Case Study: Avoiding Organizational Drama in a Crisis
When a crisis strikes organization, already knowing who is responsible for what actions is a critical part of your planning, but who ultimately makes the call? A single voice at critical moments is particularly important when quasi-autonomous parts of the business are involved that might have different priorities or stakeholders to consider. Although this principle may be the antithesis to a flat organizational culture, command-and-control definitions determine which of the many voices involved is the authority for that phase of the incident and a chain-of-command approach ensures that everyone knows their responsibilities and authority to act over which parts of your response.
Fire fighting
What are the consequences if this kind of clarity isn’t achieved ahead of time? In one such case, a premier Japanese global brand providing professional broadcast video products almost fell into the trap of “keeping family business in the family”. The company had a separate power supply division that provided batteries for other groups within the corporation. Information reached the product team that the power division was investigating three unexplained fires involving spontaneous combustion of a battery. It slowly emerged that these incidents, although only affecting a tiny fraction of the 30,000 products in market, had been known for months but the need to identify the root cause stopped the information flowing through to other parts of the business.
The immediate safety issue for the product team was that their cameras were portable and were regularly flown around the world as carry-on luggage and the result of an in-cabin fire could be catastrophic. The issue of failure to inform the product team was exacerbated by an internal cultural need to define responsibility and ownership that overshadowed the wider customer issues.
Internal reputation risk overshadows bigger issues
Having isolated the manufacturing issue, the battery division withheld updates on when they could supply replacement batteries and signaled that they wanted the replacement to be done ‘quietly’ without public announcement, which raised red flags for the in-field product team. Many of these products were sold directly but an increasing number were through a dealer and affiliate base whose customer database wasn’t available to the product team so couldn’t be notified of the risks, and the company would have had to rely on word of mouth at the risk of further incidents. The internal reputation risk that one division was facing was overshadowing the real business risk and brand reputation crisis faced by the whole company - yet even escalating the issue to senior division management left the battery division unmoved. They said it would have to be a quiet program because then the battery division could control availability of replacements.
From the teeth of disaster to positive brand equity
The impasse needed to be broken and so the product team decided to involve their legal colleagues, outlining the worst-case risk scenarios. Legal liability for executives became the most effective lever and the lawyers went into immediate action. They informed senior management and directors that they likely would be held personally liable for damage to people, property and potentially for loss of life by not acting on information they already had. Leaders could face jail time.
The product team were also accelerating towards their biggest trade show of the year where journalists would be particularly active and where carefully cultivated relationships with the media could evaporate if the story broke in an uncontrolled manner.
Opposition to public announcements quickly fell away and a comprehensive comms and replacement plan was put in place and communicated first internally, then to channels and other stakeholders - and most importantly to the press. A potentially dangerous situation was avoided and a story about the company reacting to a low-risk issue by wholesale replacement ultimately enhanced the brand equity and respect amidst the press corps and kept direct and channel sales buoyant.
Who bolts the stable door?
From this case we learn how important it is to have positive relationships across different teams and leadership groups, where a colleague’s reputation creates trust in their professional judgement on the wider consequences of management decisions. Calling on your peers in another group through formal and informal networks can open-up internal communications channels and create the leverage and partnerships necessary to influence decision making within a corporate hierarchy.
Legal teams know about corporate liability; PR teams know about reputation and likely media reactions; brand and marketing experts can show how an action or inaction can damage the brand; and operations/technical teams often understand better than anyone the impact of a product or service interruption to business continuity. All of these leaders have a contribution to build broader context for the factors that drive a corporate crisis response. Establishing trusted relationships across teams far in advance of any pre-crisis situation is good planning, so when something does happen this isn’t the first time you’re finding and making contact. Essential to this empathetic engagement is understanding who must make the timely calls at which moments to avoid paralysis of decision making.
Scenario training is an essential part of understanding each departments' needs and interdependencies during a crisis, mitigating delays by communicating the right information in the right format. Meeting often to update each other on organizational or operational changes that might affect a crisis response will help you manage a crisis professionally and with the minimum of disruption based on current understanding – and chain of command means sharing your list of deputies that may be different from the org chart, so you have informed back-up ready to act.
