believe that they possess special privileges and have special
responsibilities; they believe that the same set of rules that apply to organizations in general do not
apply to them.
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THE CRISIS RESPONSE LEADERSHIP MATRIX
The CRLM crisis management tool, provides a rubric for identifying the type of leader best
suited to lead an organization through a serious crisis given the crisis environment and
organizational culture. The crisis itself can be either internal (such as moral or ethical failures, an
unanticipated change in leadership, poor oversight, and product failures) or external (such as
environmental disasters due to acts of nature, pandemic threats, targeted public acts, or stock market
crashes) to the organization. The three organizational cultures, Hierarchy, Clan/Adhocracy, and
Elitist are combined with the crisis environment to form the CRLM. Each cell is then populated
with the leadership style, Directive, Transformational, Cognitive, or Transactional, best suited to
manage the particular crisis. The CRLM is presented as Table 1.
Insert Table 1: The Crisis Response Leadership Matrix (CRLM)
The CRLM rubric is applied to the widely-known Tylenol, New Coke, Netflix, British
Petroleum, Hurricane Katrina, and Penn State crises, as well as the USAF “Taiwan-4” crisis. We
validate the CRLM by stepping the reader through a categorization of the culture, crisis, leadership
style of the crisis management leader, and the success of the chosen leader in each case.
Tylenol In 1982, Johnson and Johnson (J&J) CEO James Burke faced a crisis both internal and
external in nature: seven people died from ingesting cyanide-laced Tylenol capsules. Confident as
a decisive, take-charge, yet transformational leader of one of the world’s most trusted, well-
respected companies with a Hierarchy culture, Burke successfully led J&J through the crisis by
immediately recalling 31 million bottles of Tylenol and replacing them with tamper-resistant
packaging (Prokesch, 1986; Thomas, 2012; Foster, 2000). In 1986, faced with a similar crisis, this
time the death of one individual again from cyanide-laced Tylenol capsules, Burke guided J&J
successfully through this crisis by quickly recalling more than $100 million dollars of Tylenol
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capsules and replacing all capsule products with caplets, a decision from which emerged an even
stronger Johnson & Johnson. Burke’s handling of the crisis is now cited as a “gold standard” in
crisis control (Yang, 2007).
Coke In response to consumer taste tests and a loss of sales to its leading competitor Pepsi, in
April 1985, the Coca-Cola Company replaced its primary soft drink product, Coke, with a newly
formulated product it called, “New Coke.” An American icon, the elitist Coca-Cola Company was
shocked when the switch was followed immediately by a public outcry to bring back the old Coke
(Choueke, 2011). A switch viewed previously as key to regaining market dominance left the
company facing its own internal crisis as the enraged public demanded the return of their beloved
product (Keough, 2008). By July 1985, Roberto Goizueta, the cognitive and somewhat directive
Chairman of Coca-Cola, successfully guided the company out of the crisis with his announcement
of the return of the original Coke product renamed Coke Classic (Fink, 2010).
Netflix Known for its entrepreneurial Clan/Adhocracy culture, Netflix announced a significant
change in its product pricing scheme in June 2011 (Copeland, 2010). Netflix increased the price of
a package combining video streaming and mail order DVD rentals from roughly $10 per month to
$16 per month. Outraged by the change, customers cancelled their subscriptions which led to an
internal crisis and a significant decline in the price of Netflix stock (Gilbert,2011). As a follow on
blow, in September 2011, Reed Hastings, CEO of Netflix, subsequently announced the creation of
Qwikster, a separate business that would handle all DVD subscriptions leaving Netflix to focus on
the video streaming business. Overwhelming customer disdain leading to an exodus of 800,000
customers accompanied a further decline in stock price (Wingfield &Stelter, 2011). A few weeks
after the disappointing move, Hastings, known for his adaptive, transformational leadership style,
attempted to right the wrong announcing the dissolution of Qwikster and return of the DVD
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business to Netflix (Ryan, 2013). The adaptation allowed Netflix to recover and by the third quarter
of 2014, its stock price was $480 per share.
