Nepal | December 12, 2019

Learning to handle crises

Learning to handle crises

Most companies assume a crisis won’t reach them, or if one does, they’ll react appropriately. A crisis most likely will occur in your company, perhaps even in your department. Most crises are human caused and, therefore, are prone to blame — by the public, the consumer, staff and management. How a crisis will turn out strongly correlates with how well prepared your organisation is to respond.

Crisis management

The worst time to learn crisis management is during a crisis. Most organisations are a long way from practicing proactive crisis management. I’ll present some guidelines for establishing routines and capabilities to handle potential crises.

Form and train crisis-management

teams. Assign teams to be responsible for monitoring early-warning signals, maintaining readiness and coordinating responses should a crisis occur.

Create a crisis portfolio

Similar to a financial portfolio, a crisis portfolio is a tool to analyse and spread risks. For example, there are financial crises (hostile takeover), legal crises (losing proprietary information), psychopathic crises (sabotage) and industrial disasters. While it certainly isn’t possible to have a plan for each conceivable crisis, it is possible to identify those that represent the major threats to the organisation.

Inputs for potential crises should come from many departments. Since no crisis ever happens according to plan, the important activity here is the planning process — thinking about the unthinkable.

Work at signal detection. Most human-caused crises emit early warning signals,

but most organisations have little, if any, way to identify those signals. Companies that do the best job of signal detection usually have active, well-developed programmes that allow them to identify emerging issues. For instance, new governmental regulations, that would have a disastrous impact on a certain company, were in the early stages of being considered. However, the company made certain that it understood the forces behind this

regulation. Then, they successfully lobbied — the right people in the right way — to have

the regulation defeated.

Audit continuously Crisis management is most effective through continuous process improvement. The best organisations regularly audit their external environment, as well as their operations, technologies and organisational culture. This identifies potential vulnerabilities that could lead to a disruption, incident or crisis.

A company should systematically scrutinise past crises to understand the ones it has managed well versus the ones it has handled poorly; audit the status of its early-warning detection systems; audit the status of its damage-containment and business-recovery systems; review its organisational structure, communication channels, reward systems, and general culture to understand how they will help or hinder the organisation in a crisis.

Integrate lessons learned Crisis portfolios, early-warning signals and systematic audits aren’t useful without organisational learning. We must understand and integrate the lessons that previous human-caused crises have taught. Without such learning, we repeat mistakes. Sometimes it may be useful to hire outside experts to review what has occurred and why.

Of course, it’s impossible to avoid all crises, but we still should do the best we can to prevent those crises that are preventable, and to manage more effectively those which still occur. Plan-Train-Act. The ultimate lesson of crisis management is that we aren’t powerless.

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