Emergency Preparedness FMJ Article

If the unexpected is a crisis

Richard P. van Pelt

Crisis management is becoming increasingly critical to the survival of an organization in today’s media-saturated, litigious culture. However, few organizations have formal contingency plans in place, largely due to the reluctance of executives to spend precious time dealing with the ambiguous nature of contingency management. Anticipating a crisis will eliminate the element of surprise and will carry the organization through the initial stages of the situation. Remarkably, the majority of organizations do not have formal contingency plans in place. The mark of an effective facility manager is the ability to control the crisis rather than stumbling reactively through the problem. An organization owes its stakeholders its attention to crisis management, and the more thorough the planning, the more effective the recovery will be after a crisis.

THE IMPORTANCE OF CONTINGENCY PLANNING

Crisis management is an emerging discipline, due perhaps to the dramatic increase in the dollar amounts involved, the subsequent level of liability exposure and the expanding media coverage each new crisis receives. How the facility manager handles a crisis is becoming increasingly critical to the survival of an organization.

More than half of all major industrial accidents have occurred within the past decade. Natural disasters also have inflicted punishing blows on our facilities in the form of 100-year floods, earthquakes, hurricanes and tornadoes. Studies suggest that the majority of companies hit with a major crisis never recover or open their doors again. It is incumbent on those in decision-making roles to be sure their areas of influence are fully prepared. Anticipating a crisis will eliminate the element of surprise and will carry the organization through the initial stages of the situation. Yet, remarkably, the majority of organizations do not have formal contingency plans in place.

Many executives are uncomfortable with contingency planning because the scenarios seem too ambiguous, too negative or too unlikely to occur. Today’s corporate culture is fixated on the bottom line, but contingency planning has no immediate and tangible bottom line.

It means setting aside some time for blue-sky—or black-sky—thinking and discussion. It means thinking the unthinkable. Yet, when the unthinkable does happen, the future of the entire organization may be at stake. It is becoming more and more clear in this society that formal contingency planning cannot be ignored.

A CRISIS MODEL

According to University of Southern California business professor Ian Mitroff, there are five phases to a crisis: prevention/preparation, early warning signals, containment, recovery and learning. The crisis model, an adaptation of Mitroff’s model, is defined by the phases of a crisis. Prevention and preparation comprise the initial phase, in which planners begin to familiarize themselves with the potential risks. The learning phase connotes the post-incident audit situation in which the lessons of past actions can be used to make alterations to an existing system.

Preparation and prevention are considered to be the most important elements of emergency response, but I contend that preparation and early warning signals are really a part of the same process divided into separate entities merely as a matter of convenience.

All active organizations receive a continuous, uninterrupted stream of information in the form of raw data, which must be processed. With few exceptions, crises leave a trail of early warning signals. It is the facility manager’s job to recognize those signals and take the appropriate action to prevent further damage.

No crisis occurs in isolation. It is typically part of a chain reaction of other crises. Therefore, it would be a mistake for a facility manager to deal with a crisis as if it were an independent event, as this would limit the effectiveness of the recovery. The trick is to identify those crises that may be spillovers from other events.

The causes often are not isolated to single issues, either. Virtually all crises are caused by the breakdown of one or more systems, which will be addressed later in this article.

Usually, there is a difference between the cause of a crisis and the triggering of one. Effective contingency plans cannot be built around triggers; they must be focused on the causes. In the case of the Challenger disaster, the causes involved the process of decision-making at NASA, not necessarily the poor O-ring design. The crisis was triggered by the O-ring failure. The planners should have addressed the inefficient, bureaucratic methods that were used to transmit data from the lower corporate ranks to the decision-makers.

The expression, “the straw that broke the camel’s back,” describes the difference between the cause of a problem and the trigger of it. Obviously, it was not the straw that caused the break; it was the rest of the baggage. The straw was merely the trigger. Without the rest of the baggage, it would not even have been noticed.

Framing the problem to focus on the effects rather than the causes results in inadequate and irrelevant decision-making that may not resolve the problem. As important as it is to frame the problem properly, this will be impossible if the person making the determinations cannot differentiate between the causes and the triggers of crises.

Just as the bulk of an iceberg lies below the surface, the causes of a crisis are usually far deeper than what is perceived initially. To deal only with the apparent issues often will result in very flawed problem-solving methodology.

It is interesting to examine decision-making within organizations, particularly under stressful conditions. During a crisis, time itself represents an acute problem; however, the causes are generally chronic in nature. In other words, the onset of the crisis can take a great deal of time to develop and often represents a series of conscious actions.

