BRAZL-A word on crisis management

Keeping your head when all about you are losing theirs

A crisis is usually little more than the realization or materialization of unmanaged or unknown risks. I have worked with several companies on resolving all manner of crises ranging from the kidnap of a senior executive to major fraud, to screwed up product launches or product defects, and logistical nightmares, among others.

The first rule of crisis management is “Don’t Panic”. You need to get a firm grip on the nature of the problem and its extent. If you simply run off responding to each and every “sub-crisis” (and there will be many), you will wear yourself out in short order.

You could also generate additional sub-crises without intending to.

The second rule is to have an emotionally balanced and highly qualified crisis management team. Some issues require immediate attention while others can be allowed to fester a bit before applying an appropriate remedy. Tension and pressure are “givens” and you have to respond to them appropriately.

The third rule is to ensure that the team can objectively evaluate issues through the fog of chaos that invariably accompanies the acute phase of a crisis. That is a moment when it appears that everything depends on everything else and is synonymous with “model chaos”. What might be a correct response could spark a reaction that seems to reflect a wrong decision only to later prove to have actually been correct. You need patience.

Fourth, you have to remember that the press will be all over you like white on rice. You need to get your message across that a qualified team is looking at and responding to the crisis. The press conference of Finance Minister Meirelles was a clear example of proper response. He made it clear that he did not have all the information he needed to resolve the issue at hand but clearly demonstrated that he was in control and that a proper solution would be enacted ASAP.

If you happened to see that press conference, you will have noticed: 1) that there were decidedly few substantive questions from the press; 2) that Meirelles patiently addressed the questions; 3) that he was “unflappable” in his responses; and 4) that he was comfortable that he would resolve the crisis once he had a clear view of the magnitude of the problem. In short, he was “on top of it”. No one challenged that view even if their anxiety was not fully assuaged.

In anycrisis the knowledge that competent people are in charge will suggest that resolution is possible and likely even if it requires a good deal of time.

Finally, it is a maxim of crisis management lore that every crisis will eventually be resolved even if left unmanaged. As I have written before, Economist Herb Stein observed that what cannot go on forever will not. However, the managed crisis stands a far greater chance of being resolved in a manner that is satisfactory to the stakeholders while an unmanaged one might not! So, the 5^thand final rule is: Don’t just stand there, do something! And it is useful to remember that sometimes doing nothing is actually doing something.  Without the nothingness of windows and entryways you cannot have the use of a house! Without the emptiness inside a cup or a glass you cannot have the use of the vessel to drink your coffee or (hopefully) your whisky. 

There is nothing very comfortable about a crisis or its management. The pressure to act immediately is enormous and can lead to wrong decisions and no qualified executive wants or likes to make wrong decisions. That's not what he/she is paid for. As the president of a large MNC in Brazil once said to me, “I would give anything for an executive who instead of immediately running to resolve a problem would say, ‘Let’s think this through before we react’” This is the single most valuable way to deal with a crisis.