Key Takeaways
- Stakeholders form durable judgments about a CEO’s competence within the first 24 to 48 hours of a crisis, typically before the leadership team has complete facts.
- PwC’s Global Crisis and Resilience Survey 2023 found that 89% of business leaders rank resilience among their top strategic priorities and 70% are confident in their ability to respond to disruption — but that too many organizations lack the foundational elements of resilience required to succeed.
- The same survey found that 57% of organizations name upskilling future leaders as one of their three most important elements of future-proofing resilience, while 31% cite building a team with the right skills as a major obstacle to establishing a resilience program.
- Erika H. James and Lynn Perry Wooten identify five phases of crisis management in The Prepared Leader (Wharton School Press, 2022): signal detection, preparation and prevention, damage containment, business recovery, and learning and reflection.
- Johnson & Johnson’s 1982 Tylenol recall and Boeing’s 2018–2019 737 MAX response are the standard contrasting cases for first-48-hours decision-making.
- Skyline Group International (Skyline G) develops crisis-ready senior leaders through executive coaching, the Skyline 360 assessment, and the C4X coaching platform.
What is Crisis Leadership?
Crisis leadership is the discipline of detecting, containing, and recovering from organizational disruption while preserving stakeholder trust. It differs from crisis management in scope: crisis management handles the operational response, while crisis leadership governs the decisions, communication, and accountability that determine whether an organization emerges from disruption stronger or weaker than before.
The Operating Environment as of August 2026
The Strait of Hormuz has been effectively closed or severely restricted since late February 2026, and the disruption is ongoing as of this writing.
The Congressional Research Service reported in early August 2026 that Iranian attacks on shipping and retaliatory U.S. strikes have severely disrupted traffic through the Strait for most of the preceding five months.
The Federal Reserve Bank of Dallas has modeled a complete cessation of Gulf oil exports as removing close to 20 percent of global oil supplies from the market, with roughly 80 percent of that volume normally shipped to Asia.
**The International Energy Agency **has characterized the disruption as the largest in the history of the global oil market.
Energy importers are absorbing real shocks, insurance premiums on affected shipping lanes have moved by multiples, and supply chains rerouting around the Cape of Good Hope are carrying ten to fourteen additional days of inventory in transit.
Which means the executives reading this are in one of three positions: managing a crisis, recovering from one, or underestimating how close the next one is.
How Prepared Are Companies for a Crisis?
Less prepared than their own confidence suggests — and the shortfall is specifically a leadership shortfall.
The Preparedness Gap Nobody Wants to Admit To
PwC’s Global Crisis and Resilience Survey 2023, drawn from 1,812 respondents representing 42 countries and fielded between September and November 2022, found that 89% of business leaders rank resilience among their most important strategic organizational priorities, and 70% express confidence in their organization’s ability to respond to disruption.
PwC’s own reading of that data is blunt: too many organizations are lacking the foundational elements of resilience they need to be successful. Confidence is running ahead of capability.
The survey is specific about where the shortfall sits. PwC identifies three requirements for a functioning resilience program:
- executive sponsorship from the C-suite
- a senior leader with clear responsibility for the program
- and a skilled team to drive it across the organization
Against that standard, 31% of respondents named building a team with the right skills as a major challenge in establishing a resilience program — while 57% cited upskilling future leaders as one of their three most important elements of future-proofing resilience.
Read those two findings together and the conclusion is uncomfortable. A majority of organizations already understand that developing leaders is resilience infrastructure. Roughly a third cannot assemble the people to do it.
The frequency data removes any argument that this is a low-probability problem. Nine in ten organizations reported experiencing at least one significant disruption beyond the COVID-19 pandemic, averaging three and a half disruptions over two years, and 76% said their most serious disruption had a medium-to-high impact on operations.
