Anticipate, Prepare and Adapt to Crises

Welcome to the latest in a series of brief interviews with guest experts from KnowledgeBrief’s Innovation Programmes, providing a window into the experts’ latest ideas and new advice for executives.

Following the Innovation Day in April, Jeanne Meinholt, Senior Researcher at KnowledgeBrief (KB), interviewed Dr. Rachel Doern (RD), Goldsmiths University of London, to discuss how leaders can benefit from adopting a resilient mindset and some of the strategies they can use to make their organisation crisis prepared.

KB: What’s the key business challenge that organisations need to address, that your research tackles?

RD: My research investigates how individuals and organisations adapt to a crisis. In my experience, the key challenges for most businesses, particularly small businesses, seems to include:

1. devoting sufficient time and energy towards anticipating and preparing for crises,
2. responding to crises swiftly and proactively, and
3. reflecting on what worked, what did not, and how mindsets, systems or processes should change in order to enhance survival.

KB: What advice would you give to executives, based on your findings?

RD: Don’t wait; be active; continually invest in new resources; seize the opportunity to learn from the crisis and change; consider the potentially negative effects of a crisis for you and your team:

• Don’t wait. You are not immune to a crisis. Do what you can now to anticipate major crises or minor setbacks and identify the ways in which you might be susceptible to the risks involved. Think about where you may be lacking resources, strengths or certain assets. Meet with your team periodically to discuss these gaps, possible responses to a crisis, how they might be executed and who is responsible. My research on the London riots found that many business owners did not believe their businesses would ever encounter the kind of devastation that the riots ultimately inflicted. Those who experienced a major setback prior were more likely to take precautionary steps and to recover more quickly.
• Be active. Resilience is about positive adaptation which involves looking at what has happened in a constructive fashion and actively drawing on the support available or seeking out support. Think about who can help in a time of crisis. Friends, family members, stakeholders, the business community, the council, and/or regulators may all have something to offer. Responding to a crisis with strategies of avoidance, denial, isolation and passivity might help conserve energy in the short term, but can ultimately increase vulnerability, creating distress and future losses. My findings show that owner-managers who pursued the latter strategies became more disengaged from their businesses over time.
• Continually invest in new resources. Research suggests that an abundance of resources serves to buffer against losses incurred in a crisis, minimising psychological distress and other negative effects. My study found that an abundance of resources in one area, like strong social ties to the community or inner strength and determination, can substitute for weaknesses in other areas, like funding. With more resources, organisations can also be more flexible and draw from a wider range of responses. 
• Seize the opportunity to learn from the crisis and change. Following a crisis or setback, think about what factors facilitated recovery and what factors inhibited it, and take the time to feedback this learning in to your crisis planning. Also embrace the opportunity to change and develop new processes or skills. In the latter case, my findings suggest that owner-managers who adapted well to the riots were those who developed a greater tolerance for ambiguity and new outward facing skills.
 
• Consider the potentially negative effects of a crisis for you and your team. Understand that the emotional and psychological costs of a crisis can be significant and, unless acknowledged and addressed, can lead to absenteeism or negative coping behaviours. Think about what you can do to minimise these kinds of costs to the organisation. Listen to people and provide one-to-one and/or peer support. Several of the business owners I spoke to said that the London riots were the worst thing to have ever happened to them. Some experienced sleeplessness, illness and depression. A couple of people discussed the potential benefits of counselling, and most highlighted the significant role that pro-social behaviours exhibited by community members played in their recovery. Feeling grateful that they were safe and focusing on what was saved rather than what was lost, also served to diminished negative emotions.

KB: How does your latest research approach this? What do the results indicate?

RD: The results of my study indicate that the nature and pace of recovery following a crisis, that is whether or not a business returns to normal or with gains/losses and how quickly it does so, depends on a number of factors:

1. Pre-crisis planning measures
2. The presence of certain protective factors and whether or not these resources, strengths and/or assets are drawn upon
3. Whether adaptation strategies pursued are positive or negative
4. The extent of the damages

KB: What did you learn or take away from meeting with the executives in the KnowledgeBrief Innovation Programmes?

RD: It was a lovely day and I took away from the meeting with executives that the principles of crisis management were very much on people’s minds. Many people I spoke to had undergone some kind of organizational crisis in the past or were in the midst of such, and were applying risk management strategies in order to avert them in the future.

During the session, there was an interesting discussion about where executives’ organisations were strong or weak, either in terms of 1) crisis anticipation, detection and planning, or 2) crisis containment and response. Executives were also thinking about important issues like how to create a no-blame culture. Prior research suggests that such a culture exists where organisations encourage people to report mistakes or potential problems. Such activities, if undertaken systematically, may reveal potential weaknesses in systems and processes rather than in individuals. A no-blame culture is also likely to thrive where knowledge sharing and open communications are fostered. Where people can both raise concerns and make suggestions in an informed manner.

With thanks to Dr. Rachel Doern, Goldsmiths University of London.

Next month, KnowledgeBrief will be talking to Dr. Sara Jones, Cass Business School, to explore new and emerging technologies that support creative processes. Find out more here.