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Crisis Management
Organizations are more vulnerable than ever to crises. To manage them, companies and organizations must start by understanding what crises are and how they can dealing with them.
What is a crisis?
A crisis is a sudden or evolving change that creates an urgent problem requiring immediate attention. Examples could be:
- Life-threatening defects are discovered in a company’s product.
- Computer hackers shut down an organization’s entire IT system.
- A natural disaster wipes out a key supplier.
- A terrorist attack destroys lives and property.
- A key leader dies with no obvious successor.
Crises are not the normal ups-and-downs of a business cycle—recurring problems that occur as an organization takes risks and explores new opportunities. Instead, crises are wrenching, painful events.
Yet some good can come out of crises—because organizations can learn from them. Managers can use insights gained from a crisis to prevent future crises and manage unavoidable ones more effectively. Sometimes, they even find new opportunities as a result of crises.
Lead Effectively During Crises
The best leaders demonstrate distinctive attitudes and behaviors during a crisis.During a crisis, the most effective leaders demonstrate compassion. By being compassionate, you allow people to deal with the chaotic emotions that crises can trigger and help them recover more quickly. Decisiveness is just as critical as compassion in a crisis. But being decisive isn’t always easy. In a crisis, you often have to act without complete information.
Learn from crises
Every crisis offers opportunities to learn how to prevent, prepare for, and manage future crises. Discover ways to extract maximum insight from a crisis. Try to learn from the experience and make changes to avoid or prepare for similar crises.
Effective Crisis Management
Savvy managers know that the best way to prevent crises is to prepare for them. Discover how to master this critical aspect of crisis management. Some crises are avoidable. The best way to prevent them is to anticipate them and then take action to stop them.
Keys to anticipating and stopping avoidable crises include performing a crisis audit, scanning the business environment for crisis warning signs, and recognizing and preventing “near misses”—seemingly harmless day-to-day events that, if ignored, can flare up into a big crisis.
Some crises are unavoidable because they’re set in motion by forces outside your control. You can’t prevent them; you can only prepare to handle them as effectively as possible when they strike. To prepare for unavoidable crises, you need to build a crisis-management team and develop a contingency plan.
To respond effectively to a crisis managers need to:
- Find out what’s happening. Often in a crisis, there’s an initial flurry of information, most of it inaccurate. Discover the truth—by asking the right people.
- Face the crisis. Turn your own and others’ fears into positive action.
- Be vigilant. Watch for new developments and important changes in information about the crisis.
- Prioritize. First, make sure that people are safe. Then assess the next-most-critical need.
- Know what you can control. Assess and respond to what’s under your control. Inform those who can help with aspects of the crisis you can’t control.
A crisis requires fast, confident decision making and action—including determining whether you’re facing a crisis and, if so, swiftly containing the damage and resolving the situation.
A manager has worked to contain the crisis by limiting the damage it’s inflicting on your group or organization. Now, to resolve the crisis one should:
- Take action. If you’ve developed a crisis contingency plan, activate it. If not, make a quick plan now and activate it.
- Avoid blame. In the midst of a crisis, the impulse to blame people can become irresistible. This is especially true if someone’s incompetence or serious error has directly caused the crisis. But blaming others only distracts people from focusing on resolving the crisis, so don’t give in to the temptation.
- Don’t get sidetracked by rules. Most organizational policies weren’t created with a crisis in mind. Do whatever has to be done to resolve the crisis, even if you need to break some rules.
- Help everyone work together. Draw people together to act as a team. You’ll inspire them to do what’s needed to end the crisis.
Effective crisis management involves:
- Expectation management. Depending on the nature of the crisis, a quick resolution may not be possible. People and teams should not be alarmed to the point of panic. Leaders need to be able to manage people’s expectations. At the same time, do need to acknowledge the magnitude of the situation and to let people know that resolving it could take some time. Leaders should be able to model the behaviors and attitudes they want others to demonstrate.
- Flexibility. In a crisis, effective leaders adapt quickly as circumstances change. They understand that they may need to change their strategy by keep taking in new information about the crisis as it emerges, and adjust their responses as needed to manage and resolve the situation.
- Emotional resilience. Whether a crisis is short-lived or drags on for a while, leaders need to be emotionally resilient by continuing to be effective despite the stress, anxiety, and fear they may be feeling.
