Crisis Management
Crises create conflicts within and between organizations. Examples include Apple Newton, Betamax, the Challenger disaster, the Edsel, New Coke, Operation Market-Garden in WWII, thalidomide, and Watergate.
They take many forms (Figure 9.1) and often lead organizations to develop manuals spelling out policies and procedures for specific cases (Chapter 10 discusses the special case of hostage negotiations).
At the national level, the stakes are high, the planning is extended, and the implementation is complex. During the 1930s, the US developed several “Color Plans.” Among them was Plan Orange for war with Japan and even Plan Red in the unlikely event of war with Britain. There also were “Rainbow Plans” for wars against two or more countries, such as Red-Orange for war with Britain and Japan. There was no plan for war with Germany, which the terms of the Versailles Treaty made an unlikely threat—until Hitler ignored the treaty. Plan Red-Orange, which envisioned defeating the European enemy first, guided US war plans for World War II. The plan remained general until Under Secretary of War Patterson recognized the need for a detailed top-secret “Victory Program” that coordinated political objectives, military strategy, needed military forces, how the three were to be constituted, equipped, and trained, and the lead-time required. George Marshall assigned Albert Wedemeyer, then a lowly colonel but knowledgeable in military history, geography, economics, and science who also had attended and graduated from the German Kriegsakadamie. In an underappreciated accomplishment, he and his staff completed the plan in three months on 25 September 1941, 83 days before Pearl Harbor (McLaughlin 2012).
Similar plans for all sorts of contingencies were in place throughout the Cold War and following it, including one that conspiracy-minded people wrongly see as evidence that the US was determined to find an excuse to attack Iraq in 2003. Merely having a contingency plan does not signal intent.
Predetermined plans are vital to rapid response in emergencies, as available time will be much shorter than the years needed to equip and train personnel (McLaughlin 2012). Failure to have plans ready, personnel on call, and equipment and supplies warehoused often results in disaster. However, merely being prepared does not ensure leadership will implement the plans, as demonstrated by Hurricanes Katrina in 2005 and Sandy in 2012, and the 2012 assault on the US consulate in Benghazi resulting in the death of four Americans including the ambassador.Three events in the 1980s gave impetus to crisis management. The first was Johnson and Johnson’s brilliant handling of the 1982 incident in which a terrorist poisoned a few Tylenol bottles. The second was the disastrous handling by Union Carbide of the 1984 Bhopal disaster. The third was Exxon’s excellent technical but poor public relations handling of the 1989 Valdez oil spill.
The key factors to take into account in developing a crisis management plan are the (1) possible types of crisis (Figure 9.1), (2) threat each type poses to organizational survival, (3) required response time, (4) ability to control events and (5) range of possible responses. Burnett (2002) recommends quantifying the severity and probability of each possible crisis then factoring in control and response time to determine planning priorities.
At the risk of stating the obvious, the best way to manage a crisis is to prevent it. Should that fail, the second step is to have spelled out in advance what each staff member must do in each likely crisis, the equipment required, and where to store it. Equipment is useless unless people know how to use it. Plans are useless unless everyone knows their primary and backup assignments and has practiced carrying them out. Even if an unanticipated crisis occurs, the preparation for likely ones will leave staff better able to adapt and cope.