Being a director in a time of crisis...
The role of a company director is a challenging one at the best of times and, as we know all too well, these are not the best of times. The normal day-to-day business of steering an organisation smoothly on a path of growth and prosperity is replaced by an existential threat and the need for cool-headed crisis management.
I spoke to my colleague and presenter of UK Training’s director courses, David Joel, about how the role of a director must change during a period of crisis. David is a chartered director and expert in company law. He has advised the boards of many medium and large organisations on how they should handle crisis situations.
So, how should directors respond to a crisis?
It is important to recognise that the role of the board changes and the immediate objective is to contain the situation and then try to get back to ‘business as usual’ as soon as possible. Crises have different levels of severity and the boards response is driven by the seriousness it presents to the organisation and stakeholders.
What are the different levels of severity?
- Level 1 – the organisation will be publicly embarrassed and the delivery of its vision, purpose and values threatened
- Level 2 – the crisis could result in personal injury, some property loss, possible loss of life and possible reputational damage
- Level 3 – the crisis would result in loss of life, significant property or financial loss, reputational damage and threaten the organisation’s survival
It is clearly wise to plan for a crisis, and tools such as a risk register will help the board to do ‘what if’ scenario planning. However, when we find ourselves in the worst kind of crisis, such as now, then the best laid plans are severely constrained by external forces and other decision-makers.
Every crisis has a pace of its own. As the COVID-19 pandemic shows, the pace at which crises take hold can be fast and furious - the board needs to match the tempo and get into battle rhythm.
Unlike in standard risk management, the board and/or its crisis leaders will be dealing with incomplete information and therefore great uncertainty. It is absolutely vital that the board reprioritises what is now urgent for the survival of the business, its employees and its stakeholders.
Leadership in a time of crisis
The key elements to crisis leadership can be summarised as follows...
- Decisive leadership - Mistakes are almost bound to happen, especially at the early stage of a crisis. When you are able to make informed decisions, then act with confidence and lead from the front.
- Active communication - Prioritise stakeholders and have a practical strategy for communicating clear, understandable messages. In crisis situations honesty and transparency are critical. Disseminate the facts where they are known and where the facts are not known, say so.
- Continuous assessment and review – The COVID-19 crisis is continually evolving with new information emerging minute-by-minute. In situations like this it is important to keep up to date with the latest developments, constantly reframe the crisis, be flexible and review the options available. Know when to ditch the plan if it is not working.
- Intelligence gathering - Drive towards actionable intelligence - information that can be acted upon. Crisis is full of uncertainty and crucial information can come from a wide variety of sources. Cast a wide net but always check the validity and quality of those sources upon which decisions or actions are based.
- Managing the crisis life cycle – Remember the aftermath and not just the event – organisations are judged by how they fare afterwards. A recent example would be the Grenfell tower disaster, the primary crisis was the fire but the secondary crisis was sourcing accommodation for displaced people.
A crisis severely tests an organisation’s leadership, decision-making and strategic-thinking abilities and it is the job of the directors and the board to rise to this test.
Get the basics right
In conclusion, dealing with a crisis means falling back on some of the softer characteristics of leadership such as good communication, honesty, integrity, empathy and courage.
The board needs to develop the ability to absorb and act on high volumes of complex information. There will be many things beyond the control of the organisation, so concentrate on controlling the things that are within your power to control.
The three keys to communication in a crisis are The Three Es: Empathy, Ethics and Emotional Intelligence. Understand the position of your stakeholders, ensure the values of the organisation are aligned with the public mood and learn from your mistakes and successes.
In these extraordinary times it is important to remember that the role of the director is to provide leadership and reassurance from the top and help to steer the organisation away from the rocks and into calmer waters.
Written by Paul Murphy
http://www.uktraining.eu/news-article/being-a-director-in-a-time-of-crisis/93