For historical context, PwC’s earlier Global Crisis Survey — the first in the series, published in 2019 and covering 2,084 senior executives across 43 countries — found that 29% of companies had no staff dedicated to crisis preparedness or response at all - in roughly a third of organizations structural crisis preparedness was simply absent.
Crisis leadership is not a capability you discover in the moment. You build it in advance or you improvise at the worst possible time.
Why Do the First 48 Hours of a Crisis Matter So Much?
Because stakeholders do not wait for complete information before forming judgments, and those judgments are expensive to reverse.
In our executive coaching engagements at Skyline G, we consistently observe the same compression: employees decide within a day or two whether leadership is competent and honest. Customers decide whether the company remains trustworthy. Journalists settle on a story frame. Investors decide whether to hold or sell. Once those positions harden, months of correct operational response will not fully undo them. Mapping who those stakeholders are before a crisis is its own discipline, covered in The Stakeholder Matrix: A CEO’s Guide to Stakeholder Management.
James and Wooten make a related argument from two decades of academic research: leaders who treat containment as the entirety of crisis leadership are working with a truncated model. The phases before and after containment do more to determine the outcome than the containment itself.
What Are the Five Phases of Crisis Leadership?
Erika H. James, Dean of The Wharton School of the University of Pennsylvania, and Lynn Perry Wooten, President of Simmons University, set out a five-phase model in The Prepared Leader: Emerge from Any Crisis More Resilient Than Before (Wharton School Press, September 2022).
Both authors assumed their current roles on July 1, 2020, and draw on more than 25 years of combined research into natural disasters, product failures, financial shocks, and slow-developing “smoldering” crises.
Phase 1: Signal Detection
Signal detection is the phase in which leaders identify weak indicators that a crisis may be forming. James and Wooten associate this phase with sense-making and perspective-taking: asking whether an anomaly could, under any circumstances, develop into a serious problem, and what could be done about it now. It depends on having diverse voices and information sources, because homogeneous input systematically misses signals. This is the same mechanism we examine in The CEO’s Dilemma: Why Executive Isolation Is Your Biggest Strategic Risk — isolation narrows the information a leader receives, and echo chambers convert that narrowing into strategic blind spots.
Phase 2: Preparation and Prevention
Preparation and prevention is the phase in which leaders act to stop a crisis from occurring or to limit its eventual impact. James and Wooten link success in this phase to a leader’s influence within their teams, the organization’s agility, and creative problem-solving. Influence here is built on trust and transparency established long before the crisis.
Phase 3: Damage Containment
Damage containment is the phase in which leaders limit the spread of harm to people, operations, and reputation. This is the phase most organizations equate with crisis leadership, and the only one many plan for. It is where the first 48 hours are spent.
Phase 4: Business Recovery
Business recovery is the phase in which leaders restore operations and rebuild stakeholder confidence. Recovery is measured not only in restored revenue but in restored trust, and the two do not recover on the same timeline.
Phase 5: Learning and Reflection
Learning and reflection is the phase in which leaders examine what the response revealed about the organization’s readiness. James and Wooten argue this phase is where resilience is actually built — and it is the phase most commonly skipped. It is not a blame exercise. It is an honest audit of the gap between the plan and the performance.
What Does Good Crisis Leadership Look Like?
Business schools still teach Johnson & Johnson’s response to the 1982 Tylenol poisonings more than forty years later, because the decision structure holds up.
Seven people died after an unknown party tampered with Tylenol capsules on retail shelves. J&J had not caused the crisis and had substantial legal incentive to minimize it. CEO James Burke chose the opposite path. He pulled every bottle of Tylenol from shelves nationwide at a cost exceeding $100 million, before any regulator required it, and communicated directly and frequently with the public rather than routing everything through counsel.
Tylenol’s market share had collapsed to near zero. It recovered within roughly a year. The decision to accept a certain, large, short-term cost in exchange for preserved trust remains the reference standard for first-48-hours judgment.
What Does Failed Crisis Leadership Look Like?
Boeing’s response to the 737 MAX crisis is the instructive inverse.
