Corporate crises have become commonplace, but the effects are far from routine. Managers and directors of organizations --particularly the senior executive team--have a long way to go in improving their management and leadership skills to respond quickly, decisively and effectively in high-stress crisis situations.
Headlines in newspapers and on websites around the world detail corporate crises on almost a routine basis. But their effects are far from routine. Such crises--whether in business, government, education or for-profit or nonprofit organizations--can dismantle the foundations and systems of organizations: top management may resign or, even worse, face imprisonment.
Middle management may be fired or demoted. Rank and file workers may be laid off, often with no real hope of returning to their jobs. Stockholders lose money. The public loses confidence. And the average citizen affected by the precipitating event may suffer the most: lost wages, damaged property, personal injury--even death.
Business is well acquainted with crises that include a wide and ever-expanding range of events. These can include extortions, executive kidnappings, product recalls, industrial sabotage, copyright infringement, theft of proprietary information, work-related homicides, workplace bombings, terrorist attacks and natural and man-made disasters.
Regular daily operations no longer exist in organizations dealing with crises. Of most importance, however, is that crises can disrupt the perceptions of people in key leadership positions, causing them self-doubt and stress. The result is often the wrong decisions being made at the wrong time.
The Institute for Crisis Management (ICM) provides an annual detailed analysis of major crises, primarily those described in the news media that relate to management. In 2009, ICM states the majority (51 percent) of the crises reported were "management-related." This suggests that managers and directors of organizations are doing a poor job of leading organizations through crises successfully, despite evidence that the repercussions of such crises may be severe.
Crisis Management Teams
Crisis management is the systematic way in which members of an organization, in conjunction with external stakeholders, work to avoid potential crises and to minimize and resolve those that do occur. Some organizations have specific crisis management teams to deal with any organizational crisis. Other organizations rely on the senior executive team to handle such situations.
With either structure, the individuals involved must be capable of doing the job. They must be flexible and adaptable to continually changing conditions. They must be willing to listen to others and to share their own thoughts and ideas. They must be comfortable working in high-stress situations. The team must also be capable of...