These days, crisis management is a much needed executive competency

By Brian Orr
|Canadian HR Reporter|Last Updated: 04/29/2002

Increasingly, Canadian organizations are finding that their staff, customers, the public or the media are challenging the organization’s motives or ability to handle critical events. Failure to address such challenges in an effective and timely manner can leave an organization in crisis.

In such circumstances, traditional emergency or disaster plans fail to provide appropriate preparation for dealing with an organizational crisis. Isn’t emergency or disaster management the same as crisis management? If not, what is different about crisis management?

Most emergency or disaster plans deal with how the organization will respond to an unexpected event that disrupts its operations. Such plans include informing the public about the emergency and the actions being taken by the organization. However these plans assume that the organization’s response will be accepted as credible by staff, customers, the public and media.

The term "organizational crisis” applies to situations that involve significant adverse reaction by a segment of the organization’s staff, customers, local community or the media. Failure to quickly gain control of the situation results in a growing loss of confidence by a significant number of staff or customers. As a result, the organization experiences significant and widespread negative media attention. At times, the organization gets front-page coverage in the national press or becomes the lead story in the national evening news.

Organizations in crisis are becoming more common because of growing public expectations for ethical leadership and widespread cynicism about the credibility of senior management of organizations. Increasingly, staff, customers and public spokespersons are publicly questioning the motives and competency of executives when organizations face adverse or controversial situations.

When a crisis occurs, groups of employees or customers who feel they are adversely impacted begin to publicly identify themselves as victims of the situation. The stories and concerns of these self-declared victims becomes the primary focus of media coverage. As a crisis continues the organization’s leadership become increasingly emotionally charged and can begin to feel like victims of the circumstances.

Such crises can arise in one of four scenarios: an external event, internal event, adverse staff behaviour or controversial managerial/board decisions.

In a crisis an organization has two goals. The first is to address or contain the controversial situation that created the adverse public reaction. The second is to address the issues, concerns, fears and factual errors raised by people who feel they have been adversely impacted or victimized by the situation.

The process and principles for crisis management are becoming better understood based on the experiences of organizations particularly in the United States. In simple terms, the process includes the following steps.

•The first step in damage control is to ensure whenever possible that the organization is the first to release the bad news. It is important that all of the bad news is released at once and the situation is not misrepresented to avoid the impression of coverup.

•The second step is to define the end point for the situation, so that the organization can work towards a goal that will help to resolve the adverse reaction.

•The third step is for the organization to acknowledge and address concerns raised by people who identify themselves as or act like “victims” of the situation. Victims are those people who self-identify themselves as being adversely affected by the situation.

•The fourth step is for the organization to continually publicize a complete and accurate “record” of what happened, and how the situation is being addressed. Processes are also needed to correct any inaccurate and misleading information published by the media or that receive public attention.

•The fifth step is for the organization to solve or resolve the problem that created the controversy and to move forward.

•The last step is to sustain relationships with people impacted by the situation whether they are within or outside the organization.

There are a number of important competencies that enable business leaders to successfully manage a crisis, chief among them personal resilience. Executives must remain emotionally stable and calm, maintain objectivity while being personally attacked, and provide strong public leadership throughout the period of crisis. Managing through a crisis is a highly stressful experience for any executive. The trend is that organizational crises are becoming more common in Canada. The challenge is for executives to develop their crisis management capability so they are prepared to respond to and mitigate the consequences when a crisis impacts their organization.

Brian Orr is the vice-president of human resources, learning and communications at the London Health Sciences Centre in Ontario. He may be contacted at Brian.Orr@lhsc.on.ca.

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