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Podcast Mini Series: Episode One – Leadership In Times Of Crisis

In the first episode of our mini series designed to help our listeners during these challenging times, we interview Dr Catriona Wallace, named by the Australian Financial Review as Australia’s most influential woman in business and entrepreneurship. Dr Wallace is a much sought after speaker on leadership in times of crisis and last week Yahoo Finance published her article “Bushfires to Covid-19: What makes a good leader in a time of crisis?” She is a leading authority in Artificial Intelligence, Adjunct Professor of the Australian Graduate School of Management and Founder & Executive Director of fintech firm Flamingo.AI, the second only woman-led business to list on the Australian Securities Exchange.

PS – if you enjoyed this installment, you can catch Catriona’s episode: Tales from a female AI entrepreneur, capital raising, data bias, the ‘heroine’s journey’ and practical ways men can support here.

Dr Catriona Wallace

Dr Catriona Wallace has been recognised by the AFR as Australia’s Most Influential Woman in Business & Entrepreneurship. Based between the US and Australia, the Founder & Director of Artificial Intelligence company Flamingo Ai, Catriona ran the second only woman led business ever to list on the Australian Stock Exchange.

Catriona is an Adjunct Professor at the Australian Graduate School of Management and is one of the world’s most cited experts on Artificial Intelligence, Ethics and Women in Leadership. Interestingly, Catriona was once a police officer and … also owned a night club. Recently the Royal Institution of Australia recognised Catriona as the one of Australia’s pre-eminent scientists. Catriona, sits on the Board of

Responsible Technology Australia (Reset Tech), is a philanthropist, human rights activist and …. mother of five.

You can follow Catriona on Twitter @catrionawallace

Podcast Mini Series – Episode One Transcript

Julia: Hello, my name is Julia Streets and welcome to DiverCity Podcast. Talking about diversity and inclusion in the field of financial services. To say that we’re operating in extraordinary times is a massive understatement, and so we wanted to take a pause from our usual schedule to curate and create a mini series.

Before Christmas last year, you may remember the episode where I interviewed Dr. Catriona Wallace from her office in Sydney, Australia. We talked data, artificial intelligence, her experience as a CEO of the second only female-led business to list on the Australian Securities Exchange, and also the potential for disruptive technologies to address the global scale challenges.

At the time, we talked about the bushfires, that even back in November had taken hold to the extent that they’d burnt up much of Catriona’s family farm holding in New South Wales. Little then did we know how much worse the fires would become. I’ll let Catriona tell the story herself, and today, she’s a much in demand speaker talking about leadership in times of crisis, reflecting on leadership throughout the time of the ferocious bushfires, and setting out some of the lessons that must be applied today. Today, over Zoom, as I self isolate in London, it’s a huge pleasure to be joined by Dr. Catriona Wallace, also self isolating in Byron Bay.

Cat, welcome to the show. Thank you so much for joining us.

Catriona:  Hello Julia, and delighted to be with you today to talk about these important topics.

Julia: Thank you. It’s only right that you should tell this story about what happened in December and January. So tell us about the reality of the bushfires.

Catriona: The world’s in a state of crisis, but Australia arrived in a state of crisis I think much earlier than perhaps most other countries, and that was with the, what we call the summer of 2019 wildfires or bushfires, which started interestingly in September 2019, but really took hold around November, December, right through to February.

My personal experience with the fires was in November 2019. We have a family farm up in northern New South Wales, about 12,000 acres. This is where one of the largest fires started, and within a month had destroyed the entire farm, joined up with two and then three other fire fronts, and wiped out most of northern New South Wales. We lost our family property, and then on New Year’s Eve, actually we had another property in South Batemans Bay, which is on the south coast of New South Wales, a place called Rosedale Beach. And three fire fronts came through and destroyed the entire town within an hour, the whole town was wiped out.

