Navigating Crisis

                                         Navigating Crisis

How Collective Sense-Making Redefines Purpose in Uncertain Times

The nature of crises - Why traditional leadership fails

Crises, whether political upheavals, economic downturns or global disruptions, do not follow predictable patterns. Unlike stable environments, where purpose remains relatively fixed, crises demand continuous reinterpretation of priorities. Leaders who rely solely on a fixed vision often struggle because teams do not need distant goals during instability, they need clarity, containment and a way to make sense of evolving realities.

Instead of imposing certainty, leaders must help teams process and interpret the unfolding situation. Gianpiero Petriglieri’s (INSEAD) work emphasizes leadership narratives and the need for sense-making in crisis rather than imposing rigid directives. In Systemic Team Coaching (Hawkins), leaders engage teams in continuous dialogue, allowing them to reshape purpose collectively, rather than passively following outdated directives.

Case study, BP and the Gulf Oil spill - A leadership failure and success

A striking example of crisis leadership, both failed and successful, comes from BP’s handling of the Gulf of Mexico oil spill in 2010. When disaster struck, BP’s top executives initially relied on positive messaging, assuring employees that the company would recover and that operations would resume as usual. However, many employees felt alienated by this approach, it ignored the immediate crisis and lacked emotional containment.

Meanwhile, mid-level managers adopted a different strategy, instead of empty reassurances, they directly involved employees in problem-solving. They acknowledged distress, interpreted the crisis realistically and encouraged teams to take ownership of cleanup efforts. The difference, the executives’ leadership narratives alienated employees, while managers who co-created solutions built trust and resilience. Those teams that engaged in sense-making together remained committed, others disengaged or left.

This illustrates a crucial lesson, purpose in crisis is not declared, it is discovered through collaborative adaptation.

How economic and political uncertainty shapes purpose today

During times of economic volatility and shifting political landscapes, organizations and leaders are forced to redefine purpose dynamically rather than adhere to outdated strategic visions. Systemic Team Coaching (Hawkins) emphasizes that teams operate within interconnected systems, meaning that economic downturns, leadership changes, trade instability and even global political disruptions directly impact how teams perceive their mission, values and future direction.

A systemic approach to adaptive leadership in crisis

Traditional leadership frameworks often assume a linear path to success, organizations set long-term goals, align resources and execute plans accordingly. However, systemic coaching recognizes that teams are embedded within complex, unpredictable environments, where feedback loops, shifting alliances and socio-economic disruptions continuously reshape what is possible.

To effectively navigate crisis, leaders must adopt a multi-layered approach that accounts for

• External Systemic Forces
  Macroeconomic shifts, political elections, regulatory changes and global events that challenge stability.

• Internal Adaptive Mechanisms
  Organizational culture, team resilience and leadership’s ability to co-create meaning during uncertainty.

• Real-Time Sense-Making
  A willingness to challenge outdated assumptions, pivot strategies and reframe purpose collectively to align with emerging realities.

Leaders who neglect these systemic forces risk pushing teams into rigid, disengaging structures that no longer serve their evolving needs. However, those who embrace systemic adaptability foster long-term resilience, turning crises into opportunities for reinvention and innovation.

Illustration - How LEGO reinvented its purpose amid crisis

In the early 2000s, LEGO faced a financial crisis that nearly led to its collapse. The company had expanded aggressively into theme parks, video games, and merchandise, but these ventures stretched resources too thin and diluted LEGO’s core identity. By 2003, LEGO was losing money rapidly, and its leadership faced a critical decision: either continue expanding or refocus on its core strengths.

Instead of reacting with drastic cost-cutting, LEGO’s leadership engaged employees, designers, and customers in collective sense-making. They redefined priorities, shifting focus back to high-quality brick sets, innovation in design, and deep engagement with their fan community.

LEGO’s leadership listened to internal and external feedback loops, recognizing that their purpose wasn’t just selling toys. It was fostering creativity and imagination. They pivoted toward co-creation, launching initiatives like LEGO Ideas, where fans could submit designs for new sets. This collaborative approach not only revitalized the brand but also strengthened customer loyalty.

By embracing systemic adaptability, LEGO turned crisis into an opportunity for reinvention. Within a few years, the company returned to profitability, proving that purpose in crisis isn’t about rigid strategies, it’s about evolving with the needs of the system.

This case highlights how systemic leadership fosters adaptability, not by enforcing top-down directives, but by co-creating purpose with teams and customers in response to evolving realities.

While adaptive leadership and collective sense-making are essential during crises, external uncertainty does more than challenge strategic direction, it fundamentally reshapes the psychological, social, and cognitive dynamics within teams. Leaders must not only pivot organizational purpose but also recognize the underlying forces that influence how individuals and teams respond to instability. Three key factors: psychological impact, societal movements, and cognitive biases, play a crucial role in shaping how purpose evolves in uncertain environments.

Three crucial factors that shape purpose in crisis

1. Psychological impact on teams

Crises do not just change market conditions, they also alter team dynamics and emotional engagement. When uncertainty persists, employees may experience,

• Crisis fatigue
  Continuous exposure to instability can lead to disengagement or burnout.

• Loss of trust
  When leadership fails to address uncertainty transparently, employees lose confidence.

• Reduced psychological safety
  Fear-based decision-making prevents open communication and innovation.

Systemic Team Coaching emphasizes holding environments, where leaders contain anxiety and foster collaborative sense-making. By validating concerns and co-creating solutions, leaders build resilience instead of fear-driven compliance.

2. The role of social movements and public sentiment

In today’s world, purpose is not just defined by internal strategy, it is influenced by societal movements. Economic and political uncertainty often coincides with public demands for ethical leadership, sustainability and inclusion.

For instance, companies facing economic crises while navigating ESG (Environmental, Social, Governance) pressures must rethink their approach. Systemic leadership means understanding how social movements act as external systemic forces, shaping organizational purpose beyond financial objectives.

3. Cognitive biases in crisis decision-making

Crisis leadership is susceptible to psychological distortions, confirmation bias, loss aversion, and fear of walking away from failing strategies, which can hinder adaptive thinking.

• Leaders may cling to failing strategies rather than pivot.

• Fear of loss may drive short-term decisions at the cost of long-term sustainability.

• Teams may struggle to detach from outdated narratives instead of evolving their collective purpose.

The solution, systemic leaders cultivate awareness of biases, encouraging sense-making dialogues that challenge assumptions and promote flexible thinking.

Sense-making Leadership in Crisis – Adapting for the Future

In times of global uncertainty, leadership must move beyond static vision-setting and embrace fluid, co-created purpose. Systemic Team Coaching reminds us that organizations do not operate in isolation, they exist within interconnected social, economic and political landscapes that constantly challenge their foundations.

Instead of asking, ‘How do we maintain stability?’, leaders must now ask:

• What systemic forces are shaping our industry, and how must our purpose evolve?

• Where are the feedback loops in our organization, and are we listening?

• How can teams take ownership of collective sense-making?

The future of leadership is not about control, it is about adaptability. Those who can reframe uncertainty as an opportunity for systemic learning, rather than as a threat, will lead organizations that not only survive crisis but emerge more innovative and resilient.

Sources

- Petriglieri, G. (2020). The Psychology Behind Effective Crisis Leadership. Harvard Business Review. (HBR)

- Petriglieri, J. (2010). Leadership Responses to BP’s Gulf Oil Spill Crisis. INSEAD Business School Case Study.