You are the manager of a big company and you know your business. Each day, you make important decisions regarding money, policy and strategy. You’re in total control. Without warning, you are confronted with a major crisis: an earthquake, a fire or a reputational risk. Now you find yourself uncertain and unsure. You don’t know what to do and you realize that everybody is looking to you for guidance—and the decision you are about to make will directly affect the survival of your company.
We see this all the time. Otherwise capable and competent managers appear to self-destruct during crisis, making bad decisions and stumbling in public. Consider the decision by BP to try to “spin” the oil spill crisis and the poor performance of CEO Tony Hayward, for example.
Why do your decision-making skills seem to desert you during a time of crisis? To understand this, we need to take a closer look at what happens during a crisis.
We sometimes forget that, although we are 21st century people, many of our reactions to stress are based on reactions developed in more primitive times—the “fight or flight” response. This means that at the time we are faced with a crisis, our bodies undergo physiological changes that prepare us for a response. Among these are increased respiration and heart rate, auditory exclusion and tunnel vision. These changes can inhibit our ability to think rationally and limit our decision making capacity. The greater the crisis, the more extreme the reaction.
Response to crisis can be roughly separated into three phases. When confronted with a crisis, the strategy with the highest success rate in prehistoric times was simply to freeze in place. Even today, the initial reaction of many people to crisis is denial: a failure to recognize or believe a crisis is occurring. This is why so many people appear to be dazed and unresponsive at the scene of an accident. Once we recognize the crisis, we begin to gather information and consider options for responding. This is where the physiological changes take place and the level of stress becomes a significant factor in our ability to assess the situation. The final phase making a decision and acting on the option we consider most viable.
The problem is that the length of time for these three phases varies based on the individual, the nature of the crisis and the people with whom we interact. Some people never progress past the first phase unless subjected to an outside stimulus. Others move from phase 1 to phase 3 in a matter of seconds.
The key to success lies in the identification of options in the second phase. Managers are trained to use a standard problem-solving model that works extremely well in day-to-day business: we define a problem, gather information on the problem, consider alternatives, decide on an alternative and implement it. The problem is that this model does not work during a crisis.
A crisis is characterized by ambiguity and conflicting information. There are usually severe time constraints and very high stakes. Using a structured decision-making model may, in fact, lead to a certain paralysis as the decision-maker attempts to gather more information and keeps putting off making a final decision. Couple a complex problem with inadequate time for analysis, add in the physiological changes induced by stress, and it becomes apparent why so many managers make bad decisions.
Crisis requires a more intuitive decision-making process. Research into military and emergency services’ decision-making shows that leaders reacting to crisis rely on pattern recognition rather than a structured decision making process. That is, they unconsciously attempt to find a correlation between the current problem and their past experience. Once a match is found, the decision-maker runs a quick mental simulation to see if it actually fits the current problem, makes any necessary adjustments, and acts. This process happens extremely fast and the decision-maker may not even be conscious of it, often claiming that they acted on a hunch or a feeling.
Recognizing that decision-making in a crisis is different from day to day decision-making is the first step to successful crisis leadership. Once this is understood, it is possible to increase the amount of available patterns through three ways:
1. Direct experience – While there is truly no substitute for actual experience, crises have a way of involving the people least equipped to handle them. The crisis for many will be an once-in-a-lifetime event. However, remember that we are considering patterns, not identical situations, so experience gained in one situation could be applicable to a different one.
2. Learning from the experience of others – There are numerous case histories of organizations that have successfully survived crisis. There is even more literature on those that did not. Research demonstrates that reading accounts of other crises and the decisions made during them is almost as effective as gaining direct experience. Reading articles in business magazines, reviewing case studies and after action reports, and viewing documentaries all can increase the patterns available for recall. This is why so many military officers study historical campaigns.
3. Simulations – Simulations or exercises combine the best of both worlds. They can be based on hypothetical scenarios or actual scenarios found in after action reports or articles. In addition, they can provide direct experience to participants, allowing them to become familiar with the physiological changes brought on by stress. Even something as simple as a short discussion-based exercise can provide additional pattern sets to decision-makers.
Decision making during a crisis is not the same as decision making for routine business. It requires a shift from a structured decision making model to a more intuitive one. Recognizing that decisions must be made using this intuitive process and preparing yourself to use it is the best way to prevent a leadership failure during a crisis.
Lucien G. Canton, CEM is a consultant specializing in preparing managers to lead better in crisis by understanding the human factors often overlooked in crisis planning. A popular speaker and lecturer, he is the author of the best-selling Emergency Management: Concepts and Strategies for Effective Programs. For more information, please visit www.luciencanton.com, or email Info@luciencanton.com.