JAMES E. LUKASZEWSKI, founder of the Mount Kisco, N.Y.-based Lukaszewski Group Inc., which advises, coaches, and counsels leaders of large corporations and organizations through extraordinary problems and critical circumstances
There are two key words for dealing with bad news: one is readiness, the other is process. Both matter because, as we often see, bad news generates bad stories and information. Bad news ripens chaotically. Looking at poor crisis response performance, in the cold light of hindsight, reveals at root risk management failure.
As we've seen in every recent major, high-profile crisis, whether it is BP, Toyota, Johnson & Johnson (the former paragon of virtue), AIG, Goldman Sachs or the firing of General Stanley McCrystal, the most devastating damage inflicted comes from within the organization itself or its leadership, rather than from external forces and sources.
Let's be clear. A crisis is a people-stopping, show-stopping, reputation-defining, trust-busting event that creates victims and explosive visibility. The operative word is "victims."
About 75 percent of crisis readiness is having an up-to-date list of contact people. Another 15 percent is preauthorizing key people to make decisions. And 8 percent is tied to doing drills and practicing. The last 2 percent is always surprise--and every crisis has some surprises. The key is to get yourself ready.
Ninety-five percent of crisis situations happen as a direct result of operating situations, the things your organization does every day. Because of this and the presence of knowledgeable individuals and organizations able to respond to these operational aberrations, there is a very low risk to your reputation or that of others, even with high levels of damage. These incidents can go away pretty quickly if handled properly and promptly.
The remaining 5 percent of crisis situations are of nonoperating problems, such as sexual harassment, deception, fraud, employee violence, theft and other circumstances rarely taught in management schools. The problem with these crises is that, too often, we learn on the job how to handle them.
The risk impact of these highly emotional situations--where victims drive reputation destruction along with the behavior of public officials and other survivors--is enormous, costly and destructive. Other situations in this 5 percent category include nonoperating problems like unethical behavior or online/new media attacks, accusations or bullying.
Disasters, at least at first, are perceived to be beyond human control. They become human problems when the response fails (such as with Hurricane Katrina). There are also man-made disasters (such as the BP oil spill in the Gulf of Mexico), but here again, the enormity of the problem and the inability of the company to deal with the crisis, much less having prepared for such a catastrophe, will make it one of the major crisis and risk management failure examples of all time.
The risk management lesson in these examples is to recognize that the most powerful risk factor in a crisis is victim behavior. Victims drive the visibility, energy, and sometimes response craziness. Victimization is a self-designated state--and becomes evident when a person goes to the press or hires a lawyer or joins a support group that targets you or your organization rather than dealing with their situation directly. It is also self-maintaining and self-terminating. It's really important to understand these elements. Once the process begins, it and the blame of others can last forever.
Victims use characteristic vocabulary, words such as abandoned, betrayed, helpless or hopeless. They are marked by an "intellectual deafness" that blocks new information, and are consumed 24/7 by their pain and suffering for a long period of time. It is the victims' capacity for total focus on their victimized state that makes them so powerful over even the best people and organizations. Anyone who can be energized 24/7 has a lot more power than those who can't or won't.
Because victims are dominated by their emotions, they keep asking questions: "Why did this happen? Why wasn't I warned? Whose job was it? Why wasn't it planned for?"
What they deserve is respect and positive, declarative responses. Failure to continuously answer and to show respect is what escalates the risk of lawsuits. Failure to respond at all makes people angry. The best approach is to identify likely victim questions in your readiness plan and create answers. Failure to offer some answers promptly makes victims suspect you're hiding something. And because they are intellectually deaf, you'll have to keep answering the same questions again and again.
Communication is the most important leadership tool you have for managing employees in a crisis too. For every question you answer in an urgent or contentious situation, six people who are concerned about it quit caring and go about their business. Answering questions detoxifies situations; failure to answer can be toxic to you and your organization.
To manage the reputational risk victims present, you'll need learn more about what victims need to begin recovering. To heal, victims need validation of their injured state, preferably by the perpetrator; if not, they may hire an attorney or go to the media. They need visibility, often through the news media, and increasingly through new media techniques--to talk about their pain and warn others about the person or organization that caused it. They need vindication, specific, concrete action that conclusively shows that the cause of their situation has been remedied. They then take personal credit for preventing harm to others.
Most of all, they need extreme empathy. An apology is even better: apologies are admissions of responsibility for what went wrong. Apology has become hugely important in our culture. In the healthcare arena, for example, some insurance companies are requiring physicians and medical groups to apologize immediately to patients suffering adverse medical outcomes to avoid malpractice suits. A number of websites offer advice for making apologies and managing victims (e.g., theperfectapology.com, sorryworks.net).
Every crisis response approach needs to be grounded on a five-point grand response strategy, driven by the "golden hour." The five actions are:
Action 1: Stop the production of victims.
Action 2: Manage the victim dimension.
Action 3: Communicate directly with employees and critical constituencies. Give people 75-word information bursts promptly, even frequently, and speak with some regularity. Manage the story and the script.
Action 4: Notify those indirectly affected, such as allies, partners, shareholders and other affected agencies.
Action 5: Deal with the media and self-appointed groups and individuals.
All these steps must be undertaken in the first golden hour or two. The quicker your multilevel response gets underway, the risks of costly mistakes and further substantial injury are reduced the crisis becomes more manageable. All your readiness should be driven by these five steps.
The golden hour is a medical treatment principle that comes from wartime medicine. During World War II, it was realized that the greatest cause of death, aside from infection, for wounded soldiers was blood loss, usually while they were waiting for or being transported to treatment. A radical new approach was taken to move surgical suites to the frontline as opposed to having them always in the rear areas. What was learned was that wounded soldiers given extremely crucial medical care to control bleeding within the first hour of their injury had extraordinarily high rates of recovery. Thus, the golden hour for crisis management: the appropriate remedial and pre-emptive strategies applied promptly--even instantly--reduces the risk of additional adverse outcomes.
One extraordinary timesaver and adverse visibility risk reducer is to create "dark" Web pages, each organized to provide information for a specific possible crisis. Store them on your server, ready to go live in an instant.
Recognize the irrationality of crisis. You have heard the claims before, usually from frustrated angry, disbelieving bosses, that "crises are completely senseless," that "victims make irrational and outrageous demands" or that "the media go crazy, making things up."
All can be true. But so what? That is the way it is. That is the way it is going to be. The answer? Get good at being ready. U
Apply these risk-reduction readiness tests to all your response strategy, planning and decision making:
1. Does this action reduce or enhance your exposure to litigation, reputation damage, ridicule, public humiliation or adverse media exposure?
2. Do these words reduce the risk of adverse victim reaction, survivor response, or the creation of new critics and antagonists?
3. How do these strategies reduce the risk of additional collateral damage or the creation of additional threats, or add to the complexity, slowness or inefficiency of your response?
Every crisis follows the patterns of previous similar incidents. Study these patterns and you can forecast the future. Yes, the media will humiliate you, at first. Public officials will run toward the victims. Many of your initial responses and explanations will be doubtful, erroneous and futile, and you're going to make mistakes. But, when you can forecast the future based on known past patterns, you can better manage, anticipate and perhaps even pre-empt many of the most likely risks. In fact, you are likely to be right at least half of the time, and in any crisis, that's a pretty big risk-reduction batting average.
October 1, 2010
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