Why businesses stumble in a crisis
Last time, we looked at the three steps required to recover from any crisis:
This seems pretty straightforward, yes? So why do so many leaders, not to say entire executive teams stumble so badly when faced with a crisis? Why is it apparently so hard to pull out of a skid, regain direction and control and move on?
The reason – and the reason News International, Penn State, Olympus, RIM and Kodak all, to one degree or another, foundered in a crisis – is because of the different skills required for each recovery step:
Achieving clarity in the midst of a crisis is a Visionary trait. From their strategic perch 30,000 feet up, the Visionary is best placed to map out the lay of the land and to see both where the organization is, and what direction it needs to go in, to pull out of the skid.
Setting direction is an Operator skill. The almost physical act of wresting the organization on to the ‘right side of the road’ and out of danger requires relentless strength, energy, persistence and fearlessness – all classic Operator traits.
Re-establishing control needs a Processor at the helm to set in place the systems and processes that not only ensure the organization pulls out of its existing tailspin, but that it doesn’t hit the same patch of black ice again.
Why did News International stumble for so long before finally achieving clarity and realizing the depth of the phone hacking scandal? Because Rupert and James Murdoch, the two NI executives in charge, are both classic Operators, and they believed the only thing necessary was to grab the steering wheel firmly and drive through the mess (Direction). A Visionary would have seen the problem was much deeper than that (Clarity).
Why did the Olympus scandal drag on and on for so long – and still seems not to have been fully addressed? Because their ex-CEO – a Visionary – saw the problem early on (Clarity), but the board – a bunch of Processors – moved straight to Control without first establishing a new Direction.
Why has RIM stumbled seemingly endlessly for the last three years? Because the senior executives are dyed-in-the-wool Processors (an org chart with co-Chairmen, co-CEO’s and co-COO’s? Only a Processor would put something like that together). As a result, no-one has real clarity about the depth of the problem they face.
Next time, we’ll look at how companies have successfully dealt with crises – but in the meantime, what do you think? How does a company avoid the V-O-P blind spots that trip it up when it hits a crisis?