Resilience in Top Management Teams: Responding to crisis by focusing on the future

Abstract

When faced with a sudden economic crisis, top managers come under pressure to persist and recover, but such an ability to be resilient depends on the collective response of the top management team (TMT). In particular, we argue that attention towards the future, or future focus, within the TMT influences the organization's resilience in times of crisis. Drawing on a sample of insurance companies during the Global Financial Crisis (GFC), we mined earnings call transcripts to capture future focus for executives and aggregate this variable to the team level. Our results indicate that companies with TMTs high on average future focus, and companies with TMTs low on heterogeneity of future focus are more resilient - experiencing more moderate performance losses during the crisis and a swifter recovery after the crisis. With heightened attention on long-term effects of economic crises, we contribute to scholarship and practice by demonstrating that future focus within executive teams impacts their organization's resilience.