How To Manage Crises At Work

There are two fundamental truths about crises:

First, the crisis you plan for is seldom the crisis you get.

Second, not all crises are single, potentially catastrophic events, such as fires, major product recalls, fraud – the list is potentially endless. Sometimes, crises creep up on an organisation and the challenge is to know when to identify the crisis as such.

The outbreak of SARS in southern China and Hong Kong in late 2002, ending in the summer of 2003, illustrates both points.

There were early reports, some dismissed as insignificant by medical professionals, of outbreaks of a mysterious disease in China. A few cases occurred in Hong Kong. The Government issued helpful guidelines about rigorous hygiene practices at work.

One afternoon in HSBC’s offices, I was debating with the head of HR whether or not the bank should declare a crisis and take its own steps to deal with the outbreak. In mid-discussion, we were interrupted by an obviously distressed regional CEO. Mindful of a possible disaster, we paused while he revealed the cause of his concern: fearful of infection, the Rolling Stones had cancelled their forthcoming concert in Hong Kong.

The Head of HR and the Head of Corporate Communications exchanged a simple nod. It was agreed. It was truly a crisis.

What to do, however, was far from clear. In the early days, nobody knew how SARS was transmitted, nor how serious it might become. In common with others, the bank had to devise defences as the crisis developed. Sadly, before the epidemic was over one member of staff had died.

Some crises are acts of God, hurricane Katrina in the United States being a famous example. Others are man-made, such as the sinking of the Italian liner, Concordia, whose captain was sentenced to 16 years in jail after he steered his ship too close to shore to impress his crew and passengers.

Both these crises in different ways illustrate three critical aspects of crisis planning.

The first is simple to describe but far more difficult to accomplish: don’t say something stupid to make the situation worse.

The government reaction to the Katrina disaster was almost universally panned as inadequate and incompetent. Michael Brown, the man in charge, inevitably was widely blamed. President George W Bush made perceptions of both his presidency and Michael Brown’s management worse when he publicly praised Brown: ‘Brownie, you’re doing a heck of a job!’

The second is that every organisation has a duty to plan to avoid disaster. For example, ships are equipped with radar, satellite navigation, charts, life jackets, lifeboats and safety drills. Such obligations need to be rigorously observed and enforced.

The third is concerned with recovery. Any organisation reliant upon computers – and few are not – will have backup and recovery plans in the event of breakdowns howsoever caused. Recovery plans for core corporate functions are critical.

When a crisis occurs, a speedy reaction is demanded. Both social media and traditional media will immediately form views about what happened and who was to blame. Reactions from those in charge will be demanded. Delay in delivering will be perceived as incompetence.

There is the additional risk that, absent an official response, supposed victims or third party ‘experts’ will fill the vacuum.

There exists, however, a sub-category of the man-made disaster for which a rapid response comment is difficult, even impossible.

From time to time companies fire large numbers of people. These are unpleasant decisions for those in charge and miserable for those affected. Planning firings is a lengthy process: the identification of the need and the areas of the enterprise affected; the names of the individuals must be considered. Legal and contractual obligations have to be assessed and compensation calculated. The timing and logistics of the announcement and its management must be settled.

These considerations take time and involve a lot of people. Leaks do occur and find their way into media. Corporate reactions are demanded. They cannot be given. Here’s why.

If the leaks are accurate and the company so confirms before they are ready to proceed then chaos will be triggered. Compensation, logistical and legal issues may be unresolved. A reputational disaster.

If the report of imminent firings is untrue, then the temptation to confirm it as such must be resisted. If it is not resisted, then the next time a report appears of imminent dismissals and the company declines comment the absence of comment will be perceived as absolute confirmation of the truth of the report. Similar constraints apply to leaks of financial information.

In anticipation of crises of all sorts, organisations, corporate, governmental, charitable have plans in place. These plans cover the three aspects discussed above: avoidance, recovery and response.

To achieve a rapid and successful early response to a crisis, managers have to know who is in charge, what is their own role, who is to be informed, where and how to meet leading colleagues, who will be in charge of formulating, clearing and delivering communications with both internal and external audiences. And who will be liaising with recovery teams. Contact information for critical personnel, and their substitutes in case of absences, needs to be readily available. The chain of command for the duration of the crisis must be absolutely clear.

If there is a site of the disaster – for example a fire or building collapse – then a team, including communications staff, must be dispatched to the site from where they will remain in contact with those charged with management of the response and crisis recovery.

Being seen to say and do appropriate things in the first minutes of a disaster will condition public views of the entire, lengthy recovery process.

Here are simple rules about what and what not to say:

Don’t speculate or be drawn into speculation. You won’t know immediately how many people are affected, what caused the incident, or the extent of the damage.

Don’t lie. If you don’t know something, don’t make a guess or make it up.

And here are some simple rules about what you should say:

Keep it short. You are managing a major crisis so a short, quotable and
appropriate remark will be fine, potentially covering concern for those affected directly and indirectly, and a commitment to work closely with recovery/investigatory services.

Promise to get back with an update; and do so. Being seen as a reliable and credible source of information is invaluable.

When you have a fuller picture of the crisis and what is being done, communicate. But you may need to clear your statements with a lawyer.

The crisis response plan as set out above needs to be short. Whether it is in documentary form or digital it must be memorable and easily digested in a hurry without the need to scroll through multiple pages and chapters.

And crisis plans must from time to time be rehearsed and stress tested.

But to every rule there is an exception. Occasionally, an incident or a public statement is so weird, so downright bizarre, that it is best ignored.

Recently, US Commerce Secretary, Wilbur Ross, announced that the Syrian missile strike carried out by US forces while President Trump was dining with President Xi Jingping, was ‘in lieu of after-dinner entertainment’. He added that it was also ‘cheap’. For once both the White House and the Commerce Department were stunned into silence. The best and only possible response.

4 thoughts on “How To Manage Crises At Work

  1. Excellent article David. Bang on the money. Executing the simple things well in a crisis is far better than reams and reams of meaningless drivel and incomprehensible flow charts with “decision-making nodes”. The one point I would add is that for all of this to work you really need to know and understand your organization, resources, priorities, capabilities etc. The information-gathering stage is by far the hardest to get right in advance of crises. These days major businesses are so incredibly difficult to fathom, interconnected across continents and time zones, hundreds of different business lines, thousands of processes, business foci changing almost by the month, a multitude of regulatory landscapes to navigate etc that agility of response by a resilient organisation empowered to make sensible decisions quickly is critical.

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    1. Jeremy, given your expertise and background your comments are very much appreciated. I totally agree about the complexities of international companies. The final point you make – making sensible decisions quickly – can be very difficult. People in head offices often want to micromanage when they are too remote to grasp fully what needs to be done and time zone issues create further problems. You will, of course, recall the tsunami. David Eldon and I decided the bank should make an immediate donation to the Red Cross, a small gesture in the scale of the disaster. John Bond and Michael Broadbent were still complaining a year later they had not been involved. But they never added a dime to the donation but used to. emphasize in public that the bank had been the earliest donor.

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