After two fatal crashes — Lion Air Flight 610 in October 2018 and Ethiopian Airlines Flight 302 in March 2019 — both linked to the Maneuvering Characteristics Augmentation System (MCAS), then-CEO Dennis Muilenburg publicly defended the aircraft’s safety before investigations concluded. Internal messages later disclosed that Boeing engineers had raised concerns about MCAS well before either crash.
Neither the company’s credibility nor Muilenburg’s tenure survived the gap between what leadership said publicly and what employees already knew internally.
The lesson is not that Boeing lacked capable people or good intentions. It is that attempting to control the narrative in the first hours proved far more expensive than early transparency would have been.
How Do You Build a First-48-Hours Playbook?
Five structural decisions separate prepared leaders from improvising ones. These reflect what we see work across Skyline G’s executive coaching engagements with CEOs and C-suite leaders.
Set up a crisis team before you need one
A small group of typically five to seven people drawn from legal, communications, operations, and the executive team, with pre-granted authority to act, outperforms a team assembled under pressure.
The constraint that matters is not size but pre-authorization: a team that has to ask permission is not a crisis team.
Set communication cadence in advance.
Decide how often you will communicate before a crisis happens. Silence in the first hours does not read as caution to stakeholders. It reads as absence.
Agreeing beforehand on how often you will issue internal and external updates, including updates whose content is “here is what we do not yet know”, keeps you ahead of the narrative rather than reacting to it.
Separate the CEO’s two roles.
In a major crisis the CEO is simultaneously the final decision-maker and the public face of the organization.
Under pressure these are different jobs with different rhythms.
Deciding in advance who occupies each seat, and who else is authorized to speak, removes the bottleneck that forms when every decision and every statement routes through one person.
Build a strong relationship with your board before a crisis happens, not during it
A board learning about a crisis in the middle of it will scrutinize your decisions.
A board that already understands your risk posture and crisis plans becomes a resource rather than another constituency to manage.
Plan for phase five.
Most organizations stop at recovery.
Build the learning-and-reflection phase into the plan itself, with a named owner and a date, or it will not happen.
Frequently Asked Questions
What is crisis leadership?
Crisis leadership is the discipline of detecting, containing, and recovering from organizational disruption while preserving stakeholder trust. It encompasses the phases before and after the crisis event itself, not only the response.
What are the five phases of crisis leadership?
Erika H. James and Lynn Perry Wooten identify five phases in The Prepared Leader: signal detection, preparation and prevention, damage containment, business recovery, and learning and reflection.
Why are the first 48 hours of a crisis critical?
Employees, customers, journalists, and investors form durable judgments about leadership competence and honesty within the first 24 to 48 hours, generally before complete facts are available. Those judgments are difficult and expensive to reverse afterward.
How prepared are organizations for a crisis?
PwC’s Global Crisis and Resilience Survey 2023 found that 89% of business leaders rank resilience among their top strategic priorities and 70% are confident in their ability to respond, but that too many organizations lack the foundational elements of resilience needed to succeed. 31% cited building a team with the right skills as a major challenge in establishing a resilience program.
Who should lead crisis response — the CEO or someone else?
Both roles are required. The CEO typically holds final decision authority, but designating a separate public spokesperson prevents the bottleneck that forms when every decision and every statement routes through one person. The allocation should be decided before a crisis, not during one.
What made Johnson & Johnson’s Tylenol response effective?
CEO James Burke ordered a nationwide recall costing more than $100 million before regulators required it, and communicated directly with the public rather than through legal channels. Market share recovered within approximately a year.
The Real Test: Assess your leadership team’s crisis readiness
Crisis leadership is not composure on camera. It is the quality of the decisions made in the first 48 hours of crisis, when the information is incomplete and the consequences are not. The leaders whose organizations survive with stakeholder trust intact are the ones who treated preparation as real work — before the crisis had a name.
