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LEADING AT TIMES OF CRISIS
AUGUST 03, 2003 -
THE STAR
BY HERMAN B. LEONARD
SOMETIMES it's easy to see the crisis facing your organisation.
What isn't always so easy is judging precisely how to deal with
it. What strategy should you devise? What resources should you
apply, and over how much time? Should you change the
organisation to deal with crisis? If so, how?
How do you determine your success in dealing with the crisis?
And what will be the effect on significant people-your staff,
your stakeholders and especially your public?
What differentiates true crises is that-by virtue of the scale
or the source of the challenge or some other significant novel
element-the organisation facing the crisis has no well-defined
routine available for dealing with the problem.
Intrinsically, therefore, the management of crises must involve
improvisation. This is often the source of great tension and
discomfort for decision makers such as professional, civil
servants, CEOs, and heads of departments, who are used to tried
and practised methods rather than experimenting with new
approaches, especially in high-risk situations.
Where does the word "crisis" come from? What does it actually
mean?
The word crisis comes from krisis (Greek), meaning "decision."
We've all been there. Those moments when we're pressed in an
instant to decide a course of action-and high stakes weigh in
the balance.
"Crisis" is also a word used in ordinary discussions to cover a
wide range of situations. For example, we've had the bird flu,
pig flu and then SARS virus- each a crisis, in part because each
was materially different.
We've had the Sept 11 attacks and the Bali bombing of recent
times, not forgetting the crises associated with other acts of
terrorism. In a different domain and a different currency, each
day we learn of a new accounting scandal leaving a major
corporation in crisis and an uncertain future for shareholders
and employees.
So "crisis" means many different things. What ties the different
meanings together?
Generally speaking, when we use the word "crisis" we mean
something beyond the routine emergencies that we are prepared to
deal with. A routine emergency may be tragic-for example, the
crash of a small plane or a house fire that destroys most of a
family's worldly possessions in a few hours-but, because we have
seen many similar circumstances before, we can be prepared to
deal efficiently and effectively-at least with the physical
aspects of the situation.
By contrast, something that is truly a "crisis" transcends
routine situations in some important way-and perhaps on more
than one dimension.
For example, the challenge may be of an unprecedented scale,
like an unexpectedly large earthquake in an area that is
prepared for smaller quakes, but cannot readily cope with
widespread devastation associated with a large one, or a forest
fire that sweeps into a remote community and burns down half of
the homes in town.
Or it may go beyond a routine situation by putting together two
or more generally unrelated challenges-for example, when a flood
spreads toxic substances from an abandoned mine and contaminates
the local water supply, so that authorities must simultaneously
cope with a flood, danger from the toxins, and a public health
crisis generated by a lack of potable water.
Thus, the defining elements of a true "crisis" are that, like a
routine emergency, the situation requires urgent attention
because of the high stakes involved and the results achieved
will depend in an important way on the decisions made and the
actions undertaken-but it differs from more routine situations
by involving one or more significant elements of novelty.
What does that imply about the problem of leadership during
crises? The immediate implication of the fact that the situation
has significant components of novelty is that, by definition,
those caught in a crisis cannot have a comprehensive and
workable plan and available resources for dealing with it-for,
if they did, it would be a routine emergency instead of a
crisis.
They may have pieces of different routines that can be applied,
but the fact of the novelty in the situation implies that they
will have to improvise; they will have to invent elements of the
response, or seek out new resources as they go about addressing
the challenges.
This requires creative, intellectual engagement while under
stress. Are there examples of people who have been effective at
addressing the novel elements of the crises they found
themselves in?
Unfortunately, we have a lot more examples of people who have
not been successful-mostly because they failed to notice the
significance of how the situation differed from other
circumstances they or others had confronted before.
There is tremendous psychological pressure on people in a crisis
situation to see the circumstances as more routine than they
are. The near-meltdown of the nuclear power reactor at Three
Mile Island in 1979 is a case in point; the operators view of
the seriousness of the event they were managing consistently ran
behind the actual events.
As the plant began to run out of control, the operators became
more and more concerned but at every stage in the event, their
assessment of the situation was significantly more favourable
than the actual reality.
Similarly, Chinese officials managing the SARS outbreak
consistently underestimated the seriousness of the situation.
Wasn't that just an attempt to hide the reality?
Possibly-but I don't think it was generally a conscious attempt
to deceive the rest of the world. I think in most cases the
problem was deeper: the data were, in the early stages of the
outbreak, quite baffling, and the officials managing the
situation were both confused and them selves deceived.
The relatively rosy outlook that generally prevails is the
result of the pressures the system as a whole puts on the
officials involved, and it is a persistent and widespread
phenomenon, not limited to one place or time.
During the outbreak of the 1918 flu epidemic now estimated to
have killed 20 to 50 million people worldwide-there were some
observers who perceived the threat accurately, but for the most
part the assessments held and articulated by officials managing
the problem systematically ran behind the reality.
Is there anyone who has been effective during a major crisis?
Fortunately, yes-there are many. At the out break of World War
11, Winston Churchill was a model of public optimism and
confidence, but he didn't allow himself to be fooled into
thinking that the road ahead was easy, Indeed, he was strikingly
and consistently honest about how serious the situation was.
On the whole, officials in Hong Kong did a pretty good job of
handling the bird flu crisis. They made some operational
errors-promising that they would destroy all the live chickens
in the territory within 24 hours was simply a mistake. But from
a strategic perspective they seemed to grasp the potential
seriousness of the situation, and seemed to have a reasonably
well-designed response to it.
It is hard to ask for much more than that, especially
considering the level of stress involved which generally tends
to reduce the quality of decision- making at the very time when
it is needed the most.
What can leaders in crisis situations do to improve their
performance?
First, they need to recognise they will be under significant
pressure to provide reassurance and describe the situation in
relatively optimistic terms.
While confidence and public optimism has an appropriate role to
play-certainly, they don't want to spread panic or indicate that
the authorities are not competent to deal with the
situation-making persistently ill-founded rosy assessments will
undercut credibility.
So officials need to be careful to articulate what they know
and-the basis on which they know it, emphasizing that their
information is incomplete and evolving, and that they will give
updates as more information' becomes available.
Their biggest problem in taking this stance is that they want to
provide reassurance, and so they need to guard-against allowing
their own thinking to be influenced by what they would like the
truth to be.
Keeping their own thinking straight is one of their biggest
challenges.
Herman B. "Dutch" Leonard is the George F. Baker Jr Professor of
Public Management at the John F. Kennedy School of Government at
Harvard University where he teaches extensively on leadership,
strategy, and decision-making. He will be presenting a one-day
seminar on "Leadership in Crisis Situations" on Sept 25. For
details, contact MIM at 03-21654611, Urban Forum at-03-77299018,
e-mail enquiries@mim.edu or visit www.mim.edu.
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