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Crisis management - a leadership challenge

Crisis management of late has become an important component of managing the business. In the current day situation no business is immune to crisis. Crisis may hit an organization in the shape of terrorist attack, industrial accidents, product recall or natural calamity. Crisis management is closely linked to public relations where company’s image and pride are at stake.
Leadership framework for crisis management
A leader must institutionalize the process of crisis management to anticipate, prepare and mitigate an
impending crisis. To ensure an effective crisis management mechanism leadership support and involvement is absolutely essential.

First step in doing so starts with leader setting the tone by clarifying the goals and purpose of crisis management plan, which essentially are based on the philosophy and values of the organization. Leadership should help his top management team draft the crisis management policy, which provides definitions for generally used terms and identifies different levels of crisis in the organization. This demonstrates leadership’s commitment and promotes an enabling environment.
Second step in the process is to identify a core crisis management team, for identifying all possible crises that the company or any of its units may face and develop, plans, roles and responsibility for preparing and mitigating each of the crises. The role of leadership at this stage is empowering the core team for studying and analyzing crisis by various attributes such as industry, location, process, marketplace pressures etc.

Next step for leadership is to ensure effective and elaborate communication strategy and infrastructure even in the case of crisis / emergency / disaster, so that timely and consistent communication with internal and external stakeholders / partners is maintained at all times.

Establishing partnerships with external agencies is one of the critical leadership roles so that relevant knowledge and physical resources are available to the organization in times of crisis.

Also the leaders at appropriate levels should ensure that training pertaining to crisis management is imparted to the people and organizational preparedness for facing the crisis is checked time to time through properly designed mock drills.

Crisis resolution - the ultimate test
This generally is not sufficient, as usually crises are characterized by that dreaded element called surprise, so a strong emphasis on crisis resolution is part of crisis management. While no plan may manage a crisis but a practical plan and general preparedness may go a long way in resolving any crisis that may arise.

Meticulously designed crisis management plans might have been crafted and laborious drills might have been conducted to ascertain high levels of general preparedness, but that one critical decision which defines the organizational response and gives crisis resolution a specific direction and that affects the outcome and perception of stakeholders and general public in the big way depends on the values instilled by the leader over the years.

It is organizational values and leader’s belief that determine the organizational response to crisis on hand. Actions emanating from common understanding of organizational values have everyone in the company wedded to the cause. It is through such response and follow-up that the company and the leader emerge from the crisis with enhanced image and reputation.

Classic case cited for organizational response and successful crisis management is how Johnson & Johnson handled Tylenol crisis in early eighties. James Bruke, the then CEO, led his team based on the direction provided by the J&J credo which places the company’s responsibility to customers above that of towards other stakeholders such as employees and shareholders.

Through all the preparedness leaders clarify "how and what to do". But when confronted with crisis, leadership is about “how to be” rather than “how and what to do”.

The challenge of a crisis is an ultimate test of leader’s character.

A trigger for change
Anticipating crisis is a matter of strategic planning and risk management, but each crisis that manifests itself, must be dealt with adeptly by leaders, who also must consolidate the lessons learnt and communicate the same to the people as organizational learning and thus drive sense for initiating change in the organization.

The figure above shows how the cycle of identifying crises, managing them, and more importantly extracting learning from the act of managing the crisis and communicating the learning as a trgger for initiating a change programme to overcome the vulnerability of the organization can take the organization to higher orbit of maturity and performance.

Related articles:
Leadership and organizational values
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