Management During a Corporate Crisis

During the Midwest floods in 1993, White Star Textile Services in Des Moines found itself faced with an ironic situation. The encroaching flood waters had shut down all six pumps at the local water plant and there wasn’t even enough water to flush toilets, let alone process 100,000 pounds of laundry each week. The situation was expected to continue for some time. White Star implemented a plan to truck laundry to two sister plants in other towns, but it was not sufficient. The company desperately needed water. White Star employees rose to the challenge. A maintenance worker who lived on a farm on high ground had a well and allowed the company to draw 2,000 gallons of water to keep the boiler running. Other employees worked overtime to keep up with the demand. Others kept track of which roads were open or closed and helped expedite customer deliveries. Despite being without water for more than a month, White Star never missed a single day of customer service.

A Team Approach

The story of White Star points out the importance of a team approach to crisis. Success in a crisis hinges on leadership and decision making, but those decisions are best made when informed by trusted advisors and implemented by capable people. To be an effective leader, the support of a good crisis management team is absolutely critical. The importance of a strong support team becomes apparent when you consider the three phases of decision making in a time of crisis.

1. Information collection and analysis. The early stage of a crisis is characterized by confusion and uncertainty. The immediate cause of the crisis may or may not be evident and the long-term impact—the true nature of the crisis—is usually obscure. An organization that can quickly gather and analyze information about the crisis and display it in a way that can be readily used by decision makers has a distinct advantage. It is critical, therefore, to have people who know what kinds of information to collect and where to find it.
2. Decision time. Once crisis leaders feel they have enough information, they begin the process of considering options and developing an action plan. This process benefits from input from people who understand the nature of the crisis and are intimately familiar with the organization, its customers and its supply chain.
3. Implementation. Having a sound plan is meaningless if it cannot be implemented. This will require support staff to obtain resources, direct the operations of employees and communicate with customers and vendors. The job is just too big for one person.

Building the Team

Building a crisis management team is not complicated if you add on to day-to-day problem solving. A common mistake is to develop a team that only meets during a crisis. A much better approach is to use the people you rely on each day, who are used to working with each other and, most importantly, trust each other. There are four questions you should ask when developing your crisis management team.

1. Who do you trust? Successful managers surround themselves with people they trust. These are the people you turn to for everyday problems, the people whose opinion you seek on new ideas. Most importantly, they’re the people you will listen to when they tell you what is wrong. These trusted advisors are the most likely choices to form the core of your crisis management team.
2. Who do your employees trust? In any company there is a formal organizational structure and an informal one. The closer these two mirror each other, the more efficient the company. This informal structure is represented by employees whom other employees look up to and trust. While these individuals may or may not be added to your crisis management team, they can be used to measure the pulse of other employees, act as conduits for information and help implement your action plan.
3. What skills will you need? Some people are obvious choices for your crisis team, such as your management team. But you should also consider others who may not be so obvious. For example, many crisis management teams neglect to include people who interface with customers and suppliers on a regular basis. Administrative personnel are usually not included, nor are human resources staff. Not all of these people need to be decision makers, but they can provide important advice and suggestions.
4. Who has the information? Information is the cornerstone of decision making. Some of that information is internal. Do you know where to find it? For some problems, a maintenance person with intimate knowledge of a plant’s operating systems might be more useful than the manager who supervises him or her. What about external sources? An employee who has built a solid working relationship with public safety agencies or your insurance company can get information that is not always available through the media. Speaking of which, who will monitor broadcast and social media?

A crisis management team should not be only for crisis. It should be comprised of the people you trust and rely on for normal operations and problem solving. Augment that core group with the additional staff and skills you need as a crisis escalates, and you significantly improve your ability to manage a crisis situation.