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Crisis Management

The best leaders operate from a basis of planning and prevention bolstered by the agility and responsiveness that allows them to capitalize on unforeseen events and effectively manage crises. This combination of vision, preparedness and resilience fosters confidence in followers, in customers and (if applicable) among shareholders.

Photo by János Pálinkás, Flickr

According to Pearson and Clair, in their paper on Reframing Crisis Management,

“An organizational crisis is a low-probability, high-impact event that threatens the viability of the organization and is characterized by ambiguity of cause, effect, and means of resolution, as well as by a belief that decisions must be made swiftly.”

In other words, organizational crises are typically isolated incidents, not common occurrences. In some organizations, however, certain individuals get caught up in the adrenaline rush of sweeping in to save the day at the last minute. When those individuals are leaders, they may create an environment of continual crisis that eventually erodes confidence and causes burnout. While the occasional successfully handled crisis can generate excitement and enthusiasm (who doesn’t love triumph?), a steady diet of fire-fighting, damage control and heightened anxiety is corrosive and exhausting.

If your organization seems to be in a constant state of high alert, you may need more than faster and better trouble-shooters. Rather, you may need to step back and examine the way people are leading and why everything seems to be in a state of perpetual calamity. A good place to start is with a better understanding of crisis management.

Was That Crisis Avoidable?

Crises fall into two categories, avoidable crises triggered by forces beyond management’s control, and homegrown crises that develop due to poor planning, ineffective monitoring or missed signals. Reducing the frequency of crises that management creates (or allows to happen) is the topic of a previous blog: Time Management or Attention Management. The aim of more traditional crisis management is to put systems in place that reduce the likelihood and/or impact of a crisis triggered by events over which management has little or no control. This approach to crisis management involves a form of crisis thinking and risk mitigation that can be distilled into a defined process.

Crisis Management Phases

Erika Hayes James, an organizational psychologist at the University of Virginia’s Darden Graduate School of Business, identifies five phases of crisis that require specific crisis leadership competencies.[1]

  1. Signal detection: Enhance management’s awareness of internal and external signals that might hint at an impending crisis. Activities for developing these skills include retroactive sense-making (reviewing past events and identifying signals and indicators that might have been missed at the time) and exercises that strengthen empathy and the ability to view things from alternate perspectives.
  2. Preparation and prevention: Once management is adept at identifying internal and external signals of impending crisis they sketch out potential crisis scenarios based on signals identified information gathered and develop strategies for dealing with them should they emerge.
  3. Containment and damage control: When a crisis hits, the first order of business is to limit the damage it causes. Potential threats could be reputational, financial or safety related. At this stage (the most intense), all hands are on deck and focused on bringing the crisis to an end as quickly as possible. Effective communications are critical to limiting both negative publicity and internal anxiety.
  4. Business recovery: Crisis management plans should include strategies for ensuring the ongoing operation of the organization through the crisis if possible. The better prepared management is to handle a crisis the more quickly things will get back to “business as usual.”
  5. Learning: There are learning opportunities in every crisis. Once catastrophe is averted, the best leaders take time to capture lessons learned and build them into the organization’s systems, routines and behaviors going forward, continually improving their capacity to handle future challenges.

Crisis Communications

In today’s environment of instant information, a significant component of containment and damage control efforts in any crisis will likely be directed toward rapid response communications and social media management. In effect, crisis communication has become a sub-discipline of crisis management, as the following excerpt illustrates.

The 10 Steps of Crisis Communications[2]

  1. Anticipate crises.
  2. Identify your crisis communications team.
  3. Identify spokesperson(s).
  4. Train spokesperson(s).
  5. Establish notification and monitoring systems.
  6. Identify and know your stakeholders.
  7. Develop holding statements.
  8. Assess the crisis situation.
  9. Finalize and adapt key messages.
  10. Conduct post-crisis analysis.

Every organization is vulnerable to crisis. Whether it’s driven by circumstance or human behavior, a crisis invariably does damage. When it comes to managing a crisis and reducing that damage, “an ounce of prevention is worth a pound of cure.” Taking the time to define your crisis management and crisis communications processes; and investing resources in developing the leadership competencies they require—these are the preventative measures that will limit damage to your organization and ensure a rapid recovery when crisis hits.

 

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[2] Excerpted from Bernstein Crisis Management. 10 Steps of Crisis Communication. http://www.bernsteincrisismanagement.com/articles/10-steps-of-crisis-communications.html  This article provides a detailed overview of Crisis Communication.

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