We were lucky that we had learnt from the farm fires how to manage properties, and how to remove trees and fuel from around the house. We’d done that at Rosedale beach, so the house remained standing, although everything was burnt right up to the walls and the outside of the house. We had two instances then when we were, our family was affected by the fire. We were right in it and I became deeply embedded in the community, and then started to figure out how was this crisis led? What were the leader behaviours at the political, federal government and state government level? Were they effective? And if they weren’t, what else needed to happen?

Julia: You’ve talked about what this has meant for you and your family, can you just give us a sense of the enormity of this? Because obviously, we saw a lot of this all over the press, but how extreme was it?

Catriona: To put it in perspective, the fires burnt 46 million acres of land in Australia. So this is 22 times larger than the Amazon fires that burnt, I think it was 2017. During the fire season, which ran really from September until February 2020, 34 people were killed, 6,000 properties were destroyed. There were 1 billion+, we think closer to 2 billion animals killed, and the release of around over 300 million tonnes of carbon dioxide into the atmosphere. Then initially, there’s been an estimate economically of about $5 billion of damage to businesses. The economists again estimate that’ll be around $100 billion by the time the impact of the fires actually take their full effect over the next two years. So really catastrophic is the language that we used here in Australia.

Julia: When we think about the leadership during that time, and I know you think a lot about some of the behaviours and some of the attributes around leadership qualities, etc. I suppose a sensible starting point would be, how do you define crisis leadership? Then we’ll sort of take it from there, and sort of explore what that means in the world today.

Catriona: The best way to think about crisis leadership is a leader’s ability to minimise the impact before, during and after a crisis. The very interesting part about crisis leadership, it’s not really just as the crisis is on foot, it starts well before the crisis even arrives, and that can be up to several years before the crisis arrives. Within that minimising impact, of course, that is across economic, social, health, political, financial, all aspects of effect or impact that the crisis may have.

Julia: There’s also an element of interaction with people. A huge population that needs, and I think the next natural transition for that is thinking about leaders in their organisations today. Does within that definition also fall a duty of care to individuals, or does it tend to work on a much, much higher plane than that?

Catriona: It has to be from the individual level right up to the highest political government social level. The crisis leader needs to be able to work across all of those domains. The Crisis Leader’s slightly different to the Crisis Manager. The Crisis Manager’s role is actually to execute and deliver the operational factors that the Crisis Leader would initiate, so the two things are actually quite different. In the literature and in the business community, we actually talk a lot about crisis management, but not so much about crisis leadership.

What I did as a result of watching the leadership behaviour, and again, I have a PhD in leadership, and although my PhD is actually in computer technology and robots replacing human leaders, another discussion for another day, it made me very interested to do an analysis of what happened during the Australian bushfire crisis, to see how well these leaders performed. The human aspect of it is a massive part, we perhaps can think, and maybe we can talk, Julia, about who’s most effective at leading the humanity part of it. Also the environmental part of it, the societal part of it, is it the one leader? Does it take multiple leaders to really effectively manage during, before and after a crisis?

Julia: Obviously, winding on, and that’s not at all to move hastily off such an enormous crisis in Australia… Actually, just before we do that, I’d love your thoughts on how Australia is recovering from that, as we wind on 2/3 months later.

Catriona: We are recovering slowly, is the way I would describe it. There’s still plenty of people without homes who are underinsured, who weren’t insured. There are plenty of people still living in other friends’ and families’ houses. There will be people who are, by this stage, are living in caravans, or homeless, as a result.

The government, actually, through the various phases of crisis management, started to perform probably, in my opinion, only well in the recovery phase. They have actually done quite a good job at creating a stimulus package and putting in place logistics to help people who are still suffering. However, we were just starting to recover from the impact when of course, the COVID-19 crisis also hit Australia. We’ve been double hit with crises.

Julia: You talk about recovery as a particular phase. Presumably, therefore there are many others as well. Could you walk us through? I know you have a model around crisis leadership. Could you walk us through the various phases on that?

Catriona: There are five core phases in a crisis leadership model. The first one is around signal detection. This is the leader’s ability to detect signals as many as several years before a crisis is due to happen. For example, in the Australian bushfires, we had our fire commissioners coming two years prior to the summer of 2019 with reports to the government saying 2019 is going to be a very difficult year. We’re not prepared. We need to do things. Then again in April 2019, the fire commissioners came again. We had our indigenous leaders warning the government, and these signals were largely ignored.

