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Creating the 'Crisis-Ready' Organisation

By Steve Macaulay

first aid box on pavementCrises happen. Organisations might like to wish that they didn’t, but the reality is that the unexpected has an unhappy knack of occurring.

From 9/11 to the horsemeat scandal, and from BP’s Deepwater Horizon misadventure to the High Street retailers caught up in the aftermath of the April 2013 collapse of the Rana Plaza garment factory in Bangladesh, business after business has suddenly found itself in urgent crisis management mode.

The consequences of crises aren’t pleasant—even when there is no loss of life. Financial fines and penalties, for instance. Reputational and brand damage. Lost production. Law suits. Management resources devoted to dealing with official investigations and audits. And so on, and so on.

In short, any organisation is at risk of finding itself at the centre of a damaging crisis, calling for urgent crisis management. And given the immense variety of the potential crises that could afflict an organisation, it’s difficult—if not impossible—to have a pre-prepared crisis playbook to hand.

What to do? Research suggests two organisational models that can both minimise the probability of crises occurring, as well as making crisis management easier.

The good news: leadership and development professionals have a role to play in facilitating the development of both organisational models.

The high-reliability organisation.

Born on the deck of a nuclear‑powered aircraft carrier, the idea of the high-reliability organisation may not appear to be relevant to most ‘normal’ businesses—and indeed, the concept is widely misunderstood, even by leadership and development professionals.

Let’s be clear: the high-reliability organisation isn’t about creating an environment in which mistakes and accidents never happen, and in which crisis management is unnecessary. On the contrary, one of the key features of a high-reliability organisation is its preoccupation with failure: it knows that things can go wrong, and so is constantly on the lookout.

In other words, in a high-reliability organisation, errors are expected. So when things actually do go wrong, organisation is prepared. The crisis management response is rapid, the damage is minimised, and the lessons are applied rapidly to prevent a recurrence.

Moreover, another powerful feature of a high-reliability organisation is its deference to expertise, which means giving decision rights to those closest to the action—regardless of their seniority. To see what happens when individuals aren’t empowered to act, look no further than the movie of the Deepwater Horizon blowout. In one scene, a junior control room operator decides to seal the oil well which is fuelling the fire. But her colleague prevents her from doing this because “We don’t have the authority”.

The built‑to‑change organisation.

Many organisations can be considered to be ‘built‑to‑last’ organisations: they place a premium on stability and predictability, and they have hierarchal structures, in which people with detailed job descriptions follow standard operating procedures. Life should have no surprises.

But life, as we know, isn’t like that. You can’t avoid crises by deeming them impermissible.

And worse, the loss of flexibility in built-to-last organisations is not helpful at times of crisis management, when an organisation may have to respond rapidly to unpredictable events. The last thing you want in a crisis is a member of staff at the centre of the action saying, “That’s not my job”, or “That’s above my pay grade”, or “I need to wait for directions”.

Instead, crisis-ready organisations aim to become ‘built-to-change’ organisations, replacing detailed job descriptions with goals and objectives; replacing hierarchal structures with process-based cross-functional networks, and hiring quick learners with initiative who like change and development.

So which is best? And how to get there?

So should your organisation aim to become a high-reliability organisation, or a built-to-change organisation? Perhaps surprisingly, the answer is neither—or at least, not in isolation.

That’s because research suggests that one of the most powerful ways to improve an organisation’s crisis-readiness is through adopting a combination of both the ‘high reliability' and built‑to‑change organisational models.

Nor is this expensive, or difficult if you rigorously follow through certain approaches and steps. Most of the necessary steps involve making changes to human resource management policies and practices: granting decision rights, swapping job descriptions for individual and team goals, revising hiring criteria and rewards systems to encourage change and agility, using process and network structures and cross‑functional teams, and developing shared leadership.

How can leadership and development professional help with this? Here are three suggestions to think about:

  • Consider reviewing with your senior management: are you a ‘built‑to‑change’ organisation, or ‘built‑to‑last’ organisation?
  • What organisational changes would help the organisation to improve its crisis-readiness?
  • Examine what would have to change in the organisation in order to help it become a high-reliability organisation.

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