Leadership in a crisis
Crisis can strike a business at any time and in any form. Unfortunately, there are few easy fixes. There’s no miracle cure-all, and crack teams of problem-solving experts usually prove to be the stuff of dreams.
Ultimately, it’s a business’s own leaders who have to steer the ship through a storm. But how is this done? Is it inevitably a matter of battening down the hatches and riding the waves? Can troubled waters be avoided or at least smoothed?
We first need to understand what a crisis actually is and how it comes about – and then we can begin to consider how an organisation might try to prepare for such an eventuality. The starting point for this process can be summed up in one word: risk.
Risk is everywhere
The management of risk has become a major component of how institutions and workplaces conduct their day-to-day operations. It’s still sometimes tempting to view it as an act of pen-pushing tedium – paperwork, insurance documents, safety assessments and so on – but today “risk” has become a much broader concept.
The term now encompasses a whole range of potentialities that could negatively – and significantly – affect a business. Recognising as much requires a shift in conceptualisation and, in tandem, a change in organisational culture.
Of course, we can never be fully prepared for risk. By its very nature, there’s a good chance that it might take us completely by surprise. It’s highly unpredictable and could come from pretty much anywhere.
For example, a crisis might be caused by external factors, such as an environmental catastrophe, an arson attack or an information breach. It might be caused by internal factors, such as rogue bookkeeping or sabotage. It might even be caused by factors that we haven’t even begun to imagine.
It’s plainly unrealistic to suppose that all of these can be protected against, less still that the threats that they pose might somehow be eradicated. So the harsh truth is that there will always be storms to navigate. But none of this means that risk can’t be managed or that crises can’t be prepared for.
Preparedness demands perspectives
The first step towards preparing for a crisis is to develop a clear strategy for gathering information about every one of a business’s operations. There are innumerable sources of risk within any company, and senior managers are often blind to these until it’s too late.
Line managers will be aware of many of the risks associated with their departments, but they might not have the same outlook as their staff. The same goes for external experts, who should be able to bring a fresh perspective by weighing up a firm’s risk-planning efforts objectively.
All of this means that there’s enormous value in entering into dialogue with stakeholders and at every level of an organisation. This can be achieved through stakeholder mapping, which involves the following measures:
- Identify and categorise different stakeholder groups, from employees to customers.
- Research and define the issues that each group might face and how much influence the company has over these issues.
- Outline how to manage the fallout from a specific crisis; how to mobilise each stakeholder with a view to addressing the problem; and what an ideal outcome might be.
This sort of approach provides diverse information about potential areas of insecurity and encourages planning for crisis scenarios. It’s also crucial in establishing a permanent culture of security throughout a business’s hierarchy.
A few final thoughts
Ideally, any team responsible for security, risk management, crisis prevention or whatever else we might choose to call it should be drawn from the above knowledge base. In addition, keeping the flow of information regular and comprehensive is imperative if executives and managers are to remain informed and involved.
An overarching objective should be to ensure that all employees are constantly aware of the risks around them. This ought to be achievable if the correct protocols and procedures, as developed in accordance with risk assessments, are in place.
Remember, too, that a crisis is seldom confined to the business itself. Its impact is likely to extend in many directions, including a company’s consumer base. This is why it’s essential to promote open and transparent communication with external stakeholders.
As stated earlier, nothing can eliminate risk – which means that nothing can guarantee that a crisis will never strike. Immunity simply isn’t an option. It’s vital to acknowledge that preparation and management are really the only games in town.
Finally, it’s worth recalling former US Treasury Secretary Henry Paulson’s lament that it’s hard to get credit for avoiding a disaster. With that remark in mind, don’t underestimate the positive influence of crisis preparation and risk management when things are going well. Even when there appear to be no storms on the horizon, complacency is dangerous.
David Falzani MBE is an Honorary Professor at Nottingham University Business School’s Haydn Green Institute for Innovation and Entrepreneurship and president of the Sainsbury Management Fellowship.
Nottingham University Business School specialises in developing leadership potential, encouraging innovation and enterprise, and developing a global outlook in its students, partners, and faculty. It is recognised as one of the world’s top business schools for integrating responsible and sustainable business issues into its undergraduate, MBA, MSc, PhD, and executive programmes and has unrivalled global reach through Nottingham’s campuses in the UK, China, and Malaysia. The School holds a Small Business Charter Award in recognition of its important role in supporting small and medium enterprises. It is accredited by both the Association of MBAs (AMBA) and the European Quality Improvement System (EQUIS) and ranks among the UK’s top ten for research power.