Now in the signal detection phase, this is where the leader has to be very strong in managing interest groups and political agendas. In my opinion, it was a political agenda and interest groups that really derailed the government from effectively recognising signals and acting on them.

This would be ignoring the climate change movement and the signals they provided, and then perhaps being held accountable to strong interest groups. This could’ve been the mining sector, or the resource sector, or the anti-climate change factions, who would’ve had, I believe, a strong hold on government. The signals were ignored in that case, hence, we were in a much worse position to prevent and prepare for the crisis, which was the second phase.

In prevention and preparation, this is where, well ahead of the crisis, the leader should be starting to be recognising all the different scenarios that can play out. Data-driven critical thinking, modelling of scenarios, starting to engage and enrol all the various multi-stakeholders and multicultural stakeholders. When we talk about multicultural stakeholders in crisis leadership, we’re not necessarily talking about nationality, but the different cultures of different subgroups that maybe are part of managing through this crisis.

Prevention and preparation is the second phase. Third is damage control and containment, which is actually when the crisis is on foot, and how does the leader actually manage through that. Then the fourth phase is the recovery phase, and then the fifth phase is learning. If I go through those again, signal detection, preparation and prevention, damage control and containment, recovery, then learning.

Julia: That’s fantastic. Thank you so much for setting that all out incredibly clearly as well. As we roll up that further then into the reality of where we are today, right in the middle of coronavirus/COVID-19, a lot of our listeners are leaders in their organisations, thinking about… I suppose there are two parts to this really. One is that where in the cycle are we, as we are running our businesses today? Anything particular that you would reflect on in terms of what’s been happening in Australia that we should be paying attention to, particularly thinking of as leaders of organisations. And then we can get onto organisational structures and how we engage with employees as well.

Catriona: I definitely think our government will have learned a lot, and our leaders a lot, from perhaps not being great crisis leaders during the Australian bushfires. I think we now are in a better position with crisis leadership during the COVID-19. Although, I still think not an excellent position.

The same phases apply. The frames through which the crisis leader would be looking now in during COVID-19 or during the fires. Traditionally thinking crisis leadership, there’s four major frames that the leader would look through. One is a design frame, so how are they going to design solutions to get through this? Second is a political frame. Third is a cultural frame. Fourth is a human resource frame. Then I’ve put another frame on there based on my experience, which is an environmental frame.

All of this is happening, but of course, it’s happening through the frame of the environment. The fires, obviously, as a natural disaster fit in, but we could also argue that there’s environmental impacts, and signals, and also causes regarded to COVID-19.

Across those phases we talked about before, across those five frames, then become the very important thing. And what is the leader’s behaviour that is going to lead the entire community? Including business, government, society, generally teams, individuals through the crisis and into recovery and into learning. That’s the big question. Do we have leaders in Australia, in the UK, globally, who can actually have these behaviours and know what these behaviours are?

Julia: How does that translate into the corporate world? I look at my organisation and some of the signalling around COVID. Obviously, I couldn’t have signalled any better than anybody else, certainly not, that it was coming. But suddenly looking for early signals about the impacts for me, my team, and my clients. I’d love your thoughts on how you’re beginning to see some of this filter down into organisational life.

Catriona: You could almost have organisations and businesses as a microcosm of what’s happening at a high level, at a government and a societal level. I absolutely believe this. When I did an analysis of what are the traditional crisis leader behaviours, and I’m very happy to talk those through. What are the new behaviours that we’re seeing in this current contemporary environment, whether it’s fires or viruses, that leaders need to have? I think it’s almost exactly the same for business leaders to have these behaviours and attributes as it is our politicians and government, who are the ones theoretically leading us through this crisis.

