This piece was originally published at Oilweek.com on January 14, 2014.
Applying the successful start-up model to crisis management
Strong crisis management is a lot like building a start-up.
It typically takes at least two to three years for most successful start-ups to reach profitability. During this arc, there is a journey that many of these organizations follow:
• Identify a need and assess the demand for that need
• Create a business plan
• Select an organizational structure
• Hire personnel
• Create the product or service
• Communicate about or market the service or product
Similarly, when a crisis happens, organizations essentially need to create a temporary mini-company within their existing organizational framework. But when people are at risk, when oil is flowing into a river, when tweets are spreading like wildfire, they must do so in a matter of minutes, rather than years.
That said, the steps remain the same:
• The need is identified (the incident is discovered)
• A business plan is created (response action plan)
• An organizational structure is established
• Personnel are identified and activated
• Products (mitigating actions) are created
• Communication becomes extremely important—not for the promotion of a new product, but to help stakeholders understand what the organization is doing to remedy the situation.
Because an organization in crisis must become “profitable” in a hurry, responsible organizations often try proactively to address most of the above steps. Indeed, many of the steps can be taken before a crisis hits.
Here are some additional thoughts on how the start-up model can translate in times of crisis management:
Understand the need: A detailed risk assessment will yield the most likely kinds of crises an organization may face. These can be prioritized by consequence and likelihood in order to decide which crises should be planned for in advance and which ones are not worth expending resources on.
Create the business plan: A good crisis management plan will outline what has to happen in specific detail—with appropriate checklists—so personnel are able to pick up the plan and immediately begin responding. As part of this process, it is important to take the time to understand how the day-to-day operating processes, such as funding sources and barriers, may impede response times and proactively design a system to override the barriers if necessary. This can be as simple as writing policy that allows personnel to temporarily override procurement rules.
Select an organizational structure: Organizations require specific functional positions and a clear leader to respond quickly. These positions will likely be very different from the day-to-day positions in the organization because the demands will be much more complex and will require a high degree of flexibility.
Hire personnel: It may seem like this work has already been done. After all, the personnel already work for the organization. But the skills required to manage a crisis effectively are different from the skills required to manage most day-to-day operations. Crisis personnel must work well under high pressure and in emotionally charged situations. They have to make decisions quickly, often with incomplete information and without the ability to collaborate widely. Thus, such personnel should be identified ahead of time—without confining thinking to traditional roles—and they must also be trained in the procedures that will be used during the crisis. These employees will be faced with big decisions that will have big consequences for the company and as such, must be selected and trained carefully with much attention to detail.
Create the product: The product of a successfully managed crisis is effective response to that crisis. This can’t be created ahead of time. Prototypes, however, can be built and rebuilt in the form of practice crisis scenarios. A prudent organization practices its responses to crises many times in order to be able to effectively respond to the real ones.
Communication: The communications goal isn’t to sell a product—it’s to share important information and protect the reputation of the organization in the face of a major disruption. Having the plan, as well as the people, that can execute it efficiently is paramount. Many organizations have done the right thing in crisis situations but failed to communicate effectively with their stakeholders. The result is a reputation that is seriously damaged in the field of public perception.
These six steps can form the backbone of any successful crisis management plan. While it’s not always possible to anticipate when a crisis will strike, it is very possible to have the infrastructure in place so that you’re ready when it does.
It typically takes at least two to three years for most successful start-ups to reach profitability. During this arc, there is a journey that many of these organizations follow:
• Identify a need and assess the demand for that need
• Create a business plan
• Select an organizational structure
• Hire personnel
• Create the product or service
• Communicate about or market the service or product
Similarly, when a crisis happens, organizations essentially need to create a temporary mini-company within their existing organizational framework. But when people are at risk, when oil is flowing into a river, when tweets are spreading like wildfire, they must do so in a matter of minutes, rather than years.
That said, the steps remain the same:
• The need is identified (the incident is discovered)
• A business plan is created (response action plan)
• An organizational structure is established
• Personnel are identified and activated
• Products (mitigating actions) are created
• Communication becomes extremely important—not for the promotion of a new product, but to help stakeholders understand what the organization is doing to remedy the situation.
Because an organization in crisis must become “profitable” in a hurry, responsible organizations often try proactively to address most of the above steps. Indeed, many of the steps can be taken before a crisis hits.
Here are some additional thoughts on how the start-up model can translate in times of crisis management:
Understand the need: A detailed risk assessment will yield the most likely kinds of crises an organization may face. These can be prioritized by consequence and likelihood in order to decide which crises should be planned for in advance and which ones are not worth expending resources on.
Create the business plan: A good crisis management plan will outline what has to happen in specific detail—with appropriate checklists—so personnel are able to pick up the plan and immediately begin responding. As part of this process, it is important to take the time to understand how the day-to-day operating processes, such as funding sources and barriers, may impede response times and proactively design a system to override the barriers if necessary. This can be as simple as writing policy that allows personnel to temporarily override procurement rules.
Select an organizational structure: Organizations require specific functional positions and a clear leader to respond quickly. These positions will likely be very different from the day-to-day positions in the organization because the demands will be much more complex and will require a high degree of flexibility.
Hire personnel: It may seem like this work has already been done. After all, the personnel already work for the organization. But the skills required to manage a crisis effectively are different from the skills required to manage most day-to-day operations. Crisis personnel must work well under high pressure and in emotionally charged situations. They have to make decisions quickly, often with incomplete information and without the ability to collaborate widely. Thus, such personnel should be identified ahead of time—without confining thinking to traditional roles—and they must also be trained in the procedures that will be used during the crisis. These employees will be faced with big decisions that will have big consequences for the company and as such, must be selected and trained carefully with much attention to detail.
Create the product: The product of a successfully managed crisis is effective response to that crisis. This can’t be created ahead of time. Prototypes, however, can be built and rebuilt in the form of practice crisis scenarios. A prudent organization practices its responses to crises many times in order to be able to effectively respond to the real ones.
Communication: The communications goal isn’t to sell a product—it’s to share important information and protect the reputation of the organization in the face of a major disruption. Having the plan, as well as the people, that can execute it efficiently is paramount. Many organizations have done the right thing in crisis situations but failed to communicate effectively with their stakeholders. The result is a reputation that is seriously damaged in the field of public perception.
These six steps can form the backbone of any successful crisis management plan. While it’s not always possible to anticipate when a crisis will strike, it is very possible to have the infrastructure in place so that you’re ready when it does.
Authored by: Vlad Grigore