When Management is not Enough: Leading Through the Crisis
By Peter Kavanagh

Crises by definition, are abnormal, often unexpected events requiring an immediate response beyond the capability of an organization's normal day-to-day business structure. In reviewing case studies where companies have suffered due to a failed crisis response, poor leadership is almost always one of the key factors. Conversely, when successful crisis response examples are studied, leadership is almost always one of the key reasons the organization survives. But despite the leadership experiences and performances that can be studied from numerous crisis case studies, many business leaders still think they know all they need to know about leadership and that crisis situations would be no different. However, when faced with real crisis - a situation that threatens the survival of employees and/or the organization itself, past examples show us that many seasoned business leaders have not been up to the task. This is because real crisis leadership is a challenge unique in its intensity and consequence.

In recent years there has been significant research activity in the area of crisis leadership. Naturalistic decision making (the ability to decide and take a correct course of action without comparing different options), action feed back loops, decision trees, are all terms and concepts used in the literature to describe some of the processes that may occur when making instant decisions. The purpose of this article is not to dwell on theory but rather to highlight some of the unique considerations of crisis leadership and introduce a very broad overall approach gained through extensive practical experience in leading through crisis. This particular article will look at the fundamental problem facing the crisis leader and the initial approach the leader must take.

Most business leaders will be familiar with the rationale decision-making model. This is the way decisions are normally made; a problem is studied, various options are identified, compared and contrasted and finally, after sufficient study the best option is selected. But the problem in crisis is that the leader rarely has the information he needs and never has the time he needs to get it before decisions have to be made.

In crisis, when a situation is not under control, the requirement for decision and subsequent action to gain control and stabilize the event is immediate. If the decision maker waits too long, any decision made is not going to have much effect on the outcome - the crisis will continue unabated and run its course. But at the time most critical to make a decision, the leader will usually not have the information he needs in order to ensure it is the right thing to do. The initial stages of crisis are chaotic, information is fleeting or overwhelming (certainly never what you want) and it is only in the fullness of time that the situation becomes clear. But that cannot be an excuse for not taking charge of the situation. The fundamental challenge in crisis leadership then, is to be able to quickly analyse a situation without sufficient facts but nevertheless make the right decisions to initiate action that will lead to stabilization and control of the event. The leader must perform under stressful circumstances, think through and take action, in real time, to find solutions to problems which are not covered by available guidance.

As a first step, attitude is vital. John F. Kennedy reminded the world in the early 1960's that the Chinese symbol for crisis is actually two symbols. The first means danger, but the second means opportunity. One of the ironies about crisis, is that although by definition it is a grave and dangerous time, it also presents an opportunity to display a competence that can actually increase a company's long term value. If observers see an ethical, competent or even brilliant response to a difficult situation it will only increase confidence that the organization has what it takes to survive. So the leader has to attack the situation and approach it with this attitude in mind.

Remember that the fundamental problem in crisis leadership is the requirement for decision but with an absence of information on which to base those decisions. Although the leader will rarely obtain the knowledge he needs in the initial stages of the incident when most crucial decisions are required, he must continually strive to comprehend what is going on from the first second of the response effort. It is useful to understand that information supports situational awareness which supports decision making. Therefore, the leader must always strive to develop situational awareness of the event and to do that, information management is key. It will most likely be chaos within the recovery centre (at least controlled chaos) and the leader must immediately institute appropriate information flow procedures. There are best practice procedures to ensure this occurs, but it is a constant struggle to remain effective and the leader must be tuned to this at all times.

Another fundamental challenge in responding to a crisis situation is prioritizing the response activity. Invariably, a crisis never requires just one response action. They are normally more complicated and there is usually insufficient resource available (equipment, personnel, etc.) to respond to all the tasks that need to be addressed. Limited resources and apparently conflicting responsibilities mean the leader must be able to immediately prioritize the recovery effort and continually re-assess this "triage". In commercial organizations, there is a responsibility to respond to public safety concerns. There is also a responsibility to shareholders and this may appear somewhat conflicting: large expenditure of resource to contain a crisis may decrease company profits. There will also be a marketing imperative to do everything possible to protect the brand. Many past examples clearly show that these responsibilities are often not balanced appropriately (Exxon Valdiz, Dalkon shield, Dow Breast Implants, etc.). But as the crisis leader, there really is no conflict. Organizations that demonstrate public concern by taking care of safety first, even though profits may suffer in the short term, will recover in the long term when brand association is enhanced as observers see that the organization truly puts people first.

In trying to prioritize response activities, the crisis leader needs to compare everything that has to be done against the overall priorities he has established in directing the recovery effort. If every activity is placed alongside the general and inviolate priorities of protect life, protect the environment, protect assets and promote recovery, the leader will see what needs to be done in a clear and logical order. If this philosophy is consistently followed, resources will be appropriately directed as they become available, the crisis response will be seen to be ethical and the crisis leader will always have a measuring stick that will stand up in the aftermath of the event as both outside and internal stakeholders analyse the response. To lose sight of these priorities (i.e., deploying a guard force to protect a perimeter from looters while there are still people that need to be evacuated from a dangerous situation) will only result in failure and increased loss.

Leading through crisis is a leadership challenge unlike any other. The leader must take charge under stressful conditions, make immediate decisions without the appropriate level of information and formulate response strategies often without guidance. The corporate attitude and a measuring stick with which to gauge the priority of all response activities are the first two crucial elements required for effectively leading an organization through a crisis.

About the Author

Peter Kavanagh is the President of COPE Solutions, a premier Crisis Management and Crisis Leadership consulting company. Before entering the private sector, Peter was Canada's senior operational Submarine Commanding Officer, responsible for crisis management training for all submarine Captains and their crews. He applies these exclusive, high value training techniques to COPE's crisis management practice and has consulted to federal and municipal levels of government and private corporations in North America, South America and Asia. For additional information, please contact Peter at pkavanagh@copesolutions.com.