Katrina In August 2005, a Category 3 hurricane named Katrina ravaged the U.S. Gulf Coast
leaving nearly 2000 people dead in her wake, destroying homes, businesses, property, and
infrastructure along the coast from Florida to Texas. Katrina was one of the most deadly and costly
hurricanes on record resulting in billions of dollars in damage (Moynihan, 2012). Michael Brown,
then director of the Federal Emergency Management Agency (FEMA), was placed at the forefront
of leading the crisis management effort. The public quickly lost confidence in Brown’s abilities to
lead the recovery. As a transactional leader, he became consumed with the need to adhere to
FEMA’s administrative standard processes and procedures and was unable to move beyond the
bureaucratic façade of red tape generally associated with the Hierarchy culture (CNN, 2005; FEMA,
2005). U.S. Coast Guard Admiral Thad Allen replaced Brown (Balz et al, 2005). Allen, known as
an unflappable man of action, took the leadership reigns and did whatever was necessary to break
through red tape and get the job done (White, 2005). The transformational element present in his
leadership style allowed Allen to see the big picture, and to transform that understanding creating
action plans built on shared values and common goals, all of which contributed to his facilitating
successful recovery efforts in the Gulf (Magner, 2011).
British Petroleum British Petroleum (BP), considered an elitist leader in the petroleum industry,
found itself at the center of the biggest oil spill in United States history in April 2010. The failure
of a blowout preventer led to the explosion of one of BP’s oil rigs in the Gulf of Mexico and the
deaths of 11 people (Elkind et al, 2011). The company’s CEO, Tony Hayward, characterized as a
results-oriented, practical, operational, directive scientist-leader, did not immediately grasp the
enormity of the situation (Bednarz, 2012; Conway, 2008). BP called upon Robert Dudley, a
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decisive yet compassionate transformational leader to manage the crisis (James, 2011). With
Dudley at the helm, BP successfully capped the well, initiated a massive cleanup effort in the Gulf,
and managed to regain public confidence.
Penn State In November 2011, the Pennsylvania attorney general brought formal sexual abuse
charges against Jerry Sandusky, the defensive master-mind of the Penn State Nittany Lions football
team (Oharan et al, 2011). Suddenly Penn State, a University with an elitist culture evidenced by
its “We Are Penn State” motto, found itself at the center of a crisis internal to its revered football
program - perhaps the biggest scandal in college sports. Following the dismissal and resignations
of numerous university officials, Jerry Sandusky was found guilty on 45 counts of sexual abuse in
June 2012 (Simpson, 2012). Shortly thereafter, the NCAA levied a sentence on the Penn State
football program that some speculated might be worse than the “death penalty.” The crisis
management effort, which was led by the institution itself, suffered because of the entrenched
institution’s directive style of self-governance. The resolution of the Penn State crisis and its long-
term effect on the reputation of the institution remain to be seen (Wolff, 2012).
Table 2 summarizes the application of the CRLM to these classic crisis management cases.
Observation confirms that the strictly transactional leadership style is not effective in managing
crises. Transactional leaders are typically unable to adapt and effectively maneuver organizations
through a crisis situation because their strengths lie in following a well- established, structured set
of existing rules and regulations.
Insert Table 2: Validating the CRLM with classic crisis management cases
A second generalization is evident. The leader best suited to guide an organization through
an external crisis is a transformational leader. Because external crises impact individuals beyond
the walls of the organization, it is critical that the leader in such a crisis situation sees the bigger
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picture to understand the scope of the crisis and execute an optimal response. It is equally important
for the leader to willingly seek the advice of those closest to the situation at hand and leverage that
expertise to form a logical yet flexible and adaptive crisis response plan, hallmarks of a
transformational leadership style.
As noted earlier, knowing the organizational culture and traits of the leadership team can
help senior leaders set the vision for optimal crisis response and prepare the organization for action
well before a crisis occurs. Such was the case with the approach undertaken by the USAF to
reinvigorate the nuclear supply chain, and in particular the 748th Supply Chain Management
Group (SCMG), an organization within the Air Force Materiel Command (AFMC) tasked with
managing the Air Force Supply Chain for the Ogden Air Logistics Center, at Hill Air Force Base
in Utah, the site of the Taiwan – 4 crisis. The 748th SCMG applied CRLP in their crisis recovery
efforts to successfully restore ICBM supply chain management compliance following the Taiwan-
4 crisis that was briefly presented at the beginning of this paper.
TAIWAN-4: THE U.S. AIR FORCE FACES A SERIOUS CRISIS
The USAF faced significant ICBM supply chain management and asset handling
challenges in recent years. A series of unfortunate incidents in ICBM asset management,
indicative of larger systemic problems, served as a “Burning Platform” to change how the USAF
managed the ICBM Supply Chain.
