Tuesday, 9 October 2012

Are you a good crisis manager? Lyndon Bird FBCI explores the key qualities of good leadership during bad times

Lyndon Bird FBCI
So, are you a good crisis manager?
 
This is a difficult question for a business continuity practitioner to ask because generally they will be asking it of a senior executive or even a CEO, who is unlikely to believe they are anything less than excellent. However, many examples, such as the BP communications debacle after Deepwater Horizon or the failure of Toyota's management to address safety concerns in the U.S., show that the ability to successfully manage a global company does not always guarantee success in managing a crisis.
 
Just because you cannot predict the exact nature of a crisis doesn't mean you cannot prepare for it.
 
There are some aspects to a crisis which differ from day-to-day management. Unlike managing commercial and operational challenges, in a crisis the route map to follow is often unclear and the consequences of failure much more serious. A wrong decision can potentially damage the reputation of a company beyond repair. Who now remembers what a strong and influential company Arthur Anderson once appeared? It failed not because it had a bad business model, but because in one situation it failed to take control of the crisis that eventually engulfed it.
 
However, just because you cannot predict the exact nature of a crisis doesn't mean you cannot prepare for it. Because it is usually so serious, top management often plays the leading role in dealing with external stakeholders, including the media. This is good in that it shows the organization is taking it seriously, but bad if that leader is ill-prepared. A crisis is too urgent for a consensus debating style of leadership, but conversely the biggest danger can be over-confidence. Often top managers are dealing with circumstances in which they do not know the details of what plans or capabilities are available (or at least not the details), what the latest information is relating to cause and effect and what is actually happening "on the ground."
 
The two crucial elements needed to make decisions are situational awareness and up-to-date information. It is too late to work out how you get the information when the crisis has happened, so a way of monitoring potential problems needs to be constantly running. Despite this, when the crisis erupts, managers can still fail if they are not perceived as being "on top of the situation."
 
Some ways in which they can show this level of leadership are:
  • Always tell the truth based on the facts that are available.
  • If you don't know answers to a question, explain why and when you might know.
  • Always follow up on what you promise.
  • Do not delay making decisions and taking action. If you delay taking action, you almost always make things worse and are seen to be drifting.
  • Concentrate on protecting reputation, not necessarily minimizing short-term financial loss.
  • Ensure proper processes and systems are in place so that situation changes can be constantly monitored and responses modified as appropriate.
  • Communicate with all stakeholders, regularly and often. Make sure technical mechanisms are in place and the correct people are involved.
  • Ensure that internal and external messages are consistent. Do not tell the media one thing and staff something different.

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