Correct decisions are impossible if the problem requiring the decision cannot be identified. We may struggle to properly frame the problem correctly, but this may be difficult for a number of reasons.

One of the reasons is deeply philosophical—the world is chaotic and not given to perfect order. Many of man’s decisions are made in an uncertain world. Since so many decisions must be make with unknown and unknowable variables, it is impossible to make perfect decisions about future events.

While it is true that most planning is directed toward the post-event period, it is equally true that planning is conducted to avoid crises. It would be more accurate to say that the essence of crisis management is to plan for those crises that are avoidable, and to be prepared to deal with those that are unavoidable or outside the control of the organization.

Some argue that planning is not the essence of crisis management—it is the management of the crisis. Speed and efficiency of the response are most indicative of good crisis management. The real test is not the pre-event planning, but the post-event response.

If the goal of crisis management is survival of the organization, then the recovery phase of crisis management is the turning phase. The organization should not return to its pre-crisis state or remain static. Instead, organizations should attempt to gain momentum and improve as a result of a crisis. No organization should ever look back in the rearview mirror after a crisis, hoping to return to status quo, because that goes against the concept of progress.

Recovery from a disaster leads to the learning phase, where an organization’s weakness can be exposed. The learning process must include a vision, without which the process is undirected and undisciplined.

STAKEHOLDERS

Crisis management efforts revolve around a central hub of internal and external stakeholders. Care must be taken to identify the stakeholders at the relevant times, because they can change depending on the system involved or the phase of the crisis. Internal stakeholders cannot be lumped together, nor can external stakeholders. In fact, each step of a crisis may uncover a different set of stakeholders.

SYSTEMS

The last dimension of the model—the spokes—can be defined by the systems which, if not involved in the crisis, could be used to manage it. These are defined as core technology, organizational infrastructure, human factors, organizational culture and emotions.

Core technology is the most visible system, while the emotional component of an organization is the least visible and least understood. The intervening spokes fall between these two in visibility.

Core Technology: One of the reasons for the rapid advance of society is the use of complex technology to assist humans in managing increasingly complex systems. Along with the benefits comes the downside: society becomes dependent upon those systems and technologies. Not all core technologies need to be high-tech, but they need to be central to the organization’s operation.

Organizational Infrastructure: Some companies fall into familiar organizational traps, where the infrastructure of the organization creates its own crisis. Communication channels are perhaps the most critical segment of the infrastructure. Effective communication channels among levels and across divisions must be identified and kept open.

Human Factors: Humans cannot be expected to behave perfectly. No matter how well-trained an employee is or how tightly a company controls its procedures, people will always make mistakes.

Of the six fastest-growing crisis categories, notice how many are related to human factors:

• Bad press generated by consumer activism
• Sexual harassment
• Court decisions
• Whistle-blowing
• Product recalls
• Executive firings

Organizational Culture: The “frame of mind” of an organization is dependent upon its emotional make-up. The net effect of Challenger was to show how the culture within NASA was bureaucratic and cumbersome, and how this structure created a climate in which repeated warnings were ignored. The culture was intolerant of those who issued the warnings, so the vital information that could have prevented the explosion never reached those in charge. Once formal lines of communication are established, employees feel comfortable using them.

Emotions: The senior executives’ attitudes toward the crisis will, in large part, affect the outcome. If the CEO is confident and realistic, then the employees will react similarly.

TIMING IS CRITICAL

The essence of making decisions is to be able to sort through the necessary data and accept a reasonable degree of risk-all in a timely way. The U.S. Marine Corps makes decisions based on the premise that there is no perfect solution to a problem in a chaotic world. Decisions are made with the philosophy described in the passage from the book, “Warfighting” (Doubleday, 1989):

“Since all decisions must be made in the face of uncertainty and since every situation is unique, there is no perfect solution to any battlefield problem. Therefore, we should not agonize over one. The essence of the problem is to select a promising course of action with an acceptable degree of risk, and to do it more quickly than our foe. In this respect, a good plan violently executed now is better than a perfect plan executed next week.”

There must be some compromise. Identify the acceptable level of risk and then select the most promising course of action. The goal of the organization is to resume normal business activity in a cost-effective manner in the shortest possible time.

FMJ
About the authors: Richard P. van Pelt, Ph.D. is a Certified Facility Manager, Certified Business Continuity Professional, Real Property Administrator and Facilities Management Administrator in Pasadena, Calif., USA. He holds a doctorate in administration and management, with a focus on crisis management. He also holds two master’s degrees in business organizational management and business administration and a bachelor’s degree in psychology.