Leadership Research Summary:
• When facing a crisis, leaders’ sensemaking can take a considerable amount of time due to the need to develop consensus in how to deal with it so that vision formation and sensegiving can take place. However, research into emerging cognitive consensus when leaders deal with a crisis over time is lacking. This is limiting a detailed understanding of how organizations respond to crises.
• The findings, based on a longitudinal analysis of cognitive maps within three management teams at a single organization, highlight considerable individual differences in cognitive content when starting to make sense of a crisis. Evidence for an emerging viable prescriptive mental model for the future was found, but not so much in the management as a whole. Instead, the findings highlight increasing cognitive consensus based on similarities in objectives and cause–effect beliefs within well-defined management teams over time.
Leadership Research Implications and Findings:
When considering the main contributions emerging from our empirical study researchers highlight the following:
• First, prior longitudinal research on leaders’ cognition largely assumes consensus because evidence is drawn from organizational level documentary evidence (e.g. Barr et al., 1992). This approach has several weaknesses. It underplays the importance of sensemaking in individuals and ignores individual differences that can occur within teams of leaders. An understanding of cognitive diversity and consensus within the leadership is important for a deep understanding of organizational responses to disruptive change and crises. Given the findings, assuming consensus in leaders within firms may be regarded as an assumption too far.
• Second, the findings point to less cognitive diversity and more cognitive consensus within leaders as sensemaking occurs over time. Evidence for an emerging viable prescriptive mental model for the future was found but in a way not expected from a review of prior theory (Mumford et al., 2007) or empirical findings (Markóczy, 2001). Cognitive consensus occurred within well-defined leadership teams much more than within the leadership as a whole. The findings point to emerging cognitive sub-cultures of leadership when facing a crisis based on converging beliefs within leadership teams but different beliefs between leadership teams even in a single organization. The findings therefore lead to an additional hypothesis to be investigated by further research:
Hypothesis 2a: When responding to a crisis, cognitive consensus around a viable prescriptive mental model for the future will initially emerge within well-defined leadership teams.
• Third, we contribute data and analysis to compare with the theoretically grounded conceptual model presented by Mumford et al. (2007) for investigating leaders’ cognition under conditions of organizational crisis and change. The data did not attempt to test or address the complete conceptual model but the data allows some theoretical generalization by comparing our data with theory. The study’s findings focus on two parts of the conceptual model only; the activation of descriptive mental models and the development of a viable prescriptive mental model for the future.
• When the study comparedits findings to the conceptual model presented by Mumford et al. (2007) of particular significance is the considerable cognitive diversity within leaders as a whole when developing a viable prescriptive mental model for the future.
• Given the time lapse since the crisis first became apparent (well over 2 years before phase 2 of data collection) there were still considerable differences in beliefs in how to achieve success within the new competitive landscape. Considering that a number of successful changes had been implemented to deal with the crisis before stage 2 of the data collection, the study finds this lack of consensus surprising.
• The data implies that consensus over a viable prescriptive mental model occurs initially within teams of leaders but is problematic between teams and there is little cognitive consensus when considering the leadership as a whole. Another possible explanation for our findings is that the data needs to take an even longer-term perspective on the development of a prescriptive mental model within the leadership as a whole.
• When comparing the data with the discussion of the conceptual model presented by Mumford et al. (2007), the study confirms the importance of experiential and tacit knowledge to problem solving when making sense of new conditions and the development of a viable prescriptive mental model for the future.
• Of particular importance to the leaders in our case study organization was learning about new competitors, and the services they were offering, as well as the new reality of competitive tendering.. Experiential knowledge, based on both successes and failures in tendering for contracts, led to an improved tendering process. These improvements enabled the organization to obtain more new contracts and become more financially viable. An improved success rate in competitive tendering resulted in four new contracts equating to 30.8% of turnover following the original contract losses of 27.2% of turnover.
• Fourth, the findings also confirm that it was not the identification of the crisis or change that was problematic for the leaders but learning how to operate through trial and error in a new competitive landscape (see Barr et al., 1992). The two important issues of note are the increased significance of service quality and the importance of staff motivation.
• The focus on these two issues is consistent with some of the problems faced by the organization as a result of increased low price competition after government changes. The organization had to improve its service delivery to justify its higher prices.
• Fifth, the findings also confirm that studying the locus of consensus is particularly important when understanding sensemaking and an organizational response to change (Markóczy, 2001). Consensus is particularly important in leadership teams (Yammarino, Mumford, Connelly, & Dionne, 2010).
• In contrast to Markóczy (2001), however, we found emerging consensus in all leadership teams within the organization as the response to the crisis developed. This finding can be explained by the focus on a specific crisis in the current study. Markóczy (2001) found consensus within a specific interest group that benefited from change, but when in crisis the implications for any specific interest group is likely to be unclear. When responding to more benign and gradual change, an interest group is more likely to develop because they can see the benefits of change more clearly and this might explain the different findings in this case.