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Stop with the Spin

August 25, 2010

The Sunday business section of The New York Times featured a long article by Peter S. Goodman looking for lessons in the ruins of the failed crisis management efforts of Toyota, BP and Goldman Sachs (among others). Sadly, the piece overlooked the most important lesson we could take from these debacles: Look before you leap.

Goodman’s informants, like too many others, describe the jobs of crisis management practitioners from the limited perspective of what happens after the crisis become apparent to others. This narrative suggests effective crisis managers do little more than help their clients or bosses face facts, accept responsibility and chart a clear and direct course to safe ground. For this reason alone, they start from the flawed premise that the primary objective of crisis management is to protect — or failing that to restore — the tarnished image of the poor company and its executive whose best laid plans somehow went awry despite their best intentions.

To the extent that this position represents crisis management orthodoxy, it casts the affected company in the position of victim not villain. Sadly, most crises cannot be resolved by sinking to such simple tactics, especially when real victims are left with little recourse but to lick their wounds and hope someone will come along to make them whole again sooner rather than later.

Crisis management is not — or should not be — a separate and distinct discipline occupied predominantly by flaks and fixers. Clearly, many who labor under this label have little more to recommend them than their experience spinning for others or keeping them out of courtrooms rather than actually taking responsibility. Real crisis managers though are closely related to risk managers and emergency managers, both of whom take a comprehensive approach to their fields, which requires them to consider ways of preventing and mitigating harm before things start to become unwound.

Emergency managers think in terms of risk reduction, readiness, response and recovery (or prevention/mitigation, preparedness, response and recovery if you prefer). Crisis managers would do well to think in terms of awareness, ambiguity, adaptation and accountability. Conventional crisis management as practiced by spinmeisters and pettifoggers focuses on the external side of the crisis management diagram.

Crisis managers cannot, however, afford to overlook internal dynamics any more than they can afford to worry so much about what people will think tomorrow that they fail to do something constructive today. As such, crisis managers can play important roles helping organizations design effective monitoring systems that anticipate problems, amplify weak signals, appreciate their salience and ask (or inquire) actively what can go wrong and what should be done to avoid or control it. When problems emerge, effective crisis managers seek to promote and institutionalize organizational learning from the outset rather than rushing to deflect responsibility or avoid accountability.

Goodman and his experts wonder whether the problem is not what people could have done to avoid the problems they created, but whether the consequences of bad decisions are sometimes so riveting or revolting they make it impossible to change the subject. If that’s true in any way whatsoever, then those responsible for the decisions that led to these disasters should have considered such possibilities before things started going wrong.

How, you wonder, could anyone have foreseen such devastating effects from the actions of these companies and their executives? In hindsight, as Goodman and his experts note, it is all too clear that all these situations were both foreseeable and avoidable. But let’s give them the benefit of the doubt, if only as a thought experiment, to see what would happen if we assumed everyone did everything they could to prevent these disasters from happening. Why should this have stopped them from asking what they would do if their assumptions proved incorrect?

This is not such a far-fetched idea. Building codes require designers to consider the effects of earthquakes, which people cannot prevent. But they also require designers to protect a building from fire, which the occupants presumably can control. That’s right, we do not allow people to assume they will always be successful avoiding or controlling fire hazards. We require people to pursue fire prevention measures diligently. At the same time, we still require the same people to take reasonable precautions against the outbreak of fire so people can escape without injury and any fire can be controlled before spreading to the property of others.

We apply very similar logic to many other complex risks. When the stakes are big enough or the consequences terrible enough we ask people to do everything they can to avoid a problem while still taking precautions against its occurrence. Often these added investments prove unnecessary, but we rarely consider them entirely unwise.

Any company, institution or individual unable or unwilling to take a comprehensive approach to managing its crisis exposure leaves no one else to blame. We cannot blame the regulator or the consumer. We cannot assume bad things sometimes happen to good people. We can only make sure we hold good people accountable for becoming better people when they make big mistakes so others won’t have to suffer the same fate in the future.

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