John (not his real name) wasn’t behaving normally. I had known him as a calm, organised CEO. But since the national product recall started two weeks ago his decision making had become erratic, kneejerk and, at times, didn’t make sense.
The stress and anxiety of the past 14 days had taken its toll. John was thinking with the lizard (flight, fight or freeze) part of his brain or amygdala, not the rational part of his brain, the pre-frontal cortex.
Lesson one – be aware of the impact stress can have on you and your team and be prepared
While stress is a normal response to a crisis or any challenging or new situation, we all react differently. And while the ‘fight or flight’ response, brought on by stressful situations, can be helpful at times, it can become a problem when it lasts too long, or becomes too intense. A crisis can last for weeks, if not months, and this sustained pressure has the potential to overwhelm you and your team, undermining your coping mechanisms and impairing your ability to think clearly. This is when poor decisions happen.
It is important, should you recognise any of the symptoms below* in yourself or members of your team, that you take the right steps to manage it. This will allow you to function better in your role on the crisis management team and ensure the wellbeing of those around you. Here they are:
- feeling overwhelmed or unable to cope
- feeling ‘on edge’ or unable to stop worrying
- changes in sleep patterns, feeling exhausted
- changes in appetite
- physical reactions such as headaches, muscle tension, upset stomach
- difficulty concentrating
- changes in mood, irritability, or anger
- withdrawal from friends and family
- reliance on alcohol or other substances to cope
- thoughts of self-harm or suicide.
The product recall John’s company faced happened very early in my career and I had nothing against which to compare it. Today, 35 years on and with hundreds of issues and crises under my belt, it is something I have seen all too often.
It is the first unspoken impact of a crisis and it can affect anyone at any time. The good news is it is manageable, but it requires someone with the experience to first recognise it and then have the frame of mind to pull themselves back or allow someone to pull them back to their rational thinking state. At times this may require counselling.
The second part of this lesson is to surround yourself with a team and advisers who have been through numerous crises and who have the perspective to help you think and act rationally.
Lesson two – you won’t have time to run the business so have a backup plan
We ran a workshop in Melbourne many years ago with 12 CEOs, all of whom had undergone some form of crisis. We asked them what surprised them most about the crisis. To a person they said how little time there was to manage the business and that while they had plans in place to deal with crises, these had not considered back-up plans, nor resources, to continue running the day-to-day operations.
Much is written about the need to run crisis simulations, what to do in a crisis, how quickly you should respond, the need for transparency, mapping and engaging with stakeholders, what to say and what not to say, etc. But very seldom do management teams talk about or plan for who manages the business while the crisis management team is busy managing the crisis.
While it is excellent to run crisis simulations and to test your crisis management plan you need to make sure your business continuity plan addresses who will run the business in the absence of the senior executives who will be leading the crisis management team. Ensure they know what to do and what is expected of them.
Lesson three – building that all-important trust and confidence within your crisis management team
One of the little spoken about and unsung benefits of running crisis simulations is the trust, confidence and knowledge this builds among crisis management team members.
I know from bitter experience how important it is:
a) to have a team that knows its roles in a crisis and on whom the crisis management team leader, the executive team and the board can rely on to perform these roles, and
b) the ability of the simulation to identify gaps in the team, knowledge and/or processes, because you don’t want to find these out for the first time during the crisis.
A crisis team that has not been through a simulation is like having a great Matildas, Socceroos or Wallabies team on paper that has never practiced.
A simulation should accurately replicate a crisis scenario and test the team’s response to the crisis as it evolves and more information comes to light. It should replicate the pressure of internal and external stakeholders wanting and, in some cases, demanding information, as well as the inevitable pressure from media and social media hungry for new information.
Unlike 35 years ago when I faced my first crisis, today we are fortunate to have tools that enable us to simulate that realistically.
There is no better way to test the mettle of your crisis management team and, in the process, equip them to be effective in a crisis.
[To read about the financial impact of a crisis on a listed company, please click on this link to see our Crisis Value Erosion Index report which analyses the impact of a crisis on 70 listed companies from around the globe]