Crisismanagement

After the Crisis the Turnaround – Beyond the control of damage control

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Author: Eric Van den Broele

To my knowledge, this book has only been published in Dutch. (Na de Crisis de Ommekeer – De controle van de damage control voorbij) That is a pity. Yet I translate the summary because of the ideas in the book. It has a lot of them. I state some of them here.

An instrument during Covid19 was to financially support the organizations to continue to pay the wages.

The question: ‘How long can an organization survive after a crisis without external help?’ has therefore remained unanswerable.

No one has a crystal ball, but support measures can be given to financially survive. They must be distributed with wisdom. To this end, a so-called ‘shock resistance score’ (https://graydon.be/nl/resources/blog/strategie/hoe-maakt-u-echt-impact-met-de-schokbestendigheidsscore) of the organizations must be examined. The question is whether the organisations that were no longer really viable before the crisis are still ‘entitled’ to a survival support measure. To this end, it is insufficient to simply follow the statistics of artificial intelligence: a circle of wise men (experts) must examine these cases piece by piece, in order to make a weighted and supported decision.

Such a shock resistance score has more possibilities than during a major crisis. Even if a mayor has plans to redevelop a town square, the shops must be able to survive. However, they then have to go into a kind of ‘lockdown’ and lose sales. If the works take too long, they can go under. On the basis of a shock resistance score, the Mayor can document himself in advance and plan to prioritize the financial support from the start. And he can determine the budgets to guide those stores through the difficult period.

There are also ethical issues associated with this: if an organization’s shock resistance score is poor, suppliers may be able to cautiously refuse to deliver unless payment is made immediately.

But the knife cuts both ways: the government can also demand that the legal reserves be expanded by the organizations, just to increase their shock resistance score. Currently, this should be 10% of the capital. Failure to check this leads to non-compliance, which de facto weakens the competitive position of the organizations and therefore of the region.

After a crisis in which large government support was used, a recession can follow. Unbridled giving money cannot last. So choices have to be made. Balance must be sought, with social and societal justice. A crisis exposes anomalies. This raises questions

  • What do we want to do with our society?
  • Are we aiming for unbridled entrepreneurship with freedom – happiness?
  • Or entrepreneurship with sustainability, attention to the environment and society?
  • What do we support ?
  • Do we continue to aim to create more and more jobs by organisations, or do we look at sustainable, fulfilling work with future prospects?
  • Do we want companies with strong shock resistance?
  • What about companies with holdings abroad? Are we going to continue to make those holdings richer?
  • Is it time for a conversation with the private about how to do this? How do we have that conversation?

So questions are about

  • Hallmarks of undertakings
  • The impact on companies
  • What direction we want to go in as a society.
  • What do we do with companies that are on the verge of bankruptcy before the crisis?
  • What about start-ups in turbulent water?
  • What about shock-resistant companies that were little affected by the crisis? What about their mortgage? Their investments?

The government must make the right social choices. To this end, data mining is super important. Belgium is more equipped in this respect than neighbouring countries. It can order studies to know the effect of the measures in great detail. This provides post-crisis a number of lessons learned that in post crisis can help prepare a next crisis with rescue plans. To this end, intangibles can also be measured indirectly. Research into intangibles is needed to stimulate innovation and detect crime during and after the crisis. By working together regionally with the federal (justice) department, you create the test ground to find out how best to dose the approach for companies.

This data mining can also be used to determine the effect and effectiveness of the support measures: which support measures have worked to what extent. Which companies receive which support during the reconstruction? Which ones don’t ?

In addition, the government must continue to activate dormant savings. This requires trust. For example, with funds whose units are insured against a decrease in the value of the fund. Inclusion is important.

Focus on SMEs that develop technology that promotes environmental well-being.

Extra credit via payment term of 90 days instead of  30. With a tax advantage slightly higher than the loss of profit. This provides continuity in the customer portfolio, goodwill, loyalty, retention for supporting entrepreneurs.

Encourage to put financial surpluses into loans to customers or suppliers. Or to take minority participations.

The government as a business angel? (Is that possible?)

