Steve Macaulay and David Buchanan outline five important elements of the forward thinking business.
The coronavirus pandemic has prompted serious rethinking in many organisations, about ability to withstand other major crises. HR and L&D professionals in particular need to reconsider their priorities and their contribution. This article explores how to make your organisation crisis-ready:
- How can we build an organisation that will be able to respond more effectively to just about any unpredictable crisis?
- What roles should HR and L&D focus on?
Features of the crisis-ready organisation
Crisis-readiness means being able to find and implement creative solutions to unforeseen – perhaps unthinkable – problems, quickly. We can enhance an organisation’s crisis-readiness, even we when don’t know the nature of the specific crisis, by focusing on five features that fall under these key headings: structures, communications, workforce, teams, and leadership.
These features build capacity and resilience, enabling an organisation to adapt quickly to unexpected threats. Considered singly, each of these is not enough; it is the combination that makes this approach effective.
Flat, flexible structures empower front line employees to respond quickly to surprising events, by short-circuiting conventional decision making and approval processes. There may be no time to refer issues up a chain of command, to distant superiors who may have little understanding of what is happening on the ground.
A famous example concerns the Piper Alpha oil platform disaster in the North Sea in 1988, which killed 167 people. Following an explosion and fire, the nearby Claymore platform continued to pump oil, making the Piper Alpha fire worse, because the manager did not have permission from the owner, Occidental, to stop.
There are dangers in focusing only on the current crisis. In the context of the coronavirus pandemic, there have been calls to ‘reshore’ manufacturing of critical items, reducing dependency on overseas suppliers. However, to deal with the unpredictable, the opposite has to happen.
Flat, flexible structures empower front line employees to respond quickly to surprising events, by short-circuiting conventional decision making and approval processes.
Diverse supply chains are more resilient. What happens if the next crisis overwhelms local suppliers, and overseas manufacturers are committed elsewhere?
The current pandemic demonstrates the benefits of partnership working. The private healthcare sector has collaborated with the National Health Service. Pharmaceutical company Novo Nordisk and drinks company Carlsberg worked together to convert ethanol into hand sanitiser for Danish hospitals.
Jim Whitehurst, CEO of open source software company Red Hat, describes his company as an “open organisation suitable for the decentralised, empowered, digital age”. Partnership, he says, “responds to opportunities more quickly, has access to resources and talent outside the organisation, and inspires, motivates, and empowers people at all levels”.
In a novel situation, there will be many things that we can’t do on our own, and unlikely partnerships will be necessary. We should start talking about those partnerships now.
The crisis-ready organisation encourages the unhindered use of social media. Many organisations work on a ‘need to know’ basis, holding information back from those who have little direct interest in it. As a novel crisis unfolds, however, it may not be clear what information is important, and who needs to know what.
The ideal approach is transparency; everybody knows everything. When people don’t have relevant information, mistakes happen, wrong decisions are made, or critical decisions are not taken. This is a recipe for information overload. But information can be available at different levels, from outline to detail, with access to the full picture, if required.
Face-to-face is still the richest communication medium we have, but messaging apps (Facetime, Messenger, Teams, Skype, Zoom) are almost as rich, allowing the sharing of verbal and nonverbal information. In the current coronavirus crisis, working from home has been found to be productive.
Your communication plan needs to use the full spectrum, including telephone, email, and documentation. Social media platforms are useful communication and networking tools, which contribute to relationship-building and the exchange of ideas – which are critical in a crisis.
Mastercard offers a ‘Social Media Reverse Mentoring’ programme to older employees who want to become familiar with new platforms.
Workforce composition is critical to crisis-readiness, especially with regard to diversity and inclusivity. Groups with diverse culture, ethnicity, and gender, make better quality decisions, faster, than homogeneous groups.
Diverse groups combine a range of experiences and perspectives, which helps address ‘wicked problems’, where opposing views help to create novel solutions. Age-diverse, multigenerational teams are more productive and have higher job satisfaction.
Diversity is a desirable social goal in its own right, but is central to crisis-readiness. Johnson and Johnson use employee resource groups, mentoring programmes, and ‘Diversity University’, a website that helps employees to understand the benefits of collaborative working.
Flexibility, responsiveness, and creativity are more likely to be found in autonomous, agile, self-managing teams. Working towards an overall mission, these teams are empowered to recruit, select, train, and discipline their own members, and to determine their own task allocations and working methods.
They may even elect their own leaders. Management traditionally resists giving up this degree of control, and thus lose the benefits of rapid adaptability. The leaders of self-managing teams are coaches, coordinators, and problem-solvers, not traditional first line overseers.
Strong team identity can lead to conflict; the remedy is to increase contact between different teams, for example by regular member rotation, and working together on joint issues. This discourages individuals from identifying with a specific team, builds a wider network of friendships and relationships, and creates more opportunities for information and skill sharing.
Elon Musk, boss of Tesla, argues that “Managers should work hard to ensure that they are not creating silos within the company that create an us vs. them mentality or impede communication in any way”.
The stereotypical crisis leader is assertive, charismatic, confident, decisive, and fast acting. These attributes can be useful. But assertive leaders have been known to cause disasters because subordinates were afraid to challenge them when they saw that things were going wrong.
In a crisis, a combination of leadership configurations may be necessary, adapting as the crisis unfolds. A sole director at some points, leadership taken by those with expertise when required, self-organising teams in other situations. Research tells us that leadership effectiveness is highly contingent: leadership approach and configuration have to flex to fit the circumstances.
In most crises, it will be appropriate to give decision rights to those who are closest to the action and to emerging problems. And if they do not have the required knowledge and understanding? That’s a management failure.
What does this mean for HR and L&D?
HR and L&D can make critical contributions to crisis-readiness (see table). In a world of rapidly evolving technology, and unknown risks, constant reskilling and upskilling are essential, rather than ‘nice to have’. Crisis-readiness can also be affected by recognition and compensation policies. The coronavirus pandemic revealed how dependent many organisations are on low-skill, low pay staff.
Have you considered basing compensation on how central employees are to business continuity and key performance outcomes, regardless of skill level? Retention and motivation may rely on this shift in compensation strategy.
HR and L&D priorities for crisis-readiness
Trigger discussion of organisation development strategy to modify the structure; conduct supply chain management training; network with contacts in potential partner organisations
Help the organisation to develop a communication strategy; extend training in communication skills; develop policy on the use of social media at work
Establish diversity and inclusivity in recruitment and selection policy and practice; develop reskilling, upskilling and mentoring plans; reconsider compensation and recognition policies
Develop teamworking skills; introduce coaching skills for displaced leaders; staff rotation plans
Open up leadership development to everyone if that is not already happening; extend decision-making skills training
Implementing these features enhances responsiveness to prevailing conditions – which are already volatile, uncertain, complex, and ambiguous – and helps to future-proof the organisation for the inevitable next shock.
Emphasis on these priorities incurs little or no additional cost: in the face of an unknown and unpredictable future, here is an approach that does not carry a big price tag but makes a substantial investment to the future.
About the authors
David Buchanan is emeritus professor of organizational behaviour at Cranfield University. He can be contacted at firstname.lastname@example.org. Steve Macaulay is an associate at Cranfield University’s centre for executive development; he can be contacted by email on: email@example.com