The Taiwan-4 Crisis and Reality 1. “Crisis dynamics create a compressed time and space
continuum. At the moment of a crisis, organizations do not have enough time or operating space
to do the things necessary for optimal response.”
The Taiwan-4 incident placed USAF leadership under immense media scrutiny, and
outcries from across the nation questioned the security of the USAF nuclear arsenal. One of the
ramifications of this incident was an erosion of public confidence in the USAF’s ability to
positively control its NWRM inventory. During the two and a half month period immediately
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following the Taiwan-4 incident, Secretary Wynne and Chief of Staff Moseley, not only testified
before congress, but also engaged the USAF in taking significant corrective actions.
Unfortunately, the complexity, depth, breadth, and scope of such crisis dynamics do not allow for
short term fixes. Even if organizations are given some time to devise a plan and set corrective
actions in motion, as was the case with the USAF following the Taiwan-4 incident, such efforts
typically prove to be inadequate. Unless organizations are prepared and postured for the crisis
beforehand, they will not have time to quickly formulate an optimal recovery response strategy
and rapidly execute it in the confined and constrained crisis response environment in which they
are forced to operate . . . there simply isn’t enough time available when the crisis happens to figure
out and execute the appropriate response strategy.
The Taiwan-4 Crisis and Reality 2. “There is a perceived immediate need for the leader to
demonstrate publicly that everything is under control.”
Given the volume and intensity of this media maelstrom, the USAF moved quickly into
action immediately inventorying all of its nuclear weapons and associated parts and equipment
launching a full investigation. Despite these efforts, as noted, Secretary of the Air Force, Michael
Wynne, and Chief of Staff, Michael Moseley, both, were forced to resign. In addition, the USAF
relieved from duty several officers in command positions. These drastic measures were aimed at
identifying what was perceived as the root cause of the incident, poor leadership, and
demonstrating corporate resolve in fixing the problem. The hope was that taking these
extraordinary actions would instill confidence in the public that everything was under control and
move the crisis off the national center stage. Unfortunately that strategy did not play out, and over
the ensuing weeks and months the USAF endured intense pressure and repeated inquiries as to
how this could have happened. Dealing with the ever increasing negative media exposure
subsumed the real crisis and in effect became the crisis itself.
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Serious crises are not events occurring on a standard cycle that can be tracked and
monitored with exacting precision. Similarly, it is difficult to predict when and where a tornado
will strike, but it is possible to foresee the atmospheric conditions conducive for such events with
relative precision. For those who live in the section of the U.S. known as “Tornado Alley,” being
prepared for the inevitable twister is a way of life and part of those residents’ strategic planning
for the future… their lives literally depend on it. However, unlike these residents, senior leaders
dedicate little if any effort to preparation for an unlikely event such as an organizational crisis.
Resisting this natural tendency is one of the biggest challenges for senior leaders, and the CRLP
provide a means to counterbalance this effect.
The Taiwan-4 Crisis and Reality 3. “Crises do not develop overnight. They are rooted in
systemic issues that send out signals that most leaders ignore because of the prevailing
organizational culture. Since all organizations will experience a crisis at some point in time, they
need to know how they will respond to a crisis well before its onset.”
The event that ultimately led to the Taiwan-4 crisis occurred in August 2006, but the
underlying root causes did not receive any attention until well after June 2008, when the media
drew attention to the problems. A similar incident had taken place in August 2007 when a B-52
bomber was mistakenly loaded with six nuclear warheads and then flown from Minot Air Force
Base, North Dakota, to Barksdale Air Force Base, Louisiana. The B-52 was loaded with Advanced
Cruise Missiles (ACMs), part of a DoD effort to decommission 400 of the ACMs. The ACMs
should have been removed at Minot before being flown across the country to Barksdale. The
mistake was discovered upon landing at Barksdale and a full inventory of nuclear weapons was
quickly administered to ensure all nuclear weapons were accounted for (Hoffman, 2007). The
systemic ills leading up to these events had been chronicled in numerous reports and investigations
dating back to the Clinton administration at the Presidential and DoD levels (Spence, 1996).
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A report by the Defense Science Board (DSB) released in April 2008 on the unauthorized
movement of nuclear weapons to Taiwan provided further insight on the root cause of the crises.
In the aftermath of the Cold War, America's nuclear weapons were so neglected that they were
being stored alongside conventional missiles, with nothing but an 8 x 10 inch sheet of paper to
differentiate between the two (Defense Science Board Permanent Task Force on Nuclear Weapons
Surety, 2008). Despite the urgency underscored by such extreme circumstances, as Reality 3
suggests, other distractions inhibited immediate response to the burning platform.