There’s another argument that, we as business leaders, sometimes know that the governments also don’t really know how to do this well. This COVID-19 is certainly unprecedented on its scale and in its impact. It has a massive health impact and environmental and economic impact. We, the businesses, are the core basis of the economy, so we will be deeply affected by it, but also, we can use this model, I think, to help lead our ways out of it without relying necessarily on government to solve the problem.

Julia: Of course, our stakeholder groups in the middle, lobbying groups and industry associations, who straddle the world of business and leadership, and also the governments, of the politics and the policy element as well. You’ve mentioned about those behaviours, really intrigued to get into those. What are the classic behaviours that you see?

Catriona: I’ll run through a list of 12 traditional behaviours that were associated with crisis leaders, and then I’ll talk more about the ones that I believe are relevant today. Again, very important for all of us, and Julia, you running a business, me running a business, your listeners running businesses and leading businesses, to see which ones of these they feel might be relevant for their current situation and what might be useful for them to help lead their own team through this crisis.

Let’s start with the traditional ones. So traditional crisis leader behaviours include charisma, inspiration, strategic thinking, sadness and compassion, decisiveness, adaptability, directive leadership, extensive communications, facilitate collective action, can remain calm, make good use of teams, and can reduce obstacles. If you think about those, they even sort of feel a bit dated, right? Really, if we boil those down, you want a charismatic, inspirational, strategic thinking leader, who has some ability to show some compassion, and is probably a reasonable communicator and stays calm. That’s a traditional model of crisis leadership, which I think is entirely inadequate in today’s crisis, given that they are so extreme.

Let’s move forward into 2020 and talk about what, I believe from the analysis that I’ve done, would be the absolute behaviours and attributes that a leader needs to be an effective crisis leader. These include being an active signal detector, someone who’s able to sense either through data, or it can also be intuitive, I believe, that something is going to happen well ahead of its time, and is able to note those signals and start to analyse them, and be able to predict what or when a crisis may occur, and they start their crisis leadership even if it’s several years before from that point in time. Being an effective signal detector, absolutely critically important.

Second one, which we didn’t see written too much about in the literature around crisis leadership, is around political agenda management. That’s obvious when we talk about what’s happening perhaps in the US and how Donald Trump has responded to the COVID-19 crisis, where he was largely avoiding it, or ignoring it, or playing it down as a seasonal flu, until more recent times when it’s escalated. That would’ve been managing political agendas.

Then the third one is managing interest groups or interest group management. They are various interest groups that also end up having political power, who the leader needs to be able to manage. Now, if we think about it in the context of business, that may be a board with an agenda. It may be interest groups like investors who want the business or the leader to behave in a certain way, or be directed in a certain way that the leader may not think is in the best interests of the business, the staff, the clients and the financial management of the business, and all the other things a leader looks at.

There’s the first three: signal detector, political agenda management, and interest group management. The fourth one is data-driven critical thinking. Being able to scenario plan and model out what might come and critically analysing that, but using data. That’s absolutely, critical, and again, wasn’t really talked about in the traditional leadership models.

The fifth one is multicultural lens communicator. This is a leader who is able to understand and map out all of the different interest groups, cultural groups, this doesn’t necessarily, again, mean cultural racially or anything else. It’s actually the culture within a particular stakeholder group that will be involved in the crisis Perhaps that is, from a business perspective, your clients. What is the perspective of the clients? What is the culture of the clients? How are they feeling, what are they experiencing? And the leader being able to directly communicate to that group, which will be different to the employee group, different to the supplier group, different to the general market.

The sixth one is having values diverse input. McKinsey actually very interestingly writes that the crisis leader behaviours often are those associated with traditional women’s leadership behaviours, or the feminine archetype. This is around being very able to collaborate, have empathy, vision, transparency, critical thinkers and collective action, instigators. All of which are traditionally associated with female or feminine-type leadership, which is very interesting. In addition to perhaps agenda diversity, there also needs to be a values diversity. Not just having the leader dictate their own values, that it needs to have multiple values, and then multiple diverse groups inputting into the programme or plan that the leader has.

Seventh one is understanding human and environmental factors. Really understanding what is the impact that this is going to have on humans, right down to the individual level. As well as, what is the impact it’s going to have on the environment?