The Skyline G Readiness & ROI Scorecard is a free five-minute diagnostic that assesses how prepared your leadership team is before the next disruption arrives: Skyline G Readiness & ROI Scorecard
Where Skyline G Fits
Skyline Group International (Skyline G) is a provider of scalable leadership development solutions, built on decades of executive coaching with leaders at companies including Apple, Cisco, Google, Johnson & Johnson, LinkedIn, Microsoft, and Netflix. Founded in 2001, Skyline G works with more than 120 certified coaches worldwide.
PwC’s finding that 57% of organizations rank upskilling future leaders among their top three elements of future-proofing resilience, while 31% cannot build a team with the right skills, describes a development problem rather than a planning problem. Crisis readiness is a leadership capability, not a document — which means it is built the way other leadership capabilities are built: through assessment, targeted coaching, and measurement.
- Skyline G executive coaching engages CEOs and senior leaders in six-to-nine-month partnerships focused on the specific competencies their role and context demand — including the decision-making, influence, and communication capabilities the five-phase model depends on.
- The Skyline 360 assessment gathers structured feedback from managers, peers, direct reports, and cross-functional partners, surfacing the blind spots that signal detection depends on catching. Homogeneous feedback loops are how weak signals get missed.
- The Skyline G coaching platform combines integrated assessment, content, metrics, and coach management with one-to-one coaching, allowing organizations to build crisis-capable leadership consistently across every level rather than only at the top. Structured leadership development programs extend the same capability below the C-suite, where most signal detection actually happens.
About the Author
Written by Milo Sindell, MS
President, Coaching Scaled, Skyline Group International
Milo Sindell, MS is President, Coaching Scaled at Skyline Group International, where he leads the strategic direction of the firm and the growth of its scaled coaching platform. He previously served as Director and Executive Consultant at Kenexa (now IBM) following its acquisition of Hit The Ground Running, the employee performance software company he founded, and held consulting roles at Sun Microsystems and Intel. He holds a Master of Science in Organization Development from Pepperdine’s Graziadio Business School. He is the co-author of four books on leadership and employee engagement, including Hidden Strengths: Unleashing the Crucial Leadership Skills You Already Have (Berrett-Koehler, 2015).
About the Reviewer
Reviewed by Thuy Sindell, PhD
President, Coaching Division, Skyline Group International
Thuy Sindell, PhD is President of the Coaching Division at Skyline Group International, leading a team of more than 120 coaches worldwide. She has been an executive coach since 1998, working primarily with CEOs and C-suite leaders on scaling organizations and driving growth. She holds a B.A. in Psychology from UCLA and an M.A. and Ph.D. in Organizational Psychology from Alliant International University, and is the co-author of four books including Hidden Strengths. She has been featured in Business Week, CNN, Forbes, Fortune, Investor’s Business Daily, NBC, and The Washington Post. She reviewed this article for accuracy on August 20, 2026.
Sources
PwC, Global Crisis and Resilience Survey 2023: The Resilience Revolution (March 2023). https://www.pwc.com/gx/en/issues/crisis-solutions/global-crisis-survey.html
PwC, Global Crisis Survey (2019).
https://www.pwc.com/ee/et/publications/pub/pwc-global-crisis-survey-2019.pdf
Erika H. James and Lynn Perry Wooten, The Prepared Leader: Emerge from Any Crisis More Resilient Than Before, Wharton School Press (September 2022).
https://executiveeducation.wharton.upenn.edu/thought-leadership/wharton-at-work/2022/10/the-prepared-leader/
Congressional Research Service, The Strait of Hormuz: Security Developments and Impacts on Oil, Gas, and Other Commodities, R45281 (updated August 2026).
https://www.congress.gov/crs-product/R45281
Federal Reserve Bank of Dallas, What the Closure of the Strait of Hormuz Means for the Global Economy (March 2026).
https://www.dallasfed.org/research/economics/2026/0320