It appears that during the Cold War Era, the nuclear community cultivated somewhat of a
unique culture, based on the special responsibilities and attributes of their weapon system
inventory. In the aftermath of the Cold War and the DoD’s shift in focusing on asymmetric/non-
conventional threats, to a large degree, the nuclear community’s primary focus was on readiness
and weapons system availability, an emphasis amplified by the reality of diminishing resources.
This shift in priorities led to “deficient supply chain processes and noncompliance with related
procedures which degraded control of sensitive missile components.” (Donald, 2008) What the
nuclear community failed to recognize was that their lack of supply chain compliance jeopardized
both readiness and weapons systems availability.
On August 12, 2008, Secretary Gates appointed General Norton Schwartz as Chief of Staff
of the Air Force. By appointing General Schwartz, Secretary Gates instantly impacted the fabric
and culture of the USAF, abandoning a tradition of choosing only bomber or fighter pilots to lead
the nation’s Air Force. General Schwartz brought a broader perspective to the vision/utility of
airpower along with a collaborative and inclusive working relationship with the other services. He
let it be known that the Air Force should no longer consider buying new multibillion-dollar tankers,
fighters and cargo planes as the service's top priority. Instead, he announced that reinvigorating
19
the nuclear enterprise would be top priority. In his first message to the nation and to Airmen
stationed worldwide, General Schwartz referenced the nuclear mission, saying “The bottom line
is we lost focus, and we're bringing that focus back.” (Randolph, 2008) He further commented,
“We have a lot of work to do, but we have a lot to be proud of as well.... In those areas where
others have found fault, we are going to work with a vengeance, and we will remain the world's
finest Air Force.”
Off and Running: The 748th SCMG applies CRLP to the ICBM Supply Chain Recovery
In 2008, shortly after news of the Taiwan crisis broke, the 748th SCMG dispatched four
USAF supply chain subject matter experts (SMEs) to the ICBM System Program Office (SPO) to
provide full time support in the recovery efforts. At that time the ICBM SPO held primary
responsibility for ICBM supply chain management. Steeped in the unique attributes of the nuclear
enterprise with decades of ICBM experience, this crack team of SMEs were ready, willing, and
able to tackle the deficient supply chain processes/procedures and provide a road map to recovery.
The directive and transactional leadership styles and hierarchical cultural barriers that
confronted this rescue team were real, active, and entrenched. Although several recommendations
for improvement and plans for recovery were offered, they were met with disbelief, dismissal, and
disapproval. The team was ultimately relegated to the sidelines. Fortunately this attempt to assist
did not go without merit. In May 2010, the 748th SCMG, 414th Supply Chain Management
Squadron (414 SCMS), was assigned responsibility for managing the ICBM weapons system
supply chain and NWRM assets. The knowledge and insight gained by the team in 2008 provided
invaluable preparation for applying the CRLM and CRLP to the 748th SCMG’s assumption of
responsibility in 2010. Additionally, a mandate by AFMC Commander General Hoffman to
improve supply chain management performance, postured the 748th for optimal response. All that
was left for execution was finding the right person to lead this recovery effort.
20
As the crisis moved forward, Major General McCoy was reassigned as the Commander of
the Air Force Global Logistics Support Center (AFGLSC) in November 2008. Recognizing that
leadership style matters, in 2009 General McCoy identified Colonel Reggie Hall to take command
of the 748th SCMG, a person he had worked with in the crisis response center during the Pentagon
9-11 crisis when both were assigned to the Headquarters USAF Air Staff. Although Colonel Hall
was unfamiliar with the nuclear enterprise and lacked supply chain experience, the
transformational leadership style he displayed in the 9-11 crisis response center appeared to be
well suited for the task of leading the 748th SCMG ICBM supply chain crisis recovery effort.
In June 2010, 11 months after Colonel Hall took command of the 748th and only a few
weeks after the 414 SCMS was assigned to his Group, AFMC conducted a Logistics Compliance
Assessment Program (LCAP) inspection at Hill AFB. The ICBM SPO and 414 SCMS were rated
“MARGINAL” with over 203 non-compliance findings noted, many of which were repeats of
previous issues. This was not the first time the SPO areas were rated sub-standard, as the 2010
results were the most recent in a series of less than stellar performances dating back several years
indicative of a culture with lesser concern for rules and adherence to procedures.