Symbiosis with organizations from other sectors: vans that are now half empty…

A third dimension is therefore, in addition to quasi-bankruptcy pre-crisis or during the crisis, also whether the company was not only economically healthy, but also socially responsible companies. Whether they can become later.

Check, among other things, whether the customers are activated.

  • Where do you give the right financial injections?
  • Where do self-reinforcing chain reactions occur?
  • How do we achieve maximum effect?
  • How do we limit the Flemish dependencies that come to the surface during the crisis?

In this way, among other things, make the crisis a catharsis.

Benchmarks for (only) a first direction are those of the nine-grid of Graydon.  (https://graydon.be/nl/ITAA-YourInsight)

We learned that we depend on long logistics chains, that we are dependent and vulnerable, that our economic credo is not shock-proof, that decisiveness is lacking, that local trade was creative, that web technology is powerful, that social cohesion in many neighbourhoods has become stronger, that commuting has been questioned, that a new approach to the working environment was possible…

Furthermore, incentive of equality is necessary for effective better prosperity. Otherwise, the rich will become richer, the poor poorer, with all the consequences for social robustness. To this end, the dissemination of knowledge is necessary. That doesn’t happen spontaneously. This makes one stronger. Organize learning how to make connections and associations, avoid specializing too quickly. E.g. through a course ‘overarching consideration’. Show common ground between sciences, between abstract thinking and everyday experience. Teach them to reflect on the environment, on themselves, on their future. (Jacques Attali: ‘Peut-on prévoir l’avenir?’ 2015)

In addition, a self-confident region in a self-confident Europe is needed to stand stronger. To this end, the growth capabilities must stimulate people to know and acknowledge their own values. Belief in one’s own abilities, interest in the other…

For this, four tools are needed: social structure or governance format, communication, technology and economics.

In terms of leadership in the crisis, it is necessary post-crisis to rethink the structures and their power:

  • What was helpful?
  • What was pointless?
  • What was bothersome?

In terms of institutions, one must therefore check which ones can be renewed, which ones have to grow, which ones have to shrink and which ones are allowed to leave.

In order to organize society, economy and technology for the people of tomorrow, we must therefore prevent or counteract the far-reaching brain drain from our region (Flanders).

In addition, our region must support its social cohesion. Tackling ‘the others are wrong’ thinking, tackling human (social) poverty (not the lack of prosperity alone). To this end, it must stimulate binding action and communication. That starts with connection in neighborhoods. The aim that everyone is involved and takes responsibility. Ask how to engage people from other communities. Decision-making at subsidiary level based on interests. That creates

  • Chances
  • Social cohesion
  • Hope
  • Creativity
  • Integrates cultures

This can only occur in the long term, thanks to a long but sustained lead time. The state should not be a dogma. The state must create opportunities that correct unevenness of opportunity.

In terms of economy, re-shoring is needed. It is equivalent to securing our supply, control over the flow of goods and services. About its quality. Shorter transport links. It is more efficient and cheaper in the long run. Consequences can be: better air quality, decongestion of our roads and more circularity.

Then there is the issue of the failing entrepreneur. It must be able to restart; instead of seeing him or her as a kind of criminal, see him or her as someone who can learn from his or her experience. Or accompany him or her to paid employment.

With technology you can do a lot in terms of artificial intelligence. However, it is also dangerous relative to GDPR and human rights.

All this is to be resilient. This is necessary for the organizations and our region to be able to meet the others in full confidence and respect.

Strategic communication in crisis management – Lessons from the Airline Industry

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Author: Sally J. Ray

The context of plane crashes is a central example of what threatens the legitimacy of the airline, its image and reputation, and the financial situation. It has a tendency to transmit across the industry, hitting not only the victims and the airline, but also the stakeholders. The aviation society must therefore protect its long-term interests and public image. To this end, an effective communication plan is critical. This can be built up according to the course of a crisis in three phases: pre-crisis, crisis and post-crisis. Furthermore, it should be borne in mind that the crisis extends to more than just the organization. It is a system with many interdependent variables, so focusing on only part of the system is limiting our understanding of the crisis and the communication involved.

