Proactive vs. Reactive Crisis Management

Bar none, the leadership of an organization is the most critical variable affecting how it regards crisis management and accordingly whether one is proactive or reactive in responding to crises. The difference is between "enlightened" and "unenlightened leadership."

The underlying tenets of so-called unenlightened leadership are as follows:

1. Downplay and disavow the importance of crisis management for as long as possible.
2. Require a repeated series of major crises before one admits that one’s organization is susceptible to crises and therefore needs a systematic program in crisis management.
3. Require a series of major losses before one acknowledges that one’s organization is vulnerable.
4. Downplay the loss of stakeholder confidence.
5. Downplay the loss of employee confidence and departures.
6. Require an endless series of bad news before one is moved to action.
7. Hold that the media is "out to get us."

The contrast with what I call enlightened leadership couldn’t be greater:

1. Learn from the experiences of other organizations both within and outside of one’s basic industry—in short, do everything possible to prevent what happened to others from happening to oneself.
2. Accept that any of the major types of crises can happen to one’s organization; no type should be excluded automatically; instead, continually ask, “What are the forms that a particular type can assume such that they can and will happen to us?”
3. Continually ask, “What can we do to pick up and act more quickly on the inevitable early warning signals that precede all crises?"; "How do we reward the messengers of bad news, not 'kill them'?”
4. Without becoming paralyzed or overwhelmed, imagine and prepare for worst-case scenarios.
5. Set up crisis management teams, or CMTs, across one’s entire organization so that one can manage the damage that crises cause to each and every part. Thus, the heads of finance, IT, security, manufacturing, and/or their representatives, etc. need to be integral members of the CMTs.
6. Integrate crisis management with other key functions such as quality control that the organization already takes seriously so that not only will it be taken seriously, but thereby be an integral part of everyone’s day-to-day job.
7. Make special allowances to include in the planning process those external stakeholders who will be most harmed by crises.
8. Conduct simulations that are as realistic as possible with regard to the actual business and psychological stresses that one will experience.
9. Receive the kind of training that is needed to communicate as honestly and in as timely a manner as possible with the media.
10. Ensure that we will learn the key lessons that crises have to teach so that we’ll be better prepared for the next ones.

To reiterate, the differences between them couldn’t be greater. Enlightened leadership not only accepts the constant reality of crises, but as a result, does everything it can to prepare by making crisis management an integral part of its everyday operations—indeed, its thinking. It accepts that proactive crisis management is not only the “right ethical thing to do,” but it’s supremely good for business, i.e., the proverbial “bottom line.”

Indeed, research has shown conclusively that those organizations that practice proactive crisis management are significantly more profitable. They pick on potential problems before they become major crises, and recover faster—with fewer injuries and losses—from those that still occur despite one’s best efforts.

In order to operate, all businesses and organizations must clearly demonstrate that they are both able and willing to practice pro-active crisis management.