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Crisis Management 101
Whatever “Leadership” is, one of its components is “Crisis Management.” Why? . . .
Because that’s one thing administrators, managers, . . . leaders . . . find themselves in: crises.
Leaders Deploy Two Kinds of Crisis Management
One of them (let’s call this “Type A Crisis Management”) is when some awful thing happens, some highly unusual, terrible situation – an airplane crashes in your downtown, an earthquake or flash flood destroys an area, it is discovered that people for whom you’re responsible have done a terrible thing, etc. – and you, as a leader, have to “manage” this crisis.
In that sort of situation, you have to figure out what immediate steps to take, how to respond to the media who are descending on your community from afar. You have to “manage” this rather unmanageable crisis that you find yourself in.
1st Type of Crisis Management
This first kind of “crisis management” refers to how leaders deal with the crisis-at-hand. Examples of this kind of crisis management include:
- A1. How the various public officials responded to the 2005 Hurricane Katrina
- Officials of the City of New Orleans
- Louisiana and Mississippi State Officials
- Federal officials in such agencies as the Federal Emergency Management Agency, the Corps of Engineers, and others
- A2. How the Executive branch of the US government — and how the New York City First Responders — managed teh response to the 9-11 terrorist attack on the World Trade Center (September 11, 2001)
- A3. How the US Treasury Department (Secretary Paulson and Fed Chairman Bernanke) managed the Financial Crisis that was triggered by an overnight inter-bank credit freeze in September of 2008
- A4. How an organization – in the private or public sector – handles the public revelation that its staff has been guilty of gross negligence, incompetence, and worse: corruption or moral turpitude.
2nd Type of Crisis Management
The second kind of “crisis management” (let’s label “Type B Crisis Management”) refers to how you manage your normal, day-to-day management responsibilitieswhile you’re in the midst of a crisis. . . i.e. How you guide your organization as it tries to perform its routine, normal functions at a time when things are far from normal because there is some sort of crisis that is taking place.
Examples of this kind of crisis management include:
- B1. How government entities in New York – such as police or firefighters not directly involved at the World Trade Center — tried to continue performing their normal functions . . . in spite of what was happening at the World Trade Center.
- B2. How organizations – private or public – tried to continue with their normal functions . . . in spite of the disruption caused by Hurricane Katrina, such as, the New Orleans Police Department, the Times-Picayune newspaper, local hospitals, local public utilities, etc.
- B3. How an organizational leader tries to motivate – but also re-direct – the organization’s staff even though a scandal is unleashing a torrent of harsh criticism in the social media . . . as well as in the traditional media.
On-Going Example in the News
At this writing (spring 2014) serious students of leadership are being treated to a ring-side seat at a classical “Crisis Management” event:
- General Motors CEO Mary Barra’s handling of a crisis that landed in her lap.
GM’s Board of Directors appointed her, a 30-year GM employee, as the company’s new CEO on January 15, 2014.
Two months later she is faced with having to handle the kind of crisis that makes for the kind of classic case study that constitute the core of most graduate management programs.
Here’s the Crisis GM CEO Barra has to handle:
By mid-March 2014, it was revealed that GM safety engineers knew years ago (for as long as 10 years) that the ignition switch in hundreds of thousands of Chevrolet Cobalt vehicles had potentially fatal defects. The defect could, under certain conditions, disable the car’s air bag.
In spite of mounting evidence. . .
- GM lied to the families of accident victims about what they knew,
- GM refused to talk to one survivor family unless it was through their attorney (they did not have an attorney because they were not suing GM),
- In a case where a survivor family did sue them, Gm called their lawsuit “frivolous” . . .
An Exercise in Crisis Management 101
What Would YOU Do in the GM Recall Crisis?
So, let’s stop the clock right there and put on the Crisis Management thinking cap . . . Imagine YOU (rather than Mary Barra) are the new CEO of GM, and the very damaging revelations are not just shocking the public, they’re shocking GM employees (because very few of them were privy to what the safety engineers and the attorneys knew); the revelations are equally shocking to you!
You need to think — and plan — how you ought to proceed with managing the Type A and the Type B Crises. i.e. How to deal with the storm of a quickly widening public and legal scandal, as well as with managing the rest of the organization — that’s trying to produce competitive cars — while this storm plays out.
You’ll get the most out of this if you:
- Go online and read more background on the case.
- One link, http://ow.ly/v9e95 gets you to the USA Today article by Hillary Stout, Bill Vlasic, Danielle Ivory, and Rebecca Ruiz: “Carmaker Misled Grieving Families on a Lethal Flaw.” It is a pretty good description of the smoking gun that cinches GM’s guilt. It gives you sense of the questions the Congressional Committee that you’re going to face next week will be asking you.
- Another link, http://ow.ly/v9dOM gets you to the very perceptive USA Todayarticle by Michael Wolff: “Wolff: GM’s Barra shames voiceless CEOs.” This piece Wolff’s is insightful, explaining just how uncommon, how unusual, Mary Barra’s approach to managing this crisis is.
- And finally, the link http://ow.ly/v9dUG takes you to a NY Times article by Vindu Goes: “G.M. Uses Social Media to Manage Customers and Its Reputation.” In it, he gives some examples of how they are using Social Media in a very creative, gutsy way, as one of their Crisis Communications Tools.
2. Discuss what you think of all this with a colleague or two.