Podcast: Everything you should now know about crisis management

 

RiskACUMEN podcast: Episode 7 transcript

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Johnny Thomson  00:01

Hello everyone and welcome to the RiskACUMEN podcast, which offers thoughtful insight around risk engineering and management. I think it's fair to say that the past 18 months or so have contributed greatly to our understanding of the word crisis. However, the knowledge and experience of my guest, Jonathan Hemus, in terms of crisis situations, extends way beyond most. Jonathan is MD of crisis management, planning, training and consultancy firm Insignia. He's recently published an award winning book on the subject, and he's kindly agreed to talk us through some of it today. Hi, Jonathan. Thanks for coming on the show.

 

Jonathan Hemus  00:40

Hi, Johnny, really great to be here with you.

 

Johnny Thomson  00:43

Brilliant, now before we get down to talking about crisis management and why it's useful topic for us all to have some knowledge around, tell me a little bit about you and your company Jonathan, and how you came to be well, a crisis management expert for want of a better expression? 

 

Jonathan Hemus  01:01

Yeah, I don't think anyone plans as a teenager to be a crisis management consultant. And I guess the reason I ultimately ended up here was that I was fascinated at university having done a business degree in business, people and communication. So originally, I began my career in corporate communication, working in house and then in consultancy. And the bit that really fascinated me in those early years in consultancy was crisis communication and crisis management. It was the moment when reputations were on the line and the behaviours and actions of leaders really made a difference to both their organisation and their stakeholders. And it was that that led me to become head of crisis and issues management at a business called Porter Novelli, a global consultancy, and then to setting up Insignia 13 years ago. And effectively what we do is we help our clients businesses like Cathay Pacific, DP World, Lidl, NFU Mutual and Stagecoach to do and say the right things on the worst days of their business lives. And as you mentioned, we do that through planning, training, exercising, and sometimes advice during a crisis. And our goal really is to give those clients the confidence and capability not just to protect their businesses, their reputation and their value. But also the stakeholders who all too often all too, sadly, can be negatively affected by a crisis.

 

Johnny Thomson  02:41

I would imagine a lot of people listening can identify with what you said about your career in terms of being drawn towards something that makes you feel like you're making a difference. So yeah, that's great. Now where I'd like to begin, if that's okay with you, is with a phrase I've heard you use often, that phrase being fatal flaws. And why do organisations often struggle with crisis management and what tends to be the biggest mistakes Jonathan?

 

Jonathan Hemus  03:12

I mean, it's a great question. And it's one which baffled me in my first years in crisis management, because we've all seen the lessons of crises handled well and handled badly over the years. And yet it seems that the same mistakes continue to be made by smart, successful leaders. So yeah, why is that? And I think it's down to two interrelated factors. One is that a crisis by its very definition, is an extraordinary challenge. It is not something that leaders are dealing with all of the time. And they're having to deal with a situation whereby they have a lack of information, a lack of time, intense attention and demands from all manner of stakeholders. And everything is on the line, not just the business reputation and value, but also the reputation and potentially careers of those leaders who are handling that extraordinary challenge. So therefore, it's not surprising that they are under incredible stress and pressure and that maybe they're not thinking quite as clearly as they would ideally want to do. That's the first bit, the kind of emotional state that leaders tend to be in and you then add to that, that sadly there are still some organisations which do not prepare for crisis. And so they are having to handle this extraordinary maybe once in a career challenge without having developed the plans, the capabilities, the confidence the people the tools they require to be able to respond to that challenge. Because business as usual ways of working won't cut it in a crisis. So all of a sudden, it becomes less surprising that businesses and their leaders get crises wrong. And the kinds of things that we typically see, when they are struck by that extraordinary challenge are, for example, paralysis, nothing seems to be, you know, done or said for far, far too long. And I think, a good if I can use the word good here, a good example of that, from the last few years is the is the Boeing 737 Max, were Boeing one of the world's most successful, proud organisations with a fantastic reputation, allowed themselves to react to a situation and respond all too slowly to something which has done enormous damage to that well established organisation. So taking the ostrich approach is one very typical outcome of that stress and that inability to do and say the right things. Second, one would be acting without thinking. So for those that don't freeze, the other, one of the other common flaws is just simply to start doing things, but not necessarily doing the right things. You know, we just want to fix it, but we're not doing that within it within any sensible framework. And I guess the third thing, and there are many others, but I don't want to spend all of this podcast answering this, this single question Johnny. But the other thing that people tend to do is they tend to react to events, rather than shaping them. And the only way of succeeding in a crisis is to exert influence over events rather than being swept along by them. And one could probably point to a number of governments around the world who maybe could be accused of having done that, during the recent pandemic. Waiting for things to happen, before taking decisive action, rather than getting ahead of the game, and trying to shape the way things play out. So those are just some of the fatal flaws that we observe in a poorly handled crisis.

