The problem for crisis management preparation for major organisations put in simple terms is that the world has changed significantly in recent times. Change is accelerating and the executive management appetite to prepare for crises and what is known as ‘accepted’ practice is not aligned to the complex and interconnected world we now find ourselves in. This gap between requirement and appetite is not narrow but it is a chasm and getting wider. The requirements for crisis communications planning are also now very complex.
There are a number of identifiable trends which act on the requirements for crisis management. These are increasing the probability of major disturbance in the business environment. We face a ‘cocktail’ of 4 major trends. This cocktail’s (a great title would the ‘global shock’) main potent ingredients are interconnectedness, market and political volatility stirred with new media/Web 2.0 and topped off with the way modern management operates. In addition, the pace of change around the world is increasing and new technology and disruptive risks are emerging and there will be new challenges (the Wold Economic Forum Risk Report calls these ‘X’ factors).
We find that at executive level major multi-billion pound global organisations have a brief crisis plan, a half formed crisis communications plan and run a 4 hour exercise per year to prepare. This seems to be the norm or ‘accepted’ practice. Why is there a surprise when an organisation does not effectively handle a crisis inside the organisation or in the business environment? (Volkswagen emissions local versus global for example) The outcome is that in most crises opportunity to make effective and timely interventions is not taken (e.g. the US EPA served notice to VW on 3 September about the irregularities, when the story broke on the 18th – what was done in this period apart from calculating that Euro 6.5 should be set aside?).
In a crisis positions are ‘unfrozen’ and unthinkable strategy options could be possible (such as competitive action) to improve position in the new market, this is where opportunity appears. Opportunity is present to increase brand loyalty. However, crisis management is not ‘stochastic’ (what you put in is what you get out!) some organisations do manage to cope through the acute stage without advanced planning. This is often due to someone on the management team stepping up to the plate and instinctively doing something that is bold. But this is not the ’norm’ in many organisations and certainly not in some organisations where the culture (CEO character, company and nationality?) is not conducive to empowerment i.e. no one moves without head office approval. ‘Betting the farm’ on someone stepping up could not be considered ‘good governance’!
So while the stakes in a corporate crisis are strategic, the preparation and attention payed to being ready for the turbulent world is often tactical at best. One only has to look at the permanent and forced change to BP’s strategy following the operational problem of the Deepwater Horizon disaster. Other recent examples would be Tesco, Co-operative, Malaysian Airlines and the on-going Volkswagen emissions crisis. There are some organisations that are very well prepared and allocate management time and money to this control. These seem to be the organisations that have learnt a hard lesson and have actively done something about it. It takes the ‘kick of a donkey’ before action is galvanised.
Typically, in the better prepared organisation, the requirement for improved systems are pushed by an executive who has ‘been in the hot seat’ or who has received the ‘wake-up’ call of a near-miss. Speaking to some of those senior individuals they say that being in corporate crisis is arduous, frightening and exhausting all at the same time. The CEO of Talk Talk led from the front, appeared on the media (she completed a large number of interviews in first 48 hours) and by day 4 she must have been exhausted. Crises demand a different way of working and once experienced, the lessons are deeply implanted. It is not normal management speeded up!
We need to look forward and I think Identifying the changing requirements raises some issues and challenges we should consider as practioners or interested parties in helping management prepare for major disturbance to planned strategy. The gap remains between what is required, where accepted practice is and the management’s appetite to prepare. My argument is that it is no longer a sustainable position to be poorly prepared in the face of the ‘certain’ uncertainty and pace of today’s interconnected and turbulent environment, if an organisation wants to remain competitive and in some cases continue to exist. You can argue that failure to prepare adequately is negligent. It is not enough to have reactive arrangements. We need to help our management to prepare properly for crisis leadership as all indications are that this coming decade will provide plenty of novel risk and opportunity. We need some new thinking and a re-evaluation of requirements and a way of energizing the appetite to be prepared. But as this is ‘thought leadership’ it comes with a large caveat, as someone said “the problem with looking forward is that it involves the future!”
When developing crisis management capability for major enterprise evaluate the value at risk to underpin the requirements (why would I commit resource if it is not on the risk register?) and enable the appropriate focus and resources to be committed
Crisis management and organizational resilience are central to protecting and underpinning the business strategy – what risk is reflected in the risk register – does ‘mismanagement of major disturbance to the planned strategy’ appear?
The design of the crisis management operating model should be carried out to cope with an internal’ bottom-up’ event causing a crisis but also to cope with industry and major external events that affect the global market
The need is to achieve an agile problem solving management team who understand the value of a well handled crisis for sudden and gradual change. Consider developing scenario planning and ‘war games’ for senior management teams. This provides an engaging vehicle to learn in a controlled environment the value of wider thinking to develop effective interventions. This game is played out in the a real world setting to have the potential to achieve better thinking now to enable better long term outcomes. The risk theme of the day is cyber-attack, this is affecting all organisations is some way and is now an endemic risk. Most executives recognise the issue – USE IT to increase appetite!
The right knowledge, skills, attitude and behaviours (KSAB) need to be defined to enable suitable training (or coaching) and exercise programme(s) to be developed for the top levels of leadership & management