happen? T e answer lies with the costs involved, and with the ‘collateral ben- efi ts’ which that investment will bring to the business. So, what is involved?
Crisis-proof your business
One approach to crisis-proofi ng lies with the concept of the high reliability organisation (HRO). T is idea was born on the deck of a nuclear-powered aircraft carrier, and may not appear to be relevant to most ‘normal’ organisa- tions. T e concept is widely misunder- stood. T is is not a context in which mistakes and accidents never happen. On the contrary, one of the key features of an HRO is preoccupation with failure: we know things can go wrong so we are constantly on the lookout. We studied a serious incident in a hospital operating theatre where one of the contributory causes was that things were going well, and the team dropped their guard, allowing a potentially disastrous mistake to occur (fortunately no harm was done on this occasion). In other words, in an HRO, errors are expected. So, when things do go wrong, the response is rapid, the damage is minimised, and the lessons are applied rapidly to prevent a recurrence. Another HRO feature is deference to
expertise, which means giving decision rights to those closest to the action regardless of their seniority. What happens when the organisation does not defer to ‘on the spot’ expertise? T e disaster movie Deepwater Horizon tells the story of the BP oil exploration platform in the Gulf of Mexico in 2010, when a blowout and fi re killed 11 crew. In one scene, a junior control room operator decides to seal the oil well which is fuelling the fi re. But her colleague prevents her from doing this because “We don’t have the authority”. T is also happened during the Piper
Alpha disaster in the North Sea in 1988, where the fi re would have burned out if it were not being fed by oil from two neighbouring platforms – which continued pumping because their staff did not have company permission to shut down; 167 died in that incident.
Another approach to crisis-proofi ng is the ‘built-to-change’ organisation. With a premium on stability and predictability, which are desirable
8 | July 2017 |
properties, most organi- sations are ‘built-to-last’. But this means a loss of fl exibility, which is not helpful when an organisation may have to respond rapidly to unpredictable events which could jeopardise reputation, performance and even corporate survival. T e contrast between these two forms of organisation is shown in our table. T e last thing you want in a crisis is a member of staff at the centre of the action saying, “T at’s not my job”, “T at’s above my pay grade”, “I need to wait for directions”. Organisation culture and hierarchy can also prevent the early signs of a looming crisis from being communicated. For example, radio messages concerning ice warnings were not all passed to the offi cers and captain of the Titanic, which sank after hitting an iceberg in the Atlantic in 1912. T ose kinds of attitudes and behaviours can be changed by the ways in which work is designed and rewarded, and by subtle shifts in selection criteria.
Detailed individual job descriptions.
Hire people with capabilities related to the job for which they have applied.
Pay for the job and what it involves.
market research departments, leaving most staff with an internal focus.
Senior leaders set direction, give orders.
Leadership develop- ment for the ‘stars’.
Individual and team goals.
Hire quick learners with initiative who like change and development.
Pay for the person and what they contribute.
Maximum ‘surface area’ of staff in touch with customers, who therefore have an external focus.
Process-based, x-functional network structures.
Shared leadership at all organisational levels.
Leadership develop- ment for most staff.
A crisis gives you a free audit
Despite the damage, crises can be valuable because they provide a free audit of an organisation’s systems and procedures. In one case that we studied, involving the accidental death of a hospital patient, the incident inquiry led to almost 50 recommendations, most of which concerned changes to clinical policies, information systems and patient management procedures, while others related to communi- cations, roles and responsibilities. T is was a comprehensive audit.
Most accidents and failures are due to systems errors and have many contributing factors. Human error and deliberate sabotage are rare – although we often want to fi nd somebody to name, blame and shame. T e point is, it can be more diffi cult to implement the lessons from crises in a built-to-last organisation. T e built- to-change organisation is more likely to absorb the wider system changes that crises often expose as necessary. One way to improve an organi-
sation’s crisis-readiness thus involves implementing a combination of high reliability and built-to-change properties. Now let’s return to the question of board sign-off . What are the benefi ts, and what will this cost?
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