The eighth one is deep empathy, so I think that’s clear. Able to empathise, again, with those different stakeholder groups, and to do that in a vulnerable and a transparent way.

The ninth leader attribute or behaviour is vulnerability. What we’re really seeing here is the ability for the leader to admit mistakes and acknowledge mistakes, learn from mistakes, and then move on, and be vulnerable during that process.

Tenth one is knowledge of advanced technology, there’s a huge amount of technology that’s available now to be able to lead businesses or people through these crises. The crisis leader should be quite tech savvy and know how to access, not necessarily know how to use them themselves, but know how to access and apply these technologies.

There’s two more, the eleventh one is being adept at collective action. Collective action is the ability to mobilise different groups of people or systems collectively to respond to the crisis.

The 12th one is being a visionary, so having a vision to lead people out of the crisis into the new world. Interestingly enough, crisis itself means a new beginning, or an unveiling, or the ending, a decision point where something ends and something new begins. Often that something new is unknown. We don’t know what it’s going to be. Very much now with COVID-19, none of us know really when it’s going to finish or what is going to be unveiled on the other side. It’s the leader’s role to actually have a vision around that, regardless of the uncertainty.

Julia: Amazing list. This just leads me to so many questions. I suppose my first is, which do you believe are perhaps the most overlooked, and which are the ones which people classically seem to focus on and be quite good at?

Catriona: Let’s start with the ones that are classically good at, which would be leaders standing up and trying to show some strategic thinking about what might be the various scenarios that they could lead a business through. Because scenario planning and disasters and crisis, these are well-trodden paths for many organisations. The strategic thinking and strategic leadership is probably something leaders do reasonably well, or it’s a traditional model that they have become equipped in doing.

What I don’t think is done well is the political agenda management, the interest group management, the data-driven critical thinking, and also the application of advanced technologies. These are all, I think, newer aspects to a business leader that really are the ones to focus on, in addition to just the human aspects of empathy and vulnerability, and value of diversity. We could almost put those into more of the harder skills around data, technology, critical thinking and politics, and then the softer skills around empathy, vulnerability and diversity and inclusion. I’d say both of them are equally important.

Julia: I wonder to what degree leaders are thinking, “Well, actually, I’ll focus on the hard stuff and then I’ll bring people in around me to take care of the soft stuff.” Or vice versa, actually, or any of behaviours are going to say, “Well actually, I can’t do all of them. I can’t be good at all of them. So I’ll build a management team around me of people who are, who can fill the gaps necessary.”

What you’re saying is that actually, everybody should work on all of them, I wonder whether you are seeing an awareness that people are taking this stuff seriously and beginning to think very differently about the whole of their management leadership training, if you’d like, to make sure that they are suitably equipped for the next crisis.

Catriona: It’s a good question about whether a single leader can have all of these attributes, traditionally, we know that leaders tend to either fall into a tasks and results orientation, or a more humanistic orientation, or potentially a charismatic transformational type leader behaviours. Those would be, I think, the three main categories of leadership.

Now, it’s not necessary that an organisation has one leader who has all of these characteristics. I think ideally, they would, and we’d see people like Jacinda Ardern, the Prime Minister of New Zealand, who I believe is one of the most outstanding world leaders currently. I would say probably has a number of these 12 leader behaviours for crisis leaders, really, she’s quite adept at them. But I think it’s quite rare. There’s no reason why there can’t be more than one person in a leadership team who takes the crisis leadership role and actually plays to their skills and strengths.

But what the staff or the employees or the groups who are following these leaders must see that, let’s say it’s two leaders in this case. They must be completely aligned and no conflict whatsoever. The moment there’s conflict, that becomes quite a damaging role. Now then, we could extend that more. Could you have a leadership of two, three, four people who are doing these roles? Possibly, but again the moment that the staff detect any misalignment or conflict, then that starts to break down. Ideally is I believe, leaders, so whether it’s a chairperson or whether it’s a CEO or any of the executive leadership team, or coming down into a smaller team or middle management, I would really encourage leaders to start to aspire to being across all of these leader behaviours as the very best way to lead through it.

