Stage 3: Recognizing the Crisis
THE CHIEF EXECUTIVE officer of a major corporation was alerted one day that the president of one of its subsidiaries—a film company—had been accused of embezzling money and forging checks. But the CEO refused to believe that the film-company president would ever commit such crimes. He ignored the problem, but it didn’t go away. By the time the CEO decided to fire the president, the charismatic thief had gotten board members lined up on his side. The board insisted on keeping the president. The situation worsened, with reports coming out in the paper tarnishing the name of the film company, the corporation, and all involved—including the CEO. It was an ugly, painful crisis. And it could have been avoided if the chief had recognized it as a potential crisis and dealt with it promptly.
Like this CEO, many managers don’t want to face unpleasant situations. Unfortunately, unpleasant situations can be signs of an impending crisis. Pay attention to that voice inside you that says, “Uh-oh, there’s something wrong!” The CEO must have been very disturbed when he found out that his film-company president was accused of embezzling. But he rationalized the event by telling himself that what he had heard was impossible.
Is it a crisis?
On a day-to-day basis, managers learn of many disturbing facts and events. Instead of trying to ignore them, rationalize them, or minimize their importance, turn around and face them. Take a minute to step outside yourself and question the event and its consequences.
First, characterize the event. Use the checklist shown in the table “Is it a crisis?” to determine whether you’re dealing with an impending crisis.
Second, evaluate the size of the crisis. Once you’ve realized that you are dealing with a crisis, determine its scope and magnitude.
| Is it a crisis? | ||
|---|---|---|
| Has the event in question caused, or does it have the potential to cause . . . | Yes | No |
| Injury to any person? | ||
| A threat to the health or safety of any person? | ||
| A threat to the environment? | ||
| A breakdown in your company’s ability to serve customers or a threat to your company’s reputation? | ||
| A serious threat to employees’ morale and well-being? | ||
| A loss of data? | ||
| Serious financial loss? | ||
| A legal action against your company or an individual associated with it (employee, subcontractor, partner)? | ||
| Interpreting your score: If you answered yes to any of the above questions, you are probably dealing with an impending crisis. | ||
Quickly gather as much information as you can. Ask yourself questions such as the following:
- How many people are involved? Who are they?
- How long is this likely to last?
- Have any laws been broken? If yes, which ones?
- Who already knows about the crisis? What do they know?
- Who needs to know?
- What are the costs already in terms of health? Money? Reputation?
Third, self-reflect. Evaluate how you might manage the situation. Are you someone who tends to underreact? If so, maybe you need to become more concerned. Or do you have a tendency to overreact? If yes, you may need to calm down.
Fourth, consider your values. What is important? What is the right thing to do? For example, if an employee is breaking the law—and using the company to do it—what is your responsibility? Or if a subcontractor is disposing of toxic waste from your company illegally, harming the environment and possibly endangering lives, and you suspect the company is turning a blind eye to it, what should you do?
If it is a crisis, how will you deal with it?
Suppose you’ve decided that you do have a crisis on your hands. What do you do? You may have to deal with some aspects of the situation immediately, but you will also need to come up with a flexible plan for dealing with the crisis’s short- and long-term effects. The following strategies can help:
- Get a team in place. Assemble your crisis-management team as quickly as possible. Depending on the scope of the situation, members of the team may need to be assigned to the crisis full-time. If the crisis is big enough, or of long enough duration, you may need to pull the crisis-management team off some or all of their regular duties. If you have performed a crisis audit, then your team members will already know what their roles are and how to communicate with each other.
- Get the information you need. Throughout the crisis, you’ll need key information about what’s happening—as it happens. You’ll need to ask the right people the right questions. Work with your team to make sure the information keeps flowing. You’ll also need to make sense out of the information you get. Sort out what’s relevant and what isn’t, what’s important and what’s trivial. It’s easy to get bogged down in details, so step back every now and then, and take a broad view of the situation.
- Get a sounding board. At this phase of the crisis, it’s also important to have a sounding board—a person you can trust who will help you talk through ideas, information, and decisions.