Monday, October 03, 2005

4qtr2005 - Book Review - Crisis Management

Title: Crisis Management: Planning for the Inevitable
Author: Steven Fink

Sometimes the best books are the ones you've already read. Re-reading them gives you another chance to see what you missed the first time through, confirm what you know, and further deepen your learning on a particular topic.

So, given the impact Hurricanes Katrina and Rita, I thought it a good time to review a book about dealing with crises.

According to Fink, there are four distinct stages to a crisis:

typical crisis flow

Stage 1 - The Prodromal Stage - This is the "early warning" period. Sometimes referred to as the "pre-crisis" stage, it's when you get first glimpse of the potential of the crisis-to-come. The reasons why the Prodromal Stage is so important is that it's just so much easier to manage a crisis before it begins.

Stage 2 - The Acute Crisis Stage - This is the crisis per se. It begins once the damage has begun. How long it continues is a matter of how much additional damage occurs. The key, of course, is to minimize the amount of that subsequent damage