Julia: You talked there about the perception of the employees as they look above and are looking for leadership as well. I know that’s something else that you’ve also looked at. You mentioned in your earlier comments about the fires at Rosedale that took out the town where your family have a house. I know you were doing some research there about, from a community perspective, the community view on crisis leadership. As we think about employees and their response and their dynamics as we go through a period of change, what can we learn from that.

Catriona: Yes, I think there is absolute application of what we learnt about how the Rosedale residents were feeling, what they were experiencing and then what employees will be feeling and experiencing currently. If we look at some of those emotions, they were stress, heartbreak, anger, wanting leaders to show empathy, and looking for a visionary leader to lead them through the crisis. I think exactly what happened during the fire crisis will be relevant to employees now who are looking to their leaders to lead them out of these trying times.

I think it’s very important for the leader to acknowledge that these feelings will run deeply in their employees. Then have strategies to enable the employees to be able to work through those, which perhaps are not traditionally again, emotions that we have in business other than a time of crisis, where there’s extreme stress, financial stress, heartbreak and anger. These are the behaviours that leaders, good leaders will need to work with their employees, at team and individual levels, help them work through that until we’re on the other side.

Julia: I certainly think at the moment there’s a need to anticipate that if that’s not what people are feeling now, then certainly, as the virus takes hold and affects individuals and their families, and there may well be some resulting deaths, that in order to plan now for how they appropriately work with their employees and communicate their employees at that time.

Catriona: That’s right. So if it’s not yet the case in businesses, and some businesses have not yet been affected, but we know in some way, almost all businesses will be affected, whether it’s not through financially or through the economy, it will be through people who’ve had tragedy associated with this virus. Again, I would thoroughly recommend as part of the crisis leader model, that business leaders are starting to think about how they respond to employees. In many cases, this is going to be able to deal with these heightened emotions that the employees are experiencing now.

Julia: I can’t believe how time disappears on this podcast. I could sit and talk to you for a long time about all of this. We have unfortunately to wrap up. I suppose my final question to you would be final words of advice, and considering these are plans that leaders should be putting into place for their organisations at the moment. Any final thoughts about what listeners should really be paying attention to right now?

Catriona: Yes. I think this crisis leadership style attributes, behaviours and models will become the norm. That’s what I think. Whether it’s fires, whether it’s a virus, whether it’s floods, whether it’s economics. We’re obviously going to go into a very difficult time economically for the whole world. So whether it goes into a recession or depression, it’s highly likely, and this is another level of crisis. My great messaging here would be for leaders listening to this podcast, really to start to think about what role can they play, how can they develop crisis leadership behaviours, so that they are the ones that rise to the top. They are the ones that lead their people through this, because as far as we’re all aware, it’s going to get a lot worse before it gets a lot better, and it won’t be the last crisis that we face. So we tended only to think about crisis leadership when crisis came. I think crisis leadership now has to be just a standard leader behaviour that all of us learn to become adept at.

Julia: Catriona, it’s been wonderful to hear your perspective, not only personally throughout the bushfires and what that’s meant for you and your family, but also your research, your findings, your analysis, and to share that with us today has been incredibly generous. I just want to take a moment on behalf of all the listeners and just to say thank you. Thank you so much for being on the show.

Catriona: It’s such a pleasure, Julia, anytime.

Julia: And to all our listeners at DiverCity Podcast, thank you for listening.

Kieron: This episode of the DiverCity Podcast was produced by me, Kieron Yates, on behalf of Julia Streets Productions. You can find out more about the guests on this week’s show on our website, Whilst you are there, you can also sign up to our newsletter for all our latest updates.

To be sure of catching all our future podcasts, subscribe to our feed on iTunes, or your favourite podcast app. And, if you’ve enjoyed this episode DiverCity Podcast, remember to give us a rating or review. This all helps promote the show to a wider audience. Finally, our Twitter handle is @divercitypod. Thanks for listening.