In a plane crash, trying to understand the necessary communication raises a number of questions: which factors influence communication? How do these factors define the boundaries of the organization’s efforts to repair the reputation damage and resolve the crisis? Which communication strategies are the most effective? Which variables influence that effectiveness? How can an organization prepare to manage one of the crisis?

To effectively address the effects of a crisis, managers must understand its nature, management rules and the implications of right and wrong communications. This provides a sense of predictability and expectations when a crisis occurs.

Throughout the story, theory and practice are intertwined. The practice consists of a number of drawn-out cases of plane crashes, in which the communication is dissected in a “ scrutinizing ” way, each time identifying a number of crystal-clear lessons.

The six most important lessons of strategic communication in crisis management from the aviation sector are perhaps :

  • A key to effective crisis management is the development of a responsible organizational culture that values ​​safety and is sensitive to the dangers of its operational operation.
  • Planning for crises reduces some of the uncertainty associated with managing a crisis; however, crisis managers must anticipate the challenges of applying a rational plan to an irrational situation. This requires a 360 ° view: people with different backgrounds, education and interests must be recruited or a great deal of education and training must be provided.
  • An organization in crisis must communicate from the beginning that it is in control and is concerned about the situation.
  • An organization must be sensitive to stakeholder perceptions of the actions and reactions of the organization during the crisis.
  • The media attention determines the seriousness, significance and direction of the crisis and is directly reflected upon the organization’s image; therefore crisis managers need to have a very good understanding of the journalistic processes in covering a crisis.
  • When an organization defends its position or image, its strategic communication choice must be determined against the background of this unique crisis situation.

The Intelligence Trap – Revolutionise your thinking and make wiser decisions

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Author: David Robson

Very important in making decisions is a psychological view of one’s own leadership. Namely a view that prevents you from falling for the “intelligence trap”. What exactly is that?

In fact, the intelligence trap is a direct result of some people’s inability to think outside of their expectations, to come up with an alternative view of the world where their decision is wrong rather than right. People with very high intelligence are more subjected to this than people with moderate intelligence. Nobel laureates sometimes suffer from this, so often that there is a term for it: “Nobel disease ”.

An active intervention to this pitfall can make use of so-called “ evidence- based wisdom ”. This can be imparted to all ages and to anyone, although one is more likely to benefit from it with moderate intelligence.

A first step is to understand what wisdom is. A definition of “wisdom” is: “he is wise who recognized the limits of his own knowledge” (Socrates) . Apart from that, good factual knowledge and training remain important.

Very dangerous is the fragility of the expert. For example, by relying heavily on schemes and protocols, which one must have, he may have trouble adapting to changes in the environment. Flexibility is therefore important. Personal bias is also a problem. One step towards a solution is to adapt the own thinking. This can already be done by reading about it, with inspiring examples. Placing a beginner with another, detailed, view is also an advantage because he or she does not yet know the patterns and therefore sees and can indicate differences in details of the case with regard to the general rule. It can also be done by taking a distant position. An example of this is the listing and quotation of important aspects of a situation or object, spread over several days. In addition, being able to listen to your own emotional compass is an advantage. This has to do with being able to relate the events in your environment and your (gut) feeling in the right way. After all, being able to spot deliberately crafted bullshit is a necessary skill. To this end, the author provides a list of some methods by which false truths are sometimes told.

What can save us from the pitfall are: cognitive reflection, intellectual humility, active “open- minded ” thinking, curiosity, refined emotional awareness and a “ growth mindset ”. We find these things in the nine virtues of the Intellectual Virtues Academy. These are divided into three categories as follows:

Getting started

Curiosity: the opportunity to be amazed and to investigate and ask the “why” question. A thirst for understanding and a desire to explore.

Intellectual humility: the willingness to recognize one’s own limits and mistakes, regardless of intellectual status or prestige.

Intellectual Autonomy: Having the ability for active autonomous and self-guided thinking. The ability to reason and think for oneself.

Executing well

Attention: to be there with your thoughts 100% on the matters of the learning process. Keep distractions at bay. Be with the thoughts and commitment completely on top of the topic.

Intellectual carefulness: the ability to notice and avoid intellectual pitfalls. A commitment to accuracy.

