How many times have you been eagerly awaiting an event, only for unforeseeable circumstances to result in its cancellation? Take the New York marathon as a recent example — it had to be cancelled as a result of the 2012 Hurricane Sandy. Crises are inevitable. But, there are steps leaders can take to avoid their organization from suffering detrimentally. This Idea explores these steps, and considers how to learn from a crisis in its aftermath.
Even when there are contingency plans in place, crises can happen and in organizations this is when true leadership is tested. Companies like Apple, Toyota, PepsiCo and many others know this all too well, having come through potentially-crippling crisis situations. But not all organizations are so lucky or so well prepared. So what can be learnt from the experience of others? More importantly, what is expected of a leader when the unthinkable occurs?
Well, to start with, good leaders should assume responsibility and acknowledge the seriousness of the situation. Sometimes, it may not be necessary for the CEO to do so, but it does need to be someone high-up in the organization or it will simply look like they do not take the matter seriously. Leaders also need to ensure they designate the right person to ‘take charge’ and coordinate the crisis response. In small organizations, this ‘crisis manager’ will usually be the CEO; larger organizations, however, might appoint a Chief Crisis Officer.
It’s not just the size of the organization that influences the choice of the crisis manager; the type of crisis (e.g. product crisis, negligence, reputational crisis, etc.) is also an important factor. Additionally, when appointing or assessing the competence of an existing crisis manager or communications officer, leaders should look for qualities such as: confidence; relational ability; professionalism; and commercial sense.
As well as a crisis manager, a crisis committee should also be formed. Depending on the nature of the crisis, this unit can include the director of operations, legal counsel, customer service manager, or even outside specialists.
So what happens once the relevant people are in place? How can leaders ensure their management team will handle the crisis effectively and not let the organization cripple under uncertainty? The following points are some to bear in mind:
Though they can be severely testing times for organizations, ultimately a lot can be learned from a crisis. Leaders should keep a close record of what worked in dealing with the crisis and what didn’t, using those lessons to establish protocols for future reference. Also, they can acknowledge any ‘natural leaders’ that have emerged by perhaps giving them additional power or mentoring roles in the future.
Finally, it is important not to focus on the short-term by avoiding certain pay-outs or by partially covering up the problem. “Managing a crisis means considering more than short-term economic concerns,” says IESE Business School’s José Pin. “It means showing true leadership.”
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