The age old adage, “failing to plan is planning to fail” has become the mantra for every manner of “continuity” and “crisis”. Certainly, it is better to be prepared in an “All Hazards” fashion with a contingency plan based on a business triage / resource allocation model. But what happens when a business is simply unprepared for a crisis? How does management handle an event that is so novel that it could not be anticipated?
History is rife with stories of the unexpected and leadership legends who navigated their corporate ship to success despite adversity. If you are to thrive through your unanticipated crisis follow in these six footsteps of greatness:
- Don’t panic
- Use common sense
- Work smarter, not harder
- Don’t wander
- Seek help
- Mitigate outrage
Don’t Panic
This is easier said than done, but it is fear and panic that renders even the best leaders to act for the sake of acting. In the midst of a crisis, the first action is to observe. Crisis management involves gathering information on five levels:
- Macro-Strategic (The view “from 10,000 feet”)
- Strategic (The view “from the rooftop”)
- Operational (The view “from the street”)
- Tactical (The view “from the trenches”)
- Micro-Tactical (The view through the eyes of the employees)
It is not until this information is gathered that the full extent of the crisis is appreciated. Unfortunately, the nature of crisis is that it is dynamic and left unanswered, tends to worsen.
Use Common Sense
All too often observation becomes “analysis paralysis” allowing a crisis to deepen irrevocably. Common sense dictates that if there is an obvious action that will stem the evolution of a crisis, that action must be taken. Further, common sense leads to the inescapable conclusion that the rules of business and the laws of nature do not change in a crisis, thus acting in a way that makes no sense when there is no crisis is unlikely to be productive during a crisis.
Work Smarter Not Harder
Disney’s Scrooge McDuck counseled his nephews to “work smarter, not harder.” While business leaders may feel uneasy about taking advice from a cartoon character, the message is paramount when facing a crisis. Leaders know that the smartest way to work is to rely on past success as a blueprint for future success. This requires a form of thinking often mislabeled “gut” or “instinct” in an attempt to describe pattern recognition. The two forms of pattern recognition are:
- Past Pattern Matching
- Heuristic Deduction
Past Pattern Matching is the act of matching the current situation at all five levels of observation with prior situations. The best matches are predictors of the outcome of repeating prior actions. If a prior action led to prior success, repeating that action should result in success now. Conversely, if a prior action led to prior failure, that is an action to avoid. Malcolm Gladwell wrote of this type of very teachable nonlinear thinking in his book “Blink!”
Heuristic Deduction is another teachable form of nonlinear thinking. Heuristic deduction is literally the act of mentally walking a mile in the shoes of another. Through the techniques of heuristic deduction it is possible to infer the needs and even responses of others based on your own needs and responses when in the same situation. Heuristic deduction required two skills, empathy and bias recognition, but once these are mastered, heuristic deduction is an automatic human response.
Don’t Wander
Although primarily a pre-crisis planning strategy, Business Triage is also useful during a crisis. Business Triage is a strategy for prioritizing goals, outcomes and processes then allocating resources in an objective fashion based on relative importance to those goals and outcomes. The first step is to identify and categorize the desired outcomes:
– Critical/Essential Outcomes – Those that must occur to meet the overall mission
– Urgent/Important Outcomes – Those that facilitate, but are not essential to the mission.
– Supportive/Optional Outcomes – Those that facilitate, but are not necessary to the mission.
Once the outcomes are classified, identify and categorize the processes that result in the desired outcomes:
– Critical/Essential Processes – Those essential to the desired outcome
– Urgent/Important Processes – Those that facilitate, but are not essential to the outcome.
– Supportive/Optional Processes – Those that facilitate, but are not necessary to the outcome.
Graphically:
| Critical/Essential Outcomes | ||
| Critical/Essential Processes | Urgent/Important Processes | Supportive/Optional Processes |
| Critical/Essential Resources
Urgent/Important Resources Supportive/Optional Resources |
Critical/Essential Resources
Urgent/Important Resources Supportive/Optional Resources |
Critical/Essential Resources
Urgent/Important Resources Supportive/Optional Resources |
| Urgent/Important Outcomes | ||
| Critical/Essential Processes | Urgent/Important Processes | Supportive/Optional Processes |
| Urgent/Important Resources
Supportive/Optional Resources |
Urgent/Important Resources
Supportive/Optional Resources |
Urgent/Important Resources
Supportive/Optional Resources |
| Supportive/Optional Outcomes | ||
| Critical/Essential Processes | Urgent/Important Processes | Supportive/Optional Processes |
| Supportive/Optional Resources | Supportive/Optional Resources | Supportive/Optional Resources |
Essential/Critical Outcomes are fully supported first with all available resources, then Urgent/Important and finally Supportive/Optional. This process ensures that the organization does not wander from the path to the desired outcomes and goals.
Seek Help
Don’t go it alone. There is strength (and creativity) in numbers. Although this should go without saying, it is essential that when a crisis strikes, an organization seek consultation with experts in the management of the crisis and in the communication of risk to keep the crisis from becoming a public relations catastrophe.
Mitigate Outrage
The difference between setback and crisis is outrage. Paul Sandman first described this characteristic of business adversity over three decades ago. The newest rendition of Sandman’s Law is known as the PIVOT analysis (see sidebar). The most interesting thing about Outrage is that it is the greatest predictor of public sentiment and the only factor a business can modify. Outrage is the difference between Expectation and Perception, thus by managing Expectation, a business can mitigate Outrage and thus change public sentiment.
Failing to Plan is not Planning to Fail
While it is always better to plan for success and prepare for crisis, by following in the six footsteps of past legends, a business can still find success.
Sidebar Item
. PIVOT stands for:
P = Probability
I = Impact
V = Vulnerability
O = Outrage
T = Tolerance
Each component places a numerical value on the factors that determine public sentiment.
Probability
The likelihood of an experience occurring (0% to 100%)
Impact
The impact of an experience (positive or negative) on a scale 0 to 3
(0 = None; 1 = Minimal; 2 = Moderate; 3 = Significant)
Vulnerability
The susceptibility to the impact on a scale 0 to 3
(0 = None; 1 = Minimal; 2 = Moderate; 3 = Significant)
Outrage
The perception of the experience on a scale -3 to 3
Outrage is a calculated value based on Expectation and Satisfaction.
Expectation = Perception of what reality SHOULD BE on a scale 0 to 3
(0 = None; 1 = Minimal; 2 = Moderate; 3 = High)
Satisfaction = Perception of what reality ACTUALLY IS on a scale 0 to 3
(0 = None; 1 = Minimal; 2 = Moderate; 3 = High)
Thus:
Outrage = Expectation – Satisfaction
Tolerance
The public sentiment regarding the experience.
To calculate Tolerance, first calculate Hazard and Risk.
Hazard = Impact + Vulnerability
Risk = Probability x Hazard
= Probability x (Impact + Vulnerability)
Tolerance is then calculated, noting that if Outrage is a negative number, the positive number (absolute value) is used.
Tolerance = (Risk)|Outrage|
When Outrage is zero (Expectation = Satisfaction), Tolerance score always equal to 1. (Mathematically, any number raised to the power of zero equals 1).
When Outrage is a positive number (Expectation > Satisfaction), Tolerance score is a reflection of the Anger.
When Outrage is a negative number (Satisfaction > Expectation), Tolerance score is a reflection of the Enthusiasm.
Put simply Tolerance is Risk raised to the power of Outrage.