Intellectual thoroughness: the ability to seek and find explanations. Dissatisfaction with rather apparent or superficial and (too) simple explanations. Reaching for a deeper meaning and understanding.

Handling challenges

Open- mindedness : an capacity to think outside the box. Responds honestly to competing perspectives.

Intellectual Courage: Being ready to persevere in thinking or communicating with the risk of fear of being embarrassed or of failure.

Intellectual tenacity: a will to face an intellectual challenge and struggle. Keep your eyes on the prize and don’t give up.

These aspects of the eternal learning mindset apply to an individual, but how do you put together a ‘dream team’? It depends.

If you have a team where everyone has to do things clearly separately, without overlapping job content, then you can use a team of top players: there is no competition.

If you have to put together a team of competitors, where there is overlapping job content , then it is important that they are not all toppers, only about 60% are toppers, but then teamwork, being in tune with each other, weighs more.

With a crisis team, any type of crisis team, it’s the best of both worlds. In a CRT (Crisis Respons Team), for example the company fire service team, it is clearly the second. At a CET (Crisis Expert Team, where a team member might handle a file from A to Z , it might be the first. But with the CMT (Crisis Management Team), where there is little or no overlap between the participants, but there is still a need to work together because people must be able to rely on each other’s results, it is a pure cross: you need 100% toppers, but they also have to be able to work with each other. In the latter case, intellectual humility is an issue, because in this team one often has to deal with high profiles who “know very well what they are worth”. Antibodies against this are exercises in which people learn to share information and are assessed on the integration of each other’s point of view in their own thinking.

A change of mentality that can be useful to contribute positively to this is to initiate discussions throughout the hierarchy, between the different layers of the hierarchy, and to recognize and hear people as experts in the field of, for example, their own ideas about occupational safety.

Also not to be ignored is the use of statistics from near misses. After all, it has been statistically proven that a serious event is preceded by a number of near misses. That was the case with the Challenger , with the Columbia, (NASA) but actually also Covid-19 was preceded by, among others, SARS and MERS. There was a failure to learn lessons and to implement them into the future, or to persist in these lessons learned. For that you need the mentality of a “high reliability ” organization. It has been shown for this type of organization (research by Karl Weick & Kathleen Sutcliffe ) that they exhibit the following characteristics:

Expect to Fail: Employees go to work and every day can be a bad day. But the organization rewards employees for reporting their mistakes.

Reluctance to simplify interpretations: employees are rewarded for questioning assumptions, and for being skeptical of the wisdom of others.

Sensitivity to operations: Team members continue to communicate and interact to increase their understanding of the situation and look for the actual origin of each anomaly.

Commitment to resilience : acquiring the necessary knowledge and resources to bounce back after a negative event. This includes the ‘pre mortems ‘ and the discussions of near misses.

Respect for expertise: here the open communication between different layers of the hierarchy is important, and the intellectual humility of those at the top.

Tribal Leadership – Leveraging Natural Groups to Build a Thriving Organization

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Authors: Dave Logan; John King; Halee Fischer-Wright

The authors indicate that you can recognize tribes  in your organization, and what level of culture these tribes can have. The latter you recognize on the basis of language use by the members of the tribe.

But first you need to know what a tribe is. A tribe is any group of 20 to 150 people who know each other enough to stop on the street and have a chat. They often correspond to the people in your email address book and your smartphone. Often a small company is a tribe, often a large company is a tribe of tribes. A small tribe (20 people) often has only one culture, a (medium to) large tribe (50 to 150 people) can have multiple culture levels at the same time.

Tribal leadership is leadership that focuses on the language and behavior within a culture. It does not seek to sharpen cognitions, beliefs, attitudes, or other factors that we can only measure indirectly. It does focus on language use, behavior and relationship structures. To start this leadership, the leader must start practicing two things:

  1. The tribes tell him their level of culture through their language use.
  2. Upgrading the tribes to a “higher” culture level.