The Taiwan-4 Crisis and Principle 1. “Crisis management requires more time and resources
than initially perceived. Manage expectations early to facilitate stakeholder ownership. Acquire
additional resources and time to expand the required operating space.”
Immediately after the 2010 inspection team departed, Colonel Hall gathered the SME team
assigned to the 2008 ICBM SPO recovery effort along with other nuclear enterprise and supply
chain experts within 748th SCMG to craft the initial response to the inspection results for General
McCoy’s situational awareness. CRLP principle 1 was put into action. In addition to informing
General McCoy of the specific details of the situation at hand, the team also crafted a notification
to General Hoffman. Both pieces of correspondence were designed to achieve specific results to
facilitate the crisis action plan and optimize crisis response by informing General Hoffman of the
21
facts without soft pedaling the magnitude of the crisis. By doing so, the team made sure Hoffman’s
expectations were aligned with reality.
In essence, the 748th SCMG initial response created the time and space needed to execute
an optimal crisis response, cultivating internal and external stakeholder ownership as the
cornerstone foundation of the crisis response upon which all recovery efforts were aligned. By
gaining senior leader buy-in from the start, the team secured leadership support at the highest levels
creating a “we are all in this together and will do all we can to help you succeed” ethos to facilitate
full execution of the near-term crisis response plan as well as the long-term recovery campaign.
The Taiwan-4 Crisis and CRLP Principle 2. “Focusing on the PR distractions is misguided.
Focus the priority of effort to resolve the crisis. It is critical to communicate that a clear action
plan is being developed to deliver a successful crisis response. Don’t be tempted to declare victory
too early because it erodes credibility and prolongs the actual crisis.”
The second task Colonel Hall initiated after the team crafted the situational awareness
updates to Generals McCoy and Hoffman was the development of crisis action and crisis recovery
campaign plans. By doing so, the 748th SCMG recovery team used the time and operating space
created by the inspection correspondence to develop a robust and comprehensive crisis response
strategy and a well-documented recovery plan before making any proclamations of success. These
actions affirmed the team’s capability and capacity to execute an optimal crisis response and
shaped the stakeholder’s expectations reassuring them that all energy and efforts were being
focused on the crisis confirming that the right things were being done for successful crisis recovery
and positive progress would result.
The team developed the vision, mission, goals, objectives, performance measures and
metrics for the crisis recovery. The 748th SCMG’s vision was to be the best supply chain
management group in the DoD. The crisis response strategy and recovery plan mission, goals,
objectives, etc. were aligned to the vision, codified and communicated in the 748th SCMG
22
Campaign Plan. The strategic objective was to ensure that everyone in the 748th SCMG
understood the Group’s mission, vision, goals, and how their daily work contributions fit into the
overall achievement of group success. All of these strategy to action elements were replicated in
the 748th SCMG crisis recovery implementation/action plans and were central to the successful
crisis response providing a detailed road map for how and when crisis recovery would be achieved.
As the sequence of events unfolded over the two-year timeframe extending from the initial
discovery of the Taiwan-4 mis-shipment until the 748th SCMG’s assumption of responsibility in
May 2010, much of the external national/international media attention subsided. Other DoD,
national, and international crises took center stage. Although there were occasional references to
the events in the press, the focus of the media’s attention turned elsewhere. While the magnitude
and volume of the PR distraction was diminished, these distractions were not absent. The 748th
SCMG recovery team continued to be inundated on an almost daily basis with multiple distractions
in the form of numerous Office of the Secretary of Defense Review panels and special
investigations, USAF Air Staff inquiries and data requests, follow-up interviews, and other internal
DoD PR disruptions.
Despite these distractions, the 748th SCMG recovery team focused exclusively on the crisis
response effort as its number one priority. The cumulative effects of CRLP also coalesced to assist
with the residual elements of strategic communication and continued primacy of the recovery
focus. The additional resources obtained from the application of CRLP Principle 1 were swiftly
put to use and the team addressed a spectrum of issues including training and workforce
development, changes to policy and guidance, as well as improving tactics, techniques, and
procedures. The recovery and campaign plan goals, objectives and milestones were followed to
the letter and progress tracked and measured on a weekly basis. PR distracters were proactively
23
provided with immediate evidence confirming things were progressing according to plan and
senior leaders received periodic updates keeping them informed and engaged throughout the
recovery process boosting the team’s credibility by garnering stakeholder advocate endorsements.
