In my last blog, I suggested seven simple principles for ensuring that we have a prepared mind:
- Have a plan for when things go wrong – and rehearse it;
- Get the right people together;
- Be open, be transparent;
- Act early, act decisively;
- Don't forget discoverability; and
- Understand and accept fully the implications of accountability and responsibility
First, our organisation and those representing its interests need to have a plan for when things go wrong – and rehearse it.
The plans that we write comprise the mechanics and principles for dealing with potential crises.
For example, who is needed around the table to handle the crisis – typically the CEO’s team from all relevant disciplines – and how they can be contacted on a Friday evening. Because that is when dramas unhelpfully tend to surface. And if any member of the team is not contactable, their deputies, and how they in turn can be contacted 24/7.
Also, key stakeholders – those connected with the organisation in one way or another. All those who would expect to hear bad news from us, rather than picking it up on the news on Monday morning. And who holds the relationship with each of them. And guidance on responses to a wide range of potential dramas.
The benefits of having a plan are both practical and psychological. Practical, because it provides time and space to those on the crisis team to think, to work as a team and concentrate on the issues quickly – rather than on the mechanics which have already been put in place through the plan.
Psychological, because it reduces the likelihood of brain-freeze and bestows mental agility. It also enables people to think further ahead. This is necessary in a crisis where the natural tendency is for people to shorten their timeframes to concentrate 100% on the here and now.
But there is usually a longer-term consequence to a crisis, whether reputational, financial or legal, that is best thought about early.
People do know they should have a plan. According to the London Prepared initiative, 84% of managers agreed that having a business continuity plan helped reduce business disruption. Yet only 27% had such a plan in place.
However, the plan is not designed to cover every contingency. It would be so full of detail that no one would read it. It is not a black book that provides a list of everything to be done in every crisis. Herewith two examples from my own experience.
First, in response to the occupation by our employees in one of our factories in China, who were dissatisfied with their severance pay – I flew out there, met our local lawyer and spent time with local authorities to try to resolve the issue. We went to arbitration and resumed production after several months.
In the meantime we faced complaints by an angry wholesale customer whom we were failing to supply. Counter-intuitively, we decided to put them in contact with our main competitor. That was making a virtue out of necessity; we decided that the customer would probably contact our competitor in due course. After we had resolved the issue and resumed production, the wholesale customer came back to us, out of gratitude.
In the second example, we had to deal with the impact of the Arab Spring on our 600 software engineers based in Egypt. Everyone’s top priority was rightly to keep their people safe. Our competitors pulled their people out. But we found a way to ensure our people’s safety and at the same time enable them to continue to work, whether from their homes or in safer offices nearby. We looked after their families. We kept our people safe, we did not break our contracts with our clients and we took business off those of our competitors who had left.
This illustrates that a benefit of the plan is to give people the time and space to think out of the box in order to determine the best solution.
But, for the plan to work, it needs to be kept alive and in people’s minds. The sort of scenario-based workshops that we provide are the best way of doing that.
BP’s Deepwater Horizon crisis provides another commercial example of where such workshops would have been extremely valuable. I was shown around BP’s offices in St James’s Square some time before the crisis. BP had a crisis plan and a pre- prepared crisis room. They had four massive white boards on the wall, placed according to the priorities for dealing with a crisis: people first; then environment; then reputation; and, finally, business.
So why didn’t the plan work? Perhaps because it was disregarded on the day, perhaps because of personalities, perhaps because the knowledge that a plan existed – however unrehearsed – imbued decision-makers with a fatal complacency. Occasional and short workshops with all relevant decision-makers around the table would have overcome all these obstacles.
So, if people and businesses decide not to have a crisis preparedness plan, then at least they should – as a team or as a board – devote some time at frequent intervals to consider the ‘what ifs’.
The Army has such a system enshrined in its doctrine. Leaders at every level of command giving orders for an operation are obliged to include a section entitled: ‘actions on’. That has to cover everything that might go wrong: loss of communications, ambush, wounded man, lost person etc. And to include a solution for each of those. Those being briefed are expected – indeed obliged – to express their concerns immediately, if they are not satisfied that the boss has covered all contingencies fully and feasibly.
John Deverall CBE is a member of the Resilience First board. He leads Deverell Associates (www.deverellassociates.com), helping family offices and their advisers to deal more effectively with risks. His company’s motto is “The Prepared Mind”.
This blog is adapted from ‘The ‘prepared mind’ at a time of crisis’ by John Deverell, taken from the ninth issue of the new The International Family Offices Journal, published by Globe Law and Business. See www.globelawandbusiness.com/journals/the-international-family-offices-journal
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