The authors’ research shows that the use of the following vocabulary is typical of the culture levels:

Stage Mindset Word usage – examples
1 Life sucks – clusters of ‘gangs’ – alienation Life, sucks, interrupts, can’t, stop, whatever
2 My life sucks – clusters of apathetic victims – separated Boss, life, trying, can’t, give up, quit, sucks
3 I’m great – “lone warrior”, culture of the “wild, wild west” I, my, my, job, profession, do, did, have, went
4 We’re great – radiating tribe pride relations as a partnership We, our team, do, they, have, did, committed, value
5 Life is great – innocent wondering, relations in teams Wow !, miracle, happy, vision, values, we do.

 

In addition, they also provide a number of tools with which you can upgrade from a group of a “lower” culture level to a “higher” culture level. The success factors that you have to look out for are the words that the tribe will use during their evolution to a higher level. In doing so, the leader must again keep two things in mind:

  1. The tribe must rise systematically stage by stage, it cannot skip a stage.
  2. The tribe has to master the stage for a while.

Levels from level 1 to 2:

  • The person has to see it and want it. Go where the action is: eat with colleagues, go to meetings, take up social functions …
  • Encourage a break with others with a “life sucks” mentality

From level 2 to 3:

  • Encourage making friends in dyadic (two-person) relationships.
  • Encourage friendship with people in late stage 3.
  • Show her that her work makes a difference.
  • Show what her strengths are within her competences.
  • Show her growth potential that she still has to acquire, but keep it positive.
  • Give her projects that she can do well in a short time. Don’t follow it too closely.

From level 3 to 4:

  • Encourage triads (three-person relationships).
  • Let her get to know others with the same core values, discover corresponding interests, and find opportunities where they can complement each other in terms of work.
  • Encourage her to take on projects she can’t handle alone. So let her work with partners.
  • Show her that the success comes from her own work, but that the next step is something that requires a different style: collaboration.
  • Describe role models who focus on “we”, triads and group success
  • Tell about your own step from stage 3 to 4
  • Teach her that real power is not in knowledge but in networking. Make it clear that you are on her side.
  • Encourage transparency. Encourage her to tell more than what is absolutely necessary.

From level 4 to 5:

  • Ensure her triads are based on values, benefits and opportunities.
  • Encourage the use of market conditions to make history.
  • If the market doesn’t deliver anything, create an opportunity.
  • Recruit others to the tribe who share the values ​​of the group’s strategy.
  • If the team encounters difficulties, also refer to others for solutions. Do not try to solve everything yourself (that is level 3 behavior).
  • “Change the oil regularly” with the following questions: 1) what is going well, 2) what is not going well and 3) what can the team do about it?

 

Tribal leaders do their work for the good of others, not for themselves, and they are rewarded with loyal employees, hard work, innovation and collaboration. The tribe can complete more difficult assignments in a shorter time with a higher quality of finish.

Managing Outside Pressure – Strategies for Preventing Corporate Disasters

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Authors: Matthias Winter; Ulrich Steger

In Chapter 1, the authors offer a historical statement of the Nobel Prize Laureate Economy Friedman from 1962: “In a free society, there is one and only one social responsibility or business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” With that, organizations became dominant in society. But more and more people believe that today the same organizations are causing much of society’s problems. This creates groups of activists and they start to exert pressure. A number of questions follow from this:

  • What is the stakeholder concept and how can they influence organizations?
  • What is the difference between a “transactional” and a “contextual” environment?
  • How do we evaluate the situation from the point of view of the organization?
  • How do we evaluate the situation from the point of view of the activists?

The authors provide answers to these questions in the course of a number of chapters.

The “Stakeholders” can be an extensive number of groups: consumers, customers, competitors, employees, shareholders, environmental organizations, local communities, local authorities, suppliers, special interest groups, owners, the media, the legislature, scientists and researchers, banks, … they all have an interest somewhere in the results and the operation of the organization.
These can be divided into two groups: the transactional environment and the contextual environment: the first has some professional business relationship with the organization. Normally they can negotiate with the management about the rules for the transaction. The contextual environment has no direct market or business relationships.

There are also activists: these can be loosely classified into environmental activists, health-related activists and socially motivated activists. That way they are mainly in the contextual environment. How can they influence an organization? The authors describe this with “Transmission belts”. The first is direct pressure of protest. A second is the search for associates in the transactional group, for example the customers. This impact can cause the organization a financial hangover. They can also find supporters in the contextual environment, for example with the legislator. They can best use both, since the clients can work flexibly in the short term, while the legislator works more decisively with regulations but more in the long term.

