A crisis is an unforeseen occurrence

A crisis is an unanticipated event

A crisis is an unanticipated event that poses a risk to an organization and all of its stakeholders. The goal of crisis management is to eliminate technical failures by creating and implementing formal communication plans to prevent or handle sticky situations (James & Wooten, 2005, 2011). Unexpected incidents are anticipated to grow more frequent and severe as the business world becomes more uncertain and dynamic. Therefore, it is crucial for people, especially leaders, to have enough knowledge of crises and how to manage them. It refers to a disruption in the organization's normal functioning, which occurs with no or little warning, generating wide-range media coverage and extensive public scrutiny (James & Wooten, 2005, 2011). However, a company may foresee a crisis happening, but it cannot accurately know when to happen.

A practical example of this crisis

A practical example of this crisis is the nuclear power plant meltdowns at the Fukushima Dai-ichi, Japan, where a tsunami knocked out the power to the reactors which lead to the destruction of the diesel backup systems (Harris, 2011). Despite the fact that employees could have condensed the severity of the incident, the occurrence was unpredictable, and no one could have thought of it. Other examples are such as accidents, natural disasters, deaths, workforce violence, among others (Strickland, 2011).

Smoldering Crisis

Smoldering Crisis refers to any business problem that is potentially damaging, where someone within the organization has knowledge about but does nothing towards it (James & Wooten, 2005, 2011). Apparently, the crisis may generate media coverage if it goes public, and results to damages worth $250 000. Expertise in the organization should have spotted the problem prior, understood its potential loss, and taken some actions to control it. However, no one ends up paying attention to it; hence, the misfortune occurs.

An example of a smoldering crisis

An example of a smoldering crisis is where an employee of a company threatens to disclose to the governing authorities on the internal policies which he/she felt like they are unethical and illegal. The worker goes ahead and notifies the management that he will disclose the activities unless actions are to be taken to resolve the issues. Other examples may include customer allegations, media investigations, strong regulatory actions or government investigations.

Crisis Phases

Crisis Phases

Signal detection

The stage entails the identification of early warnings that point out the possible happening of a crisis (James & Wooten, 2011). There are four main types of crisis signals, and they include people (rumors, personal networks), external sources (government monitoring, remote sensing), internal signals (personal data), and mechanical signals. The primary challenge faced by leaders at this phase is that organizations get bombarded with all sorts of messages, making it is hard for them to distinguish between real and wrong signals. Another challenge is on developing the appropriate models to discover signs, which may be expensive to an organization.

Crisis Preparation and Prevention

The crisis communication team should brainstorm and come up with a comprehensive list of all possible calamities that may occur in an organization. It only requires one to revisit the past incidents and ensure that adequate resources are set aside to avoid recurrence of the situations. However, crisis prevention is a challenging step for leaders as they may not have an active crisis communication team to assist them in probing the possible events, or the organization may not have adequate resources set aside to prevent the recurrence of the crisis.

Damage Containment

The phase intends to avoid the crisis from spreading to other uncontaminated parts of the organization. As stated by James & Wooten, 2005, 2011, damage commitment strategies or activities are virtually impossible to invent during the crisis; hence, effective crisis management requires an organization to be proactive, instead of being reactive. The primary challenge that leaders face in this stage is the lack or specialized team of ending the crisis. For instance, in the case of a natural disaster such as storm, which may destroy the electric wiring system of an organization, the leader may take some time before employing the control team, leading to the spread of the damage.

Business Recovery

At this phase, organizations that are prepared for crisis, implement recovery strategies, which are both short and long-term to enable the resumption of the normal functioning of an organization. The programs considered in this step include the procedures needed to resume business, reassigning of jobs, diversification of risk through insurance, and the rest (James & Wooten, 2005). The primary challenge a leader face at this stage is when an organization suffers a severe damage, which is beyond reconstruction, requiring a lot of resources that may lead to the closure of the business.

Learning

The final phase entails the reflection and identification of lessons learned from the occurrence. The crisis management team examines all the possible reasons that caused the crisis, and outline procedures for mitigating or avoiding the effect of such actions in future. However, most of the employees get traumatized, opting to decline from work, which may pressure the leader.

Leadership Characteristics

Self-Awareness: Leaders demonstrate self-awareness when they are conscious of their feelings and thoughts (Hayashi & Soo, 2012). Leaders who are aware of their emotions also understand the other people’s feelings. A competent leader can choose a constructive way of solving a crisis without harming any employee.

Self-Control

Without this attribute, a leader may overreact after a crisis, leading to more harm than good. It is evident that when one is in the middle of the crisis, he/she want that boss who will come to the work and exert full control over the crisis. A simple mindful exercise can make employees more resilient; and it only happens from a leadership which is more efficient and emotionally balanced (Coombs, 2014).

Social Awareness

The hardest work in crisis management is dealing with people who are worried or upset. Disasters result to panicking of the staffs, which may eventually develop illnesses. Therefore, as a leader, approaching everyone with empathy for their concern can be much successful in securing their assistance to resolve the crisis (Hayashi & Soo, 2012).

Relationship Management

Apparently, when a crisis occurs, it is substantial to manage the many relationships among the stakeholders. It demands the ability to inspire others, forester teamwork, managing conflicts and moving people in the desired direction.

Examples

According to Coombs, 2014, one of the most successful crisis leaders is Mary Barra, who was the first female GM CEO. After two months of being in the office as the CEO, news hit that the General Motor company had put approximately 1.7 million cars on the road with switched defect ignitions, responsible for more deaths. To weather the crisis, Barra decided to address the recalls directly, where she admitted and apologized in front of a million viewers.

On the other hand, Enron, Hurricane Katrina is one of the examples of poor crisis leader. The director laid off many employees leaving them buried under the economic ruin of financial companies and also lost his life savings. It signifies that failed leadership can bring down businesses, economies, or even cities.

References

Coombs, W. T. (2014). Ongoing crisis communication: Planning, managing, and responding. Sage Publications.

Harris, R. (2011, Jul 5). What went wrong in Fukushima: The human factor NPR News, Retrieved from: http://www.npr.org/2011/07/05/137611026/what-went-wrong-in-fukushima-the-human-factor

Hayashi, C. & Soo, A. (2012). Adaptive leadership in times of crisis. National Defense University Press. Retrieved from: http://cco.dodlive.mil/files/2014/02/prism78-86_hayashi-soo.pdf

James, E., & Wooten, L. (2005). Leadership as (un)usual:  How to display competence in times of crisis, Organizational Dynamics, 34(2), 141-152. (Available from TUI)

James, E. H., & Wooten, L. P. (2011). Crisis management: Informing a new leadership research agenda. Annals, 5(1), 455-493. (Available from TUI)

Strickland, Eliza (2011, Mar 16), Explainer: What went wrong in Japan's nuclearreactors IEEE Spectrum, Retrieved from: http://spectrum.ieee.org/tech-talk/energy/nuclear/explainer-what-went-wrong-in-japans-nuclear-reactors