So meticulous was the recovery team’s adherence to the crisis recovery action plan that
during the 365 day project schedule with over 500 hundred tasks, only one deliverable was missed
and that was only late by one day! The dogged determination and persistence in executing the plan
paid dividends in furthering the team’s ability to leverage the internal media scrutiny. The 748th
SCMG successfully co-opted the distracters into relaying observations with positive messages and
strategically communicating their crisis recovery action plan progress so as to restore stakeholder
confidence and support along the way.
The Taiwan-4 Crisis and CRLP Principle 3. “Culture plays a huge role in the development
and management of a crisis. Furthermore, leadership style matters – not all leaders are best
suited for handling a serious crisis. Therefore, organizations must ‘perceive, prepare, and
position’ for crisis response, by knowing the organization’s culture and leaders, and applying
CRLM based on crisis environment, organizational culture, and leadership style to select the
right leader for the crisis.”
The results of the August 2012 AFMC LCAP evaluation at Hill Air Force Base affirmed
effective CRLP execution and successful crisis recovery. The 414th SCMS earned an
EXCELLENT rating in the inspection. The inspection team also noted the remarkable cultural
change within the 414th. “A culture of excellence permeated the squadron, and their pride in
ownership was evident in every aspect of the organization”. The prevalent culture of excellence
in the 748th SCMG permeated through every aspect of 414th SCMS crisis recovery from planning
through execution. The success of the 414th crisis response and the ICBM supply chain crisis
recovery effort for the Taiwan-4 crisis confirms the link between knowing the organization’s
culture and selecting the right leader to guide the organization through the crisis, affirming the
validity of the CRLM and the application of the CRLP.
24
GETTING DOWN TO THE HEART OF THE MATTER – CRISIS MANAGEMENT IS
ALL ABOUT CULTURE AND LEADERSHIP
A serious crisis is not an event that happens overnight. Organizations’ leadership and
cultural dynamics set the conditions leading up to the event and these complex and deep-rooted
precursors manifest themselves in predictable patterns. Given the tools to recognize and respond
to these signals, organizations can prepare for the advent of crises before occurrence and posture
themselves for success by understanding the prevalent organizational culture and identifying the
right person to lead the organization through a crisis. The Crisis Response Leadership Principles
(CRLP) offer a framework and tools via the Crisis Response Leadership Matrix (CRLM) to aid
organizations in selecting the right leader for optimal response and recovery based on the most
effective leadership style for the given organizational culture and crisis dynamics.
The USAF’s response to the Taiwan-4 crisis along with the additional cited cases support
the notion that the events associated with serious crises are sequential, have cumulative effects,
and conventional organizational response practices lead organizations down an inevitable path
towards suboptimal crisis response and delayed recovery.
Understanding the crisis management realities and applying the CRLP Principles enables
organizations to successfully implement an optimal crisis response in the face of a serious crisis.
To effectively respond to such a crisis, organizations can prepare in advance by taking the
following actions:
1. Recognizing and understanding the organization’s current culture,
2. Continuously assessing the leadership styles of the members of the leadership team, and
3. Using the CRLM tool to select the best leader to respond to a specific crisis to successfully
guide the organization through crisis recovery by applying the CRLP.
25
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28
Table 1: The Crisis Response Leadership Matrix (CRLM)
Elitist Culture
Hierarchy Culture
Clan/Adhocracy
Internal
Crisis
Cognitive, Directive, or
Transformational
Directive, or
Transformational
Transformational
External
Crisis
Transformational
Transformational
Transformational
29
Table 2: Validating the CRLM with classic crisis management cases
Elitist Culture
Hierarchy Culture
Clan/Adhocracy
Internal
Crisis
New Coke
Goizueta: Cognitive,
Directive leader
Success
Penn State
Institution: Directive
leadership style
TBD
Tylenol (J&J)
Burke: Directive,
Transformational leader
Success
Taiwan-4
Director: Directive,
Transactional leader
(Unsuccessful)
Replaced
Hall: Transformational
leader
Success
Netflix
Hastings: Transformational
leader
Success
External
Crisis
BP
Hayward: Cognitive,
Directive leader
(Unsuccessful)
Replaced
Dudley: Transformational
leader
Success
Tylenol (J&J)
Burke: Directive,
Transformational leader
Success
Katrina
Brown: Transactional
leader (Unsuccessful)
Replaced
Allen: Directive,
Transformational leader
Success
Taiwan-4
Director: Directive,
Transactional leader
(Unsuccessful)
Replaced
Hall: Transformational
leader
Success
Transformational
