Yahoo Finance Wharton dean explains a common mistake made after crises: 'Panic and neglect'
As the worst of the COVID-19 pandemic subsides, CEOs would be wise to reflect on how they reacted to that crisis and how they could do better. But Erika James, the dean of the Wharton School, the business school at the University of Pennsylvania, recently told Yahoo Finance that leaders often fail to learn from setbacks like the pandemic.
“We talk about this cycle called panic and neglect,” James told Yahoo Finance’s editor-in-chief during a recent episode of "Influencers with Andy Serwer." “So, what typically happens is, some threat happens, we panic, we respond, it's over. And then we neglect it until the next one happens.”
Last week, James published a book called “The Prepared Leader: Emerge from Any Crisis More Resilient Than Before,” which she co-wrote with Lynn Perry Wooten, president of Simmons College in Boston. The book offers guidance to leaders navigating major crises like the COVID-19 pandemic. It outlines five phases of crisis management including early warning, preparation and prevention, damage containment, recovery, and learning.
James says she felt inspired to write the book after the pandemic presented her with a litany of challenges when she first arrived at Wharton in 2020, having previously served as dean at Emory University Goizueta Business School and at the Darden School of Business at the University of Virginia.
“I started three months after COVID hit. I started here virtually; I moved into an apartment, was trying to run a school with people that I had never met and only ever seeing anyone on those small screens,” James said. “So, it was a lot of how do we transition from a residential academic experience to a virtual one then preparing our faculty at MIT preparing our content in different ways.”
In “The Prepared Leader,” James tells the story of former World Bank President Jim Yong Kim who observed that whenever civilization overcomes a pandemic, it simply relaxes and fails to prepare for the next one.
“What we don't pay attention to is the fact that the next one is always going to happen, it may be a different kind of crisis or threat or challenge, but something else is always going to happen that takes us by surprise,” James said.
In a 2021 blog post, experts at the Center for Global Development, a public policy think tank, said there is a 47%-57% chance of another global pandemic as deadly as COVID in the next 25 years.
Americans, meanwhile, show signs that they’re moving on from the pandemic. Though COVID-19 remains afoot, with a daily average of 51,259 new cases in the U.S., according to The New York Times, President Joe Biden recently declared the pandemic over. Meanwhile, over 50% of Americans say there is little to no risk in returning to their pre-COVID lives, according to a report released by Ipsos, a market research firm, this month.
“So, the preparation part is — what can we learn?” James reflected. “How should we establish our culture and our processes and our systems and our operations in a manner to avoid that experience going forward, but oftentimes, we don't take the opportunity to learn either from our own prior experiences, or from the experiences of others.”
James earned her B.A. in psychology from Pomona College and her M.A. and PHD in organizational psychology from the University of Michigan.
The Wharton School has 1,784 MBA students, and unlike many business schools, also has 2,617 undergraduates currently enrolled, according the university's website. The U.S. News & World Report currently ranks Wharton the No. 1 business school in the country, tied with the University of Chicago.
Dylan Croll is a reporter and researcher at Yahoo Finance. Follow him on Twitter at @CrollonPatrol.
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