Perspectives

Crisis leadership

Guiding your organization through uncertainty and chaos

From the specter of domestic terrorism, to burgeoning cyberattacks, to catastrophic events that could exceed crisis plans, many companies are increasingly at risk of being felled by crises. And it’s the unseen or unanticipated crises that are potentially the most dangerous. An unanticipated crisis can easily overwhelm contingency mitigation techniques and risk management programs, such as business continuity, disaster recovery, health and safety plans, or emergency response. Management can even exacerbate a crisis if bad news is marginalized or otherwise ignored until it’s too late.

Join us on October 24 at 2:00 pm Eastern for a Dbriefs webcast Effective crisis response: Stacking the deck in your favor. For most companies, it is a matter of when a crisis will occur, not if. Crisis response preparations are important, but what actions can companies take during an event to mitigate damage and preserve stakeholder trust and confidence? Register now and learn about time-tested approaches to crisis response and how companies can adapt them.

Defining the crisis

A crisis—a major catastrophic event, or a series of escalating events, that threatens an organization’s strategic objectives, reputation, or viability—can be one of two types: routine or novel.1

Routine events are the known risks for which organizations can plan and develop procedures. Examples include safety plans for manufacturers or recall plans for food companies. Novel crises are the risks that exhibit unusual frequency and impact. They may be a confluence of two or three events that strike at the same time. Or they may simply be too big or unusual to be imagined. Hurricane Katrina, for example, was a novel event.

For novel events, there’s no experience to draw from to manage or lead in that type of crisis. In the absence of pre-determined procedures, novel crises—whether they be natural disasters, terror attacks, cyber breaches, or malevolence such as shootings or inside sabotage and fraud—can test leadership’s decision-making and strategic-thinking abilities.

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Common stumbling blocks

Leaders are faced with a range of challenges when dealing with novel crises. Despite these very different challenges, and these very different crises, there are some common stumbling blocks:

  • Excessively focusing on fixing the incident, rather than leading the response and addressing the strategic impacts
  • Failing to understand or underestimating the scale, breadth, and speed of the crisis and its unanticipated consequences
  • Making poor decisions and unintentionally causing harm, due to bad or incorrect information in the first few hours of a crisis
  • Not taking the time to make sense of the chaotic inflow of information and answering all the direct inquiries

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Key operating principles

To help companies avoid these stumbling blocks, consider the following operating principles. 

  • Lead decisively—Leading decisively during a crisis is paramount and, as part of that, the crisis leader needs to be identified. Crisis leaders should be decisive, yet also be able to negotiate a delicate balance: React too quickly, and they may act on bad information. Wait too long to receive “perfect information” and analysis paralysis may result in making no decision at all.
  • Continuously frame the crisis—Crisis managers should constantly analyze the crisis and identify it, down to the minutes, hours, and weeks. Rather than holding fast to the first impression and analysis of the crisis, be flexible to new information as it comes along.
  • Actively communicate—Control the message by designating a crisis manager to be the sole spokesperson and to be the source of honest, consistent information. And keep a record of the facts that the crisis manager knows at each point of the process, in order to respond to potential lawsuits that may arise.
  • Be ready for the unexpected—Under extreme pressure, individuals may act differently than normal, and the usual organizational roles may not apply to a crisis. This can further add to the unpredictability of a critical event. To counteract that, any one manager should have limitations and should not be the only one to deal with a crisis. 
  • Drive toward actionable intelligence—When in the midst of a crisis, leadership must often navigate confusing data and intelligence. It’s important, therefore, to cast a wide net, as crucial information can come from a range of sources. But those sources must be qualified, as misinformation can be as prevalent as information.

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Crisis management lifecycle

Ideally, organizations should think of crisis management in terms of a cycle—moving from preparation to response to recovery, and then around again—applying lessons learned from one stage to the plans and processes that support the other stages. By identifying and preparing for strategic risks, and then leveraging a broad portfolio of tools—including simulation, monitoring, response, and communications—the organization can tap into an integrated system that will be at the ready should crisis strike.

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Learn more about crisis leadership

Poll responses

During a January 29, 2015, Deloitte Dbriefs webcast, we asked more than 2,000 C-Suite executives, managers, analysts, and crisis professionals from US and international companies four questions:

  • What type of crisis is your organization least prepared for?
  • In a crisis, who in your organization would lead the response?
  • During a crisis, what do you believe would be your organization’s biggest gap?
  • When did your organization last conduct a simulation of a crisis event?

See the infographic below for a snapshot of their responses.

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Crisis leadership: Poll results

Infographic: A snapshot of a recent poll

​1 Arnold M. Howitt and Herman B. Leonard, Managing Crises: Responses to Large-Scale Emergencies, CQ Press, February 11, 2009.

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