In chapter 3 the authors talk about “Corporate Early Awareness Models”. They state that the traditional model of the stakeholder analysis is outdated. After all, a number of things vary over time: the agendas of the various stakeholders, the importance and influence of different groups, how the organization behaves in the sector, and social values. The new analysis models try to make the difference between early identification versus a late intervention. One advantage on the first is that you can avoid the difficult things so that they are no longer relevant. The second means that you as an organization do not waste time and energy on what is not relevant. In addition, it is good to make a distinction between strong and weak situations. Strong situations are best identified early, while weak situations can usually be dealt with later on. The strong situations run the risk of going through the following stages:

  • “concern”
  • “issue”
  • “crisis”
  • “scandal”

Because it can become a “scandal”, it is necessary to intervene quickly. Weak situations do not usually reach this final stage.

To make a difference between a “strong” and “weak” situation in a systematic way, the tool has been proposed by the authors, from the perspective of the organization. This covers the following eight sections:

  • Are the arguments against the issue plausible?
  • Does the issue cause emotion? Is this understandable – visually and touching – to the public?
  • Is the issue media friendly?
  • Are there links with other issues of the organization or of other involved organizations or within the sector?
  • How strong is the “key” activist group?
  • How isolated is the organization?
  • How far have the dynamics of the crisis already developed?
  • How easy is it to find a solution?

To complete their “world view”, however, the organizations also need a picture of the situation through the eyes of the activists. Which factors make the situation “attractive” for them? And for which type of campaigners? For this, the authors brought the activists into four groups along two axes. First: integrating versus polarizing. Do they integrate the role of the business and the public interest in their own system of objectives or not? Integrators place a high priority on developing a productive win-win relationship with the business, while the polarizers simply push through their minds and do not cooperate with the organizations. The second axis shows whether the action group discriminates between organizations within an industry with regard to a genuine or perceived commitment of the organization to environmental issues, health issues or social issues. “Discriminators” look at the progress of the organizations with regard to benchmarks in their sector. The non-discriminators focus on the problems that the organizations and entire industries cause, without distinction between the good guys and the bad guys. These four groups have their own modus operandi.

  • Sharks arbitrarily attack organizations. They are not very organization-specific in their target and are generally harmless to individual organizations.
  • Sea lions are usually even less dangerous for organizations because they tend to only address weak situations and discussions about social values ​​in general.
  • Dolphins focus more on a single situation and work with the organizations to find a win-win solution.
  • The really dangerous activist groups are the orcas. They isolate the organization and humiliate them in public for their sins. They choose symbolic situations and use a lot of symbolism in their campaigns.

The authors’ research shows that most activist groups, but especially orcas and dolphins, have a collection of guidelines for when to engage in a situation.

When a situation meets the requirements of this or a similar list, the danger of a confrontation increases:

  • The campaign must have a clear goal.
  • The issue must be easily understood by the general public.
  • The issue has a symbolic value.
  • The issue has the potential to damage the image of the organization.
  • The opponent is strong enough (no “underdog” effect).
  • The issue can be packed in a campaign in which the public can be involved.
  • There are solutions that are confrontational, not gradual (political concepts, management concepts, product or process concepts, that are competitive in terms of price and quality).
  • There must be a drama element to the campaign to engage the media.

In chapter six the authors give a number of tips and examples of the application of these checklists. A possible template for a signal description of an upcoming issue includes a place for the following questions:

  • What is the issue?
  • Who is affected? (Internal? External?)
  • Who discovered the situation?
  • When did the signals occur?
  • Where did the signals occur?
  • What are the signals that have occurred?
  • Why can this become an issue that is relevant to the organization?

In Chapter 7, the authors present nine cases of issues that occurred, or were to act potentially in the near future at the time, arguing that the model works.

In chapter eight, the authors indicate that the organization always has the choice between two options:

  • Drop the project / action.
  • Carry out the project / action anyway.

In addition, they provide advice in both cases.

A possible template for these tools can be found in the attachment.

Pictogram

managing outside pressures - Eng

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