Business

Struggling with crisis management? Here are the golden rules

BY Mike Penrose   /  26 March 2020

During periods of uncertainty and crisis it is all too easy to focus on the immediate needs of your organisation and its employees. It is difficult to deal with the overwhelming amount of work that comes with the necessity to rapidly adapt your ways of working, the sheer volume of day to day stuff that needs doing, and most importantly ensure staff welfare and support.

In a crisis, clients push back work, cashflow gets squeezed and order books get thinner. Some of the measures announced by the Chancellor so far in this crisis will help organisations through this difficult period, it is an unprecedented bail out, proportionate to these difficult times, and to be widely applauded (unless you are self-employed, but that is for another article).

For organisations adept at crisis management, or who are well supported in dealing with a crisis or an emergency, these periods also offer an unparalleled chance to evolve and adapt.

They develop new, more effective ways of working, modernising communications and remote working infrastructure (that is arguably far more adapted to our globalized world), and focussing on “upskilling” staff, increasing productivity and efficiency. Incidentally, that relates to perhaps the biggest long-term challenge that post Brexit Britain faces, our appalling levels of productivity.

The circumstances being created by Covid 19 might just be the catalyst Britain needs to adapt its economy to become really competitive in the future – to bounce back and do so with vim and vigour as Boris might say. The question is, will we do what is necessary to achieve this, or remain focused on our short-term needs. It has often been said that the seeds of success are sewn in difficult times, when creativity is at a premium, and success is harvested in better times, which do always return.

This is where experienced crisis management and business continuity support is so important. It allows organisations and their leaders to manage uncertainty and change, always with an eye on opportunity and the future, without getting lost in the demands of the moment.

Having managed more than my fair share of strange and unusual crises and emergencies, for companies, governments, the UN and NGOs, my advice to all business owners out there, be they big or small, is to focus on skills over seniority when pulling together your plans to respond to this temporary anomaly.

You would be surprised how few company leaders, politicians and strategists are effective crisis leaders. There are a rare few, but in my experience, most are fairly poor. This is mainly because the skills needed to be an exceptional CEO, such as a long-term vision, consistency in style, a balanced perspective on risk, patience and a singular focus are not really that adapted to the crisis environment.

Crisis nearly always pass quickly, far quicker than your average parliamentary term or business strategy period. They are frenetic and unpredictable, and require energy, adaptability, resilience, the ability to make quick decisions with incomplete information, to switch from strategy to tactics and back again rapidly, see patterns where others don’t, and the ability to understand and accept a level of risk that is almost certainly higher than most are used to.

In my experience the best crisis managers are usually either career crisis professionals, or dyslexics, or both. I say dyslexics because in my experience the dyslexic brain tends to be better at seeing unusual patterns and opportunities and is more used to thinking unconventionally.

Good leadership in this time will also require good followership. The Covid 19 business leader needs to form a crisis team around them, who can take away the immediate pressures of dealing with the day to day consequences of the disease. Not plunge themselves into the tactics of dealing with it.

They should also have a separate team looking at opportunity and innovation and apply their strategic brain to what the UK and global economy will look like in 18-24 months time and if possible invest. Invest in what is to come, not only in what is happening now. And yes, Covid 19 will probably be about in its current form for at least that amount of time, with ebbs towards normality and flows back to uncertainty as the virus waxes and wanes due to seasons, increasing immunity and / or mutation.

The statistics show, that the majority of businesses who mishandle a crisis or who are ill prepared to deal with it go out of business fairly soon afterwards, whereas most who handle it well will come out of it stronger, and with less competition, so they flourish.

The truth is, managing a crisis is actually pretty simple if you know how, (there are those, often ex-military, who love the jargon and language that make it sound complex, but it isn’t). The decisions you need to take don’t tend to be any more complex than those you take on a day to day basis. The blocker, the thing that causes delays and people to over-think things, tends to be the fear of the consequences of failure.

This is also where experienced crisis managers are worth a lot.

Anyone who has managed major crises in the past has invariably got things very wrong, very often. One of the crisis managers I respect the most, who is currently working for WHO, attributes his success to constant and unrelenting cockups. He is, in my mind, arguably one of the best in the world, and when I worked for him, he often got it wrong. But he shrugged, made a joke, and got on with making the next decision (and he may kill me for saying this, he is a somewhat grumpy plain talking Northerner.

People like this are used to that type of pressure, and managing it is a learned skill, it is rarely innate.

It is also fear of being blamed that causes leaders to break the four cardinal rules of crisis management, or the four cardinal rules as far as I see them.

The first is, if a decision needs to be made, make it, even if you are unsure or don’t have all of the information you would like to have at hand. An imperfect plan executed with vigour is better than the perfect plan executed too late.

The second is never, ever, ever hide the truth or cover things up, it is better that the most uncomfortable truths are out there to be dealt with, than hidden until they become too big to cover up. How many people have you seen criticised for tackling the tough problems first, in an open and transparent way? Very few I would surmise. But how many have you seen go down in flames for hiding the truth because of a fear it might reflect badly on them, only for the issue to come out later.

The third is never tell the press or your “stakeholders” anything you can’t substantiate. They will find out, and then you are toast. Better to say you don’t know, than invent something. We are all often quite poor at admitting we don’t know something that appears on the surface to be quite evident or simple. That is why there are so many variations of every truth out there. In a crisis you need to look for the truth, not variations of it, and made up facts and figures cause more harm than good.

Lastly, never try and solve problems that don’t need solving or answer questions that aren’t being asked. This might sound obvious now, but I have seen so many crises become disasters because the leader got distracted by the easy to solve, or waylaid by the unimportant or the unanswerable, normally because it was also the most visible issue. This I have recently started to call the “Toilet Paper Conundrum”. Where people in a crisis focus on the irrelevant at the cost of what is actually important, because of groupthink, visibility, and because it is easy.

These uncertain times present business and society with an amazing opportunity to take big leaps forward. There is a reason so many world changing inventions are invented during wartime, because needs must and the focus is on what actually counts. Maintaining that focus throughout is not something that should be taken for granted, however. You will fare far better with expert support, ensuring you can focus on what happens after this all blows over, rather than concentrating on a shortage of toilet roll and dried pasta, or whatever the equivalent is in your line of work.

Mike Penrose is Founder and Chief Executive of the Sustainability Group. Mike set up the Sustainability group to help businesses and investors plan for a sustainable future through a focus on business resilience, intelligence and adaptability. Prior to setting up the Sustainability Group he had a 25-year career leading risk, crisis and disaster management organisations and operations in more than 60 countries. Including periods as CEO of Unicef UK, CEO of Action Contre La Faim in Paris and as Global Humanitarian Director for Save the Children.


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