Strategy & LeadershipHow to anticipate and manage future crises

How to anticipate and manage future crises

Professor David Falzani MBE outlines some of the key ways organisations and HR leaders can anticipate, manage and lead effectively in a crisis.

The pandemic has shown no organisation is immune from crisis. We now know trouble can strike at any time and in any form, testing the resilience of the tiniest enterprise and the largest corporation – and everything in between.

But maybe the pandemic has also delivered a second valuable lesson: that crisis, while tough to avoid, might at least be anticipated. The challenge, of course, is understanding how.

 

What is a crisis?

 

Recognising what crisis is – what it actually represents – helps us better appreciate how to prepare for it. This improves our chances of weathering the storm.

Think of crisis in terms of risk. This can require a significant shift in conceptualisation for many organisations, which tend to associate “risk” only with acts of bureaucracy – paperwork, insurance documents, safety assessments and so on.

It can also require a substantive change in organisational culture. It demands that multiple stakeholders within a business work together to identify and guard against shared threats rather than operating in silos.

As recent events have illustrated, risk is frequently unpredictable. It could stem from external factors, such as an environmental disaster or – as we’ve experienced – a pandemic. It could arise from internal issues, such as poor leadership or bad bookkeeping.

This means protecting against each and every prospective crisis is impossible. Yet the next-best thing – an outlook that analyses, frames and controls risk – is eminently attainable.

For this to happen, employees at all levels of a company should have an awareness of the risks around them and the crises to which these could lead. So how might this be done?

 

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Anticipating a crisis

 

There are many sources of risk within a company, and different people are likely to have different perspectives on them. It’s therefore essential to devise a strategy that draws on all these viewpoints.

The basic aim should be to obtain a wealth of information about a business’s operations and the dynamics that shape them. This can be achieved through the process of stakeholder mapping. Here’s how to create an effective stakeholder map:

  1. The first step is to identify and categorise different stakeholder groups. These are likely to include senior managers, line managers, other employees and even customers – as well as external experts if budgets permit.
  2. It’s then necessary to define the issues each group could face and how much influence the company might have over these. This helps establish a permanent, multifaceted focus on security across an organisation’s hierarchy.

Done well, stakeholder mapping should make it easier to outline how the fallout from a specific crisis might be managed. It should help determine how each group could be mobilised and what an ideal outcome might be.

In other words, such an approach should enable the whole business to better understand areas of risk. Perhaps more importantly, it should allow everyone to think about planning around and potentially responding to them.

 

Managing a crisis

 

Although prevention of a crisis is the better option, it’s also likely to be harder. It’s usually more a case of reasonable preparation and, once crisis does strike, effective management.

The latter calls for continued dialogue. Any business that hopes to stay on top of a situation must maintain communication with all stakeholder groups – especially employees, who are likely to be the principal victims of the uncertainty that crisis generates.

Forward-thinking companies bring their staff into the risk-management effort from the start. Once a crisis has arisen there’s absolutely no excuse for keeping them out of the loop.

Reassurance is imperative, given that job security tends to be uppermost in workers’ minds. If redundancies are inevitable then the implications must be detailed in full. Consultations should always involve the workforce and, if they’re present, unions.

Clarity and candour are vital. A business that fails to exhibit these attributes may be particularly likely vulnerable to losing much of its top talent in the face of a crisis – even one that eventually turns out to be survivable.

A crisis is also seldom confined to a company itself. It can fan out in all directions, even encompassing consumers. This is why everyone has to be on board and “on message”. There’s no point in championing multi-stakeholder communication during the prevention/preparation phase and then clamming up when calamity does hit.

 

Leading in a crisis

 

Although everyone has a part to play, it’s a company’s leaders who must ultimately seize responsibility in dealing with a crisis. They’re the ones who have to stand up and be counted. They’re the ones who have to navigate a route back to comparative calm.

Consensus, transparency and commitment – rather than self-interest, concealment and quick fixes – lend themselves to meaningful responses. It’s not enough for leaders merely to do the right thing: they must be seen to do the right thing.

Communication is once again crucial. Straightforwardness and honesty hugely enhance the likelihood of satisfactory outcomes, whereas waffle or reticence can imply instability and aimlessness.

The rank and file are more likely to stick around if leaders are open in addressing developments. By contrast, they’re more likely to jump ship if those in charge seem secretive or clueless.

Leaders also need to acknowledge crisis’s capacity to bring about positive change. This is why one of the most telling acts of leadership can be to give everyone a voice – it’s the best way to maximise idea generation in extreme circumstances.

Company-wide engagement may produce novel, unexpected and even radical solutions that serve a business well both amid turmoil and beyond. Provided leaders adopt a genuinely inclusive approach, ambitious proposals that would likely fall on stony ground during periods of tranquillity can suddenly find favour in turbulent times.

 

Conclusion

 

There’s no spectacular cure-all for crisis. The experience is unpleasant, and there are often casualties. But shedding light on potential problems, avoiding indecision and involving everyone in the response can make it survivable – and may even sow the seeds for longer-term benefits.

Remember, too, that sometimes – not least when things are going well – it’s tempting to assume the risks that give rise to crisis are no longer part of the picture. Such complacency is dangerous. As we’ve all been reminded, the truth is that risk is always present – even when it seems there are no storms on the horizon.

 


David Falzani MBE is a Professor at Nottingham University Business School’s Haydn Green Institute for Innovation and Entrepreneurship (HGIIE) and president of the Sainsbury Management Fellowship.


 

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