Prof Katherine Xin: Are women better at managing crises?

The role and influence of leaders on the regular operations of their organisations has been the topic of much research. But, when trouble strikes, are all leaders equally adept at guiding their ships through rough waters? CEIBS Professor Katherine Xin and colleagues from the Geneva School of Economics and Management and Ecole hôtelière de Lausanne (EHL) examine the significance of leaders’ founder status and gender on coping with crises.

The respective influences of founders and managers on day-to-day firm performance is a well-trodden area of debate. However, the true impact of founders during crisis scenarios – specifically how their personal traits affect their firms’ overall crisis response strategies – remains poorly understood. A recent study we have conducted addresses this gap, determining that a business leader’s founder status and, even more importantly, their gender, are key factors in influencing a firm’s crisis response strategy.

The findings of our study are built upon the analysis of 331 crisis response strategies enacted by founders and business leaders in China during the COVID-19 pandemic. 50% of the respondents were founders, while the remaining 50% were CEOs, VPs, or holders of other top executive positions. 32% of respondents were female, and 24% were female founders.

We found that while all business leaders perceived both challenges and opportunities arising from the COVID-19 pandemic, male founders perceived fewer challenges than their manager counterparts. They were also less likely to look towards internally focused business responses (such as strengthening tools for collaboration and teamwork, providing online training for employees, and monitoring their mental/physical health) when informing their firm’s crisis response strategy.

By contrast, female founders displayed a greater perception than their male counterparts for both the challenges and opportunities presented by the pandemic. They were also more likely to take both internal and externally focused actions (such as offering new products/services or investing in research and development).

In short, our findings suggest that female founders are more sensitive to their environment and situations affecting their firms, and thus more sensitive to both challenges and opportunities presented to them, especially during crisis situations. This outcome lends weight to the theory endorsed by many sections of the popular press throughout the pandemic, that female leaders may have qualities that make them better leaders during crises.

Given that China was the first country to experience the dangers and immediate fallout of the spreading virus, the responses we received from founders and other business leaders represent unique insights into the importance of personal characteristics and gender regarding crisis management. Unlike their counterparts in Europe, North and South America or elsewhere in Asia, leaders in China had no prior examples of best practices to inform their response to this ‘black swan’ event. While this undoubtedly made their task harder, it also makes their crisis responses uniquely unbiased by established conventional wisdom, since there was none to draw upon. This arguably enables a clearer view of the impact of founders’ personal traits (particularly gender) in influencing their crisis responses.

Our study contributes to crisis management by demonstrating that the personal characteristics of a firm’s founder (especially their gender) have a tangible impact on how they perceive and react to a crisis, and subsequently how they inform their firm’s crisis response strategy. It also contributes to research regarding how entrepreneurs in general respond to crises, by demonstrating that gender plays an important moderating role. Finally, it contributes to the prior work on the female leadership advantage by demonstrating that their founder status may be a key driver of this advantage.

Editor | Michael Thede

This article refers to a study entitled, “Founders, Females, and the COVID-19 Pandemic: Crisis Responses of Business Leaders,” by Robert Langan, Achim Schmitt and Katherine Xin.

Robert Langan is a post-doctoral researcher at the Geneva School of Economics and Management. Achim Schmitt is a Full Professor and Associate Dean of Graduate Programmes at Ecole hôtelière de Lausanne (EHL). Katherine Xin is Associate Dean (Europe), Director of the Hospitality EMBA (HEMBA) Programme and the Bayer Chair in Leadership at CEIBS.

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