This column is part of Globe Careers' Leadership Lab series, where executives and experts share their views and advice about leadership and management. Follow us at @Globe_Careers. Find all Leadership Lab stories at tgam.ca/leadershiplab
Recent events unfolding in the media such as the Volkswagen and Ashley Madison scandals provide a reminder of the importance of effective crisis management planning. At its most basic level, crisis management requires developing a realistic set of planning scenarios, preparing appropriate responses for those scenarios and practising the response to identify gaps and weaknesses.
Many crises are identifiable and predictable – situations that a company could easily find itself in as a result of a natural disaster, an operational failure, ethical misconduct or a cyber-attack. For these, companies must develop plans that address roles and responsibilities, courses of action and crisis communication. By having a clear strategy to manage foreseeable crises, companies are better able to make the right decisions while in the crisis bubble. When employees are under severe stress, explicit procedures and guidelines help to ensure appropriate action. Proper training and regular drills help to ensure that the crisis team is able to react optimally in real-time situations – those planned for and those not even imagined.
Although sound planning will help a company mitigate the consequences of a crisis and speed recovery, even the best crisis management planning cannot anticipate every possible crisis, nor predict how any one crisis will actually unfold. For this reason, the other critical aspect of crisis management is creating the capacity in the organization to respond in the moment to things that were not anticipated or planned for.
Research indicates that a key distinguishing feature of resilient companies is culture. A corporate culture that empowers employees at every level to detect problems, take corrective action and act quickly distinguishes companies that will weather the crisis storm best. This relies on having the right individuals as well as a deep-seated culture of trust throughout the organization, where individuals are supported for raising the alarm when something is wrong and do not live in fear of being punished if they are messengers of bad news.
The southern Alberta flood in June 2013 provided ENMAX (a City of Calgary-owned utility company) with an opportunity to test its resilience. Not surprisingly, one of ENMAX's planning scenarios was a 1-in-100-year flood, and it had recently completed a table-top exercise to test the plan. Part of the response plan was a detailed crisis communication plan that included a number of carefully vetted and approved messages for communicating with stakeholders. After the real flood hit, leaving thousands without power, ENMAX quickly recognized the need to depart from the script and engage in a more personal way with Calgarians.
ENMAX used social media to communicate – not only information – but empathy, compassion and concern. Twitter and Facebook became channels for partnering with the public to understand problems, identify with individuals' frustrations and provide realistic answers to people's questions. A tangible benefit of allowing the social media team to respond in real time, based on what it was hearing, was the strengthening of relationships with stakeholders throughout the city.
As tweeted by one person: "Hey ENMAX I know the firemen tend to get all the love, but I think your linemen are pretty dreamy myself!"#unsungheroes#yycflood.
Within 15 months of the flood, ENMAX found itself facing two additional crises. Fortunately, lessons learned from the flood had been gleaned and incorporated into a revised crisis management plan. By taking time after the crisis to evaluate what was done right, what was done wrong and what could be done better next time, ENMAX was better prepared to face whatever came its way.
Crisis response planning is essential to an organizations' success. Large corporations can expect to face a crisis on average every four to five years. Although good preventative measures can reduce the likelihood of having a crisis, no organization is immune. Planning, preparing and practising are essential to improving resiliency in an organization. However, it is the soft side of crisis response that often determines success: empowering employees and responding to all stakeholders with empathy go a long way in protecting reputation and minimizing long-term effects.
Anne Kleffner, a professor at the University of Calgary's Haskayne School of Business (@haskayneschool), is an expert in property and liability risk, with a particular interest in enterprise risk management, insurance regulation and disaster risks.