Aug 01, 2017

Five thoughts on catastrophic uncertainty by Mark Humphreys

Posted by Brendan Torazzi

Five thoughts on catastrophic uncertainty by Mark Humphreys

In a previous role in the UK, I worked with an insurance company and was assigned to a client that processed poultry. They were a global player with factories in multiple jurisdictions, and lots of supply chain risk exposure.

I distinctly remember the day I asked them about their approach to crisis management, and their representative (a senior executive) pointed towards the cones and first aid kit in the back of the Range Rover.  Admittedly, his response was not simply restricted to the UK, as he was ready to fly to any location around the world that suffered a serious incident.  While the passion and energy were admirable, it showed a distinct lack of strategic perspective on how to respond to high consequence/low likelihood risks.

Here are some practical reminders of what to do now to help address a lack of understanding in this space.

Ensure everyone understands the potential threats to the organisation, and a culture is developed that is interested in responding to those threats

I still meet individuals who tell me they have no lessons to learn from the Target cyber-hack, the Volkswagen emissions scandal or the Dreamworld amusement park accident.  Their responses are typically based on the premise — ‘our business is not retail/automotive/amusement-related’.  Whole sectors seem to have become blinkered, and draw their case studies only from their own sector.  In contrast, I’ve previously worked for a great senior manager who would phone me on his way to work and ask how confident I was we could respond to the given situation he had just heard on the car radio.  Culturally, this was fantastic.  It challenged me to think on my feet, consider how agile our documented responses truly were and then have some ‘borrowed legitimacy’ to challenge other managers based on having been quizzed by the senior manager.  When you’re next asked about the leaders of organisations ‘walking the talk’, challenge them on how they individually keep ‘crisis management’ on the agenda and see if they can similarly shake your organisation from slumber.

Ensure everyone understands the language as it is used in the organisation, and the interfaces between all the moving parts

Many people use the terms emergency response, incident response, contingency planning, crisis management, business continuity and disaster recovery interchangeably.  These represent very different lenses through which to view a disruption (for example, you wouldn’t manage an organisational crisis with fire wardens and an evacuation process) so make sure everyone is clear on these terms — and on board with the roles, responsibilities, notification, escalation and required response which comes with each.

Undertake an exercise now

Yes, I know — it sounds trite.  However, we once facilitated a crisis management exercise in which there was almost a stand-up fist fight between a CEO and CFO in relation to the use of social media (that is, one said it was needed to get the message across proactively, and the other said it would be used over his dead body).  The exercise was successful at illustrating the differing perspectives, and the need to have a pre-agreed protocol in place, but it also demonstrated the need for everyone to have a good handle on what ‘communication’ meant for the organisation in a disruption.  I felt the ensuing conversation about the need for frequent, consistent and exact information to be provided went a long way to improving the day-to-day stakeholder engagement the organisation was having.  Everyone learns something from an exercise.

Surround yourself with ‘good’ people

This is borrowed from Peter Canterbury, but I share an identical perspective. Having support from a small team of people who ‘have your back’, organisationally and individually, as well as the requisite competency, capability and integrity is paramount.  You don’t need to wait for a disruptive event to establish who they are, and to include them in your response.

Be authentic in your response

Be Yourself’ is about the worst advice you can give some people’ is a great quote from Thomas Lansing Masson that I have on my study wall at home.  It makes me smile when I believe I’ve been unjustly on the receiving end of unreasonable behaviour (even from my own family!).  Organisations spend enormous amounts of direct and indirect resources concentrating on articulating their vision, mission and values.  Rather than offering simple platitudes and reassurance in difficult times, organisations should see their response as the opportunity to showcase the process, framework and principles, which underpin their crisis management response.  

This blog first appeared on the Governance Institute in July 2017. Mark Humphreys is a partner at Riskwest.

www.governanceinstitute.com.au


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