Preparing future business leaders to make wise choices is the principal objective for institutions of higher education that confer degrees in business and management. However, given a lack of crisis management curricula in many university business- management programs, it would be unrealistic to expect good decision-making of these “leaders” during times of crisis. Not taking the time to actively engage in thinking about and planning for crises is a major contributing factor in the current crisis of leadership. Curricula should be training students to apply effective and proven methods of engaging potential or emerging threats. Just as lawyers should not ask a question in court for which they do not know the answer, business leaders should not plan a business venture without carefully considering, and planning for, inauspicious contingencies. In addition to building a diverse and manageable crisis-action team, future business leaders should be taught how best to implement the following crisis-management practices:
- Build crisis planning into the corporate culture. Leaders need to invest in their future, and the future of the organization they lead, by taking the time to learn, engage and inculcate realistic crisis planning as a part of the organization’s process, not as a response-driven activity. Bottom-up approaches, which exclude direct c-suite involvement, are recipes for failure.
- Apply a lean crisis-management structure. Multi-layered, committee-based decision making does not work in a crisis. Applying a function-based incident command structure, such as the Incident Command System is critical to successful crisis-management.
- Scan the horizon for threats, risks, and opportunities. Market fluctuations, geopolitical events and environmental changes represent growing risk factors in the global economy. For example, countries with dissimilar religious, political or social systems may present joint-venture risks that aren’t merely monetary or business-related. Therefore, collecting, analyzing and acting upon risk-related intelligence are key elements of any holistic approach to crisis preparedness.
- Resist the temptation to develop or rely on elaborate and pedantic response plans. It is true that “no plan survives first contact with the enemy.” Equally true is that detail-rich plans provide the fodder of post-incident litigation. The best crisis plans are simple, event-neutral checklists
- Practice. Organizations that “dust off” their crisis-specific response plans often end up in the same detritus from which their plans were retrieved.
- Engage in unbounded thinking. Envisioning options which are not naturally evident is a key crisis- leadership skill that can be developed with study and practice. An example of this technique involves engaging in simulated crisis “micro-games” where leaders envision a scenario which could negatively impact their organization and brainstorm possible solutions. The learning archived from these games can help business leaders anticipate and mitigate potential crises.
- Focus on the impact of cognitive bias to decision-making, and adjust accordingly. To counter the effects of decision bias, leaders should maintain and refer to a list of cognitive biases and the negative consequences of their manifestation. Among the cognitive biases that impact good decision-making during a crisis are group-think, probability neglect and anchoring decisions on flawed assumptions.
- Develop pre-event crisis communication templates. The lack of communication or poor communication during a crisis is one of the most cited issues in post-crisis critiques. Consider the role that effective communication had during and after the September 11, 2001 attacks on New York City: following the attack, Mayor Rudolph Giuliani, because of his experience as a litigator and practice as a city-wide crisis manager, used pre-developed crisis communication plans. The lesson from this experience is that leaders need to develop referential crisis-communication skills and pre-crisis communication templates.
- Find the good in a bad situation. Although it is difficult to envision the desired end-state of a crisis as it is happening, this is an important developmental skill. At the very instant a crisis occurs, leaders should ask themselves, “What good will come of this?” Returning to the example of September 11, it is clear that New York City is more crisis-resilient because of the city’s response to those shattering events and the lessons learned that day. Leaders can shape organizational recovery by applying this end-state thought process throughout any crisis they encounter.
- Remember the last event, and learn from it. Directly after a crisis or emergency, conduct an action- oriented review; with a focus on brevity. Then, be sure to act on the lessons you learn.
Actively planning for the broad range of potential crises that can besiege an organization, appointing a team, and writing a good plan will all help business leaders respond to crises with the competence their organizations expect. The best practices I’ve listed here deserve a more developed and formal presentation than they currently receive in the curricula of America’s business schools. No MBA degree recipient should graduate without an understanding of these critical business tools.
Phillip Van Saun is a Visiting Professor of crisis management at the Centre for Advancing International Management at Saint George’s University and is Director of Continuity and Emergency Services at the University of California San Diego. He can be reached at: firstname.lastname@example.org