The vast majority of organizational crises are both foreseeable and preventable, when identified early and acted upon. Learn how to build a culture that encourages employees to bring concerns to management’s attention before they become a crisis with severe consequences for the organization.
very day, another organization finds its way into the headlines or viral social posts, embroiled in a once-preventable crisis that threatens its reputation, its financial health and often, its very survival. Especially in this age of instant global communication, no organization is immune. Entire companies and their stakeholders can suffer from the consequences of poor decisions made by people at every level of the organization. Often, powerful cultural influences in an organization disguise the warning signs that can identify the smoldering issues that if not addressed, can spell disaster for the company.
Effective crisis management, and crisis prevention in particular, includes a systemic approach to identifying and mitigating issues to avert a crisis that could adversely impact the company and its stakeholders. We advise our clients to implement an early-warning system to surface issues early enough to prevent or mitigate them before significant damage to the company occurs.
A culture of transparent communication across the organization is fundamental to the success of such a system. Importantly, an organization’s culture plays a defining role in how employees communicate, make decisions and solve problems.
How do you know if the culture in your organization discourages employees from raising legitimate concerns? Consider the following examples:
1. Shoot the messenger – In many organizations, it is common for members of senior management to blame those who bring issues to their attention. In this culture, people learn quickly to keep their mouths shut if they want to stay out of the crosshairs. This kind of fearful silence is toxic to the organization, creating abundant opportunities for manageable issues to become costly crises.
2. Pass the buck – On his desk in the Oval Office, President Harry Truman had a sign that read, ‘The buck stops here’. In other words, ‘I am ultimately responsible’. All too often though, in a culture where people fail to take responsibility for decisions, crises can smolder for months or years before they erupt. Like a hot lava rock, an issue lobs from person to person with no one taking responsibility to cool it down. All the while, the issue grows in size, complexity and intensity until it erupts as a full-blown crisis.
3. Mixed messages from management – The potential for smoldering crises to escalate intensifies when management routinely sends mixed messages to employees. For example, the company product mantra may be “quality first” but when employees are directed to cut costs, take shortcuts or circumvent processes in order to meet a short-term financial goal, the quality mantra is undermined by management actions that create the ideal conditions for a smoldering crisis to grow.
4. Groupthink – Coined by Yale research psychologist Irving L. Janis in 1972, the term “groupthink” refers to behaviors where group members’ desire for unanimity overrides their motivation to consider alternative courses of action. Group closed-mindedness occurs where warnings or other information are discounted or ignored. Groups may apply peer pressure to those who express strong arguments against a course of action, causing individuals to self-censor their concerns.
5. Management by committee – Especially in medium to large companies, management by committee drives individuals to avoid making decisions out of fear of being blamed or fired for a mistake. In this culture, group members may share the blame rather than any one person, but critical decisions are not made and crisis can result.
Changing a culture takes time and often involves some collective pain for leaders and employees alike. Cultural modification is not a quick fix; in a larger company, it can take three to ten years to effect meaningful change (just ask Boeing or Wells Fargo). Clearly then, culture is an important risk factor to consider when developing and implementing an early warning system to identify issues and correct them before they become a full-blown crisis.
In an effective culture, communication is reciprocal, transparent, consistent, frequent, timely, appropriate, managed up and down, supportive and empathetic. When all members of a team, department or organization are able to communicate effectively with one another and with those outside their immediate group issues are resolved, good decisions are made and the company succeeds.
Summary
A business crisis can be a short-term disruption, or it can spell the end of a company. The majority of crises are predictable and preventable. Leaders have a responsibility to manage issues and prevent them from becoming a serious threat to the organization. Cultural norms play a fundamental role in predicting, identifying and resolving issues before they become threats. As important members of the crisis management team, communicators can and should lead by example and work with executive leadership to build the cultural dynamics needed to support an effective crisis early warning system.