 

Johnny Thomson  07:24

Okay, so that that covers some of the negatives. And as you said, we could potentially dwell on those for a long time, but let's not. Let's cover some of the positives as well. And so the reverse of that, what are the kind of critical success factors?

 

Jonathan Hemus  07:40

So the first and in my opinion, the most critical thing that organisations need to do in order to successfully manage a crisis is to do their planning, training and exercising beforehand. I liken a crisis to for example, if you're a football team being asked to play in the final of the World Cup. In other words, this is the highest profile, most important match in the case of the crisis, most important event, in this organisation's history. This is a moment which will define the organisation for a long time. If you were a football team, playing in the World Cup final, you would probably have decided your tactics in advance, you would have probably had a bit of a kick around beforehand to rehearse those tactics. And you might have done a little bit of training to make sure that you are in peak condition for that football match. So...

 

Johnny Thomson  08:40

Don't mention penalties Jonathan!

 

Jonathan Hemus  08:43

I'm not going to talk about penalties. So, why would you as an organisation facing the most critical, most important, most intense, most eagerly watched situation in your business's history expect to be able to succeed without planning, training, rehearsal beforehand. So that is the single most important predictor of success in the crisis. But if I move into the kind of crisis response itself, three or four things that I've observed over the last 30 years to be critical success factors. One, in the very early stages of what appears to be a crisis, assume the worst. Assume that it is a crisis, rather than assume that it isn't. And therefore, activate your team and be ready to respond at the earliest opportunity. If you delay, delay, delay, delay, keep your fingers crossed and hope for the best, it may go away or alternatively you may be so late in responding that you've lost it already. So treat an emerging incident or issue as though it is a crisis, get your team ready to respond if not actually doing or saying anything externally first, at least getting the team ready to respond. So that would be the first thing. The second thing, and that this is the antidote to acting without thinking, is to set what we call strategic intent. Strategic intent is very simply at the beginning of a crisis or an issue, articulating and sharing amongst your team - what does success look like at the end of this crisis? So we look a month, three months, six months ahead and say, what is it we're seeking to achieve? How will we evaluate our success at the end of this crisis? And the beauty of doing that is is at least twofold. Firstly, it aligns the entire team around the same goal, rather than everyone making their own assumptions about what the goal is. And secondly, and this is really helpful and enables you to make quicker progress, it enables you to benchmark any decisions you need to make against their likelihood of achieving the strategic intent. So for example, if your strategic intent is as simple as to retain your customers' trust, let's assume that you're a food manufacturer and you've got to decide whether or not to do a product recall around a product which appears to be contaminated, but may not be. If your strategic intent is to retain your customers trust, you will probably make the decision to do the recall, if your strategic intent had been to minimise the cost of this crisis, you might decide not to. Now, that wouldn't be my advice in any case, but knowing what success looks like makes those decisions that little bit easier.

 

Johnny Thomson  12:00

Yeah, and of course, after what all of us have been through in recent times, I would have thought most people would appreciate the need to be ready for any kind of crisis situation. But tell me about the importance of getting executive buy in here?

 

Jonathan Hemus  12:18

I mean, getting executive buy in is critical. The very best leaders just simply know that crisis management is important. And the best CEOs are the ones who are first through the door on the day that the crisis simulation is being run and the ones that create what we call a crisis resistant culture. And by the way, setting the right culture in which crises can not only be handled effectively, but actually can be prevented is the best form of crisis management of all. So having that senior buy in support, and active leadership can you know, transform an organisation from one which addresses crisis management as a box ticking exercise to one which is truly resilient and which has truly minimised the potential for crisis and its possible impact on the business. Getting that executive buy in, particularly for leaders, which maybe, who are maybe not intuitively or instinctively tuned into crisis management, I know, can be a challenge for risk managers and others with crisis management as part of their brief. And I guess, ultimately, if I'm realistic, you can lead a horse to water but you can't make it drink. If, if a leadership team simply is close minded to the idea of preparing for a crisis, just, you know, can't believe that this could happen to them for whatever reason, then sadly you may be fighting a losing battle. But in many cases, the executive team are persuadable and influenceable, even if they aren't those instinctive leaders of crisis management within organisations. And here are two or three of the ways that, you know, we've helped to achieve executive buy in or we've seen our clients achieving executive buy in. I know on this podcast, Johnny, we're talking to risk managers and maybe some health and safety managers and a number of other professionals involved in risk and crisis management. And I think one of the most powerful ways of engaging leaders is to form alliances within your organisation amongst those job functions that have an interest in crisis management and a passion for it. So yes, I'm talking about the risk managers, the health and safety managers, the communication managers, the security managers, all of those people within your organisation, as I say, that have a stake in crisis management. And I think presenting a united front and a collaborative front can be really, really powerful rather than each of those individuals making the case for their bit of crisis management actually to form an alliance that I think is a very productive way of approaching it. Second thought would be that getting your timing right to grab the execs attention is really important. And you mentioned in the intro Johnny that, you know, we are seeing significantly increased interest in crisis management simply because the pandemic has proven once and for all that bad things can happen, and they can happen to all organisations. And so, you know, lessons by many organisations have been learned. And, you know, that's one example of, I guess, a kind of a silver lining out of a crisis in which organisations are now taking this opportunity to make themselves more resilient, and more prepared for the next crisis. But another good example would be, when a competitor suffers a major crisis, issue or incident, I think we all find it easier to relate and kind of make sense out of situations which affect people and businesses like our own. And I know with a number of our clients, whether they're you know, an airline or, or a retailer, when they see a competitor or appear, suffering serious challenges or serious harm as a result of a crisis, it can be a great opportunity for our client to say to the leadership team, let's take a look at what's happening there. Let's have a session on how we would have dealt with such a situation, how well geared up would we be to succeed where our competitor is perhaps failing. So I think that's a really good opportunity to grab their attention. And the third and final example of how to gain attention, and this isn't just vested interest, but I think sometimes bringing someone in from outside to give a different perspective can actually grab executives attention. That doesn't have to be consultants, it could be again, a peer, or someone that your leadership, team respect, who has been through a crisis, can share their experiences. So, for example, we ran a webinar recently with the head of communication from Norsk Hydro, the aluminium manufacturing company who were victims of a major ransomware attack. And she shared exactly what they've been through and how it impacted them and what they did and what worked and what didn't. And it's been really heartening that lots of our clients, and indeed non-clients, have used that webinar, they've circulated within their own organisations and it's been really helpful to them, to grab the attention of their bosses. And, you know, to say, look, we're all concerned about cyber incidents, this is what happened to another organisation, what might that mean for us?

 

Johnny Thomson  18:24

Yeah, brilliant. One other key area and it links very much to what you've what you've just said about interested parties, and so on. And I think this will be relevant to members of the audience as well, whether they're risk managers, health and safety practitioners or even those external people that you mentioned, such as insurance underwriters and brokers and so on is, is understanding overall, what makes a good crisis management team?

 

Jonathan Hemus  18:50

Yeah, yeah. So some thoughts on that. And I think my first recommendation would be that you should define roles on your team beforehand, but you should not assign any single individuals to those roles, because you can absolutely guarantee that on the day that the crisis happens, the absolutely critical person who has been assigned to a particular role and has been fully trained on it won't be available. So, define the roles and the responsibilities associated with those roles, but train and brief at least two, if not three people to fulfil that role. And even for small businesses, it may be that a single person is briefed and trained to play multiple roles within that team. So it's not about saying you have to have, you know, 100 people available, but you do need to have the flexibility to build the right team, even when people who you might perceive as critical or not available. So focus on roles rather than people. And within those roles, there will tend to be two types of roles or two types of team members, those that are playing roles which will be present on every team. So that would include the chairperson, the crisis coordinator, the administrator, and the spokesperson, for example, and there are others. So those roles will typically be required on every crisis team. And they're kind of generic, there will also be specialists who need to be added to the crisis management team based on the specific nature of that crisis. So, for example, if it is a cyber incident, clearly, your most senior IT or technical person will need to be part of that team. In many cases, you will want your lawyer as part of that team. Again, in many cases, you will want someone from HR as part of that team, but they are there because of their specialist expertise. And they are subject matter experts, rather than playing one of those more generic, but critical roles within the crisis management team. The other things I would say about about roles and individuals on a crisis management team is firstly, that clarity around who is doing what, is so important in a crisis. You don't have the luxury of too much resource or too many people. And so therefore, everybody on that team needs to know exactly what their roles and responsibilities are and stick to their lane, you don't want duplication of efforts. And that comes down to two things. Again, it comes down to training and briefing beforehand. But it also comes down to clarity, precision, and really good team discipline and focus within the crisis management team, during the meeting to be very clear about who has been assigned which task, and which action and being very prescriptive about that. The second thing I would say is I've talked a lot about roles and job functions, you ideally want a diversity of personality types and styles within within your your team. If you have, you know, a team full of stereo typically alpha males, for example, then you know, you may get some very quick decisions, but you may not have done the empathising and the thinking and the consideration that needs to go into those decisions. So decisiveness and willingness to make you know, decisions and take action is one of the traits that you want to have within your team. But a more reflective style is also important, someone who can see the bigger picture or can see where this crisis might go to next. So you want analytical people, you want creative people, you want decisive people, you certainly want communicators, so you are looking for a good balance of personality types within that within that team. And finally, when thinking about, you know, creating your crisis management team, it's about during the crisis, getting the best out of that team. And I've already touched on the importance of kind of clarity and precision in determining who is doing what the role of chair person is a critical one, because they are balanced on a tightrope there in terms of getting the best out of their team. The tightrope is, is this. One, you want to get the views and the expertise of everyone around that table, whether it's a physical or a virtual table, into the meeting in order to make the best decisions. But, you need to get that input and expertise onto the table and to a decision relatively quickly. So maintaining that fine balance of being the kind of chair person who actively takes people's views but is able to keep the meeting moving and to in an appropriate way, make sure that the individual gives gives their views in a crisp and concise manner, that is, you know, a hard hard ask, but the very best crisis team chair people are able to do that.

 

Johnny Thomson  24:54

Now, now, Jonathan, obviously we can talk probably all day about this. There's so many different subjects to cover. So it's probably worth mentioning, as I did, at the beginning now at this point that you've written an award winning book, which is called Crisis Proof, and has a wonderful subheading as well, how to prepare for the worst day of your business life, which is a great summary line. I know it won the Specialist Book of the Year category or this year's Business Book Award, so congratulations with that. 

 

Jonathan Hemus  25:22

Thank you.

 

Johnny Thomson  25:23

And having read it, I can understand why, because it's really well written for people like me, I suppose, who are not necessarily risk experts but who would certainly benefit from having a solid base of knowledge around the subject. So business people and people who perhaps manage other aspects of the organisation like we've touched on operations, HR, safety, and so on, and those supporting stakeholders like insurance people, and risk managers, of course. I think it does a terrific job of summing up the key aspects of crisis management and puts it all into a nice logical order as well. So, so many thanks for that. And so before we finish, just tell me a little bit about the book, from your perspective, what else it touches on and why you wrote it.

 

Jonathan Hemus  26:11

Yeah, so why I wrote it? Aell, I touched on this in my intro, but ultimately, the reason that I do what I do, is to try and end the needless damage to businesses, their reputations, their their business value, but just as importantly, if not, more importantly, those stakeholders who may lose their jobs may even lose their lives, their homes, their environments, as a result of a mishandled crisis. So I do what I do, in order to try to reduce or maybe even one day ultimately remove that needless harm that is caused. And one of the things that, you know, I've come to understand over my 25 years in crisis management is that actually, very few organisations have a dedicated permanent head of crisis management.More often than not, the job of being responsible for crisis management, even within big organisations, is given to an already busy but successful and professional executive who because they're very successful and, you know, always get a job done, are singled out as the person who can also take on the crisis management brief. But if you're the risk manager, although your you know role very much touches on crisis management, you may very well never have been trained in crisis management. And, you know, you may never perhaps even have handled a crisis. So, my book is written for people like that, who have been given the, in many ways privilege, but could also be seen as the poison chalice, of being responsible for crisis management at their organisation. And it is designed to give you the framework, the tools, the processes, the best practices, which will enable you to succeed in the in that role. So it is not an academic textbook, it is not written for my peers, those who are already crisis management consultants, or who specialise in this area. It is designed to be a user friendly, usable book, which enables those non specialist crisis management leads within their organisations to make their business ready for the worst day of their business lives.

 

Johnny Thomson  28:50

Brilliant. Well, as I said, it's, it's a great read, and you know, it certainly fulfils the things that you've talked about in terms of making that making that difference and supporting the people who really need that. You know, I've picked up on elements of crisis management over the years, as we probably all do, but the book really does bring it all together. So that's Crisis Proof, which you'll find on Amazon and other bookstores, of course, and which we're also going to give away one or two copies of, to some of our lucky LinkedIn followers. So just make sure you're following us on LinkedIn. A like or a comment would be nice too. Just saying! And we'll be in touch over the coming weeks with a with a free copy of Jonathan's book. So thanks again, Jonathan. I guess dealing with a crisis is something we've all grown used to in recent months. So it's been good hearing all about ways in which we could probably all get a little bit better at it as well.

 

Jonathan Hemus  29:51

Johnny, it's been my absolute pleasure. Thank you so much for having me on the podcast.

 

Johnny Thomson  29:56

No, thanks, Jonathan. It's been a real, real pleasure chatting to you too. And that's all for the latest episode of the RiskAcumen podcast. If you have any questions or comments around a topic we've been discussing today, or any other risk related content that we've covered, please head to our LinkedIn page. You can find a link at www.riskacumen.co.uk.  And until the next time everyone, goodbye for now.