Source: Wealth Creator Magazine January/February 2006

The diligent corporate leader knows reputation – personally and the organisation’s – needs to be preserved and nourished, and integrates that premise into every plan and strategy, from the vision and mission down to day to day operational procedures.

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Crisis Management

Source: Wealth Creator Magazine January/February 2006

Crisis management.

My kids often chide me when I remind them how the concepts underlying the second law of thermodynamics can be seen in everything we do. The effects of an action can never be wholly undone: while the email can be deleted, the impact of reading it can’t be erased from memory.

 

The examples in life – and the media – are easy to see: it takes time, energy, strength, courage and integrity to build a reputation. It takes just a few seconds of stupidity, a lie, or one poor decision, to demolish it.

Personal brands

Our reputations – our personal brands – precede us in almost every situation. We nurture and polish them, believing that the right shine will open doors and bring rewards.

At the onset of a crisis the corporate leader moves into a new spotlight on an unfamiliar stage, where the script says promote courage and assuage fear, instil calm and minimise panic, inform with facts and douse the rumours, make and communicate radical decisions.

In other words, demonstrate characteristics of leadership under extreme pressure in strange circumstances, where the trusted systems of communication and command may have stopped functioning. In severe cases the corporate leader may have just a few hours or days to prevent the fatal collapse of the business.

Whatever the outcome for the business, personal reputations have been shredded because the corporate leader was perceived to have managed the ‘crisis’ badly.

Prepare yourself

Can we better prepare ourselves to manage an unexpected event that may change the course of careers and lives? As the second law of thermodynamics reminds us, it takes determination and energy to maintain integrity and order. The assiduous few who minimise the risks to their reputation will use some determination and energy to create a crisis management plan and learn and hone the skills needed.

The first step is the longest because it often needs a change of mindset, an evolution of the culture, to acknowledge that crises do happen.

As our Crisis Management Handbook notes:

Analysis of numerous real-world crises shows it is not lack of planning or emergency response resources that turns problems into public relations and economic disasters. More often than not, the factors spelling the difference between effective management and mismanagement are subjective attitudes and related tendencies of human nature contributing to an organisation’s management culture.

More succinctly: the incident is usually not the cause of the crisis; your reaction to the incident usually is.

Broadly there are five cultural scenarios that frustrate even the best written crisis plan:

  1. Isolationist – the organisation tends to operate within a shell, having strong relationships only with suppliers and customers.
  2. Reactive – the classic ‘it won’t happen to us’ or ‘we’ll deal with it if it happens’ approach.
  3. Them vs. us – anyone who questions or raises a concern about something the organisation is doing is portrayed as the enemy.
  4. ‘Don’t tell the boss’ – if culture were a disease this is the fatal one. There is a high risk in telling management bad news because the messenger gets shot. So no-one really knows what is going on, even after it is too late.
  5. External communication is not important – there are no friends and allies to call on when the crisis hits because no-one knows who you are.

The diligent corporate leader knows reputation – personally and the organisation’s – needs to be preserved and nourished, and integrates that premise into every plan and strategy, from the vision and mission down to day to day operational procedures.

Crisis planning, training and preparation are acknowledged as part of the organisation’s advantage over competitors, and that small amount of extra energy used is viewed as a sound and practical investment in a more secure future.

Written by

Bob Pritchard has extensive experience in strategic issues management, corporate reputation management, investor relations, and government relations, and has worked with the senior management teams of some of Australia’s leading companies. bob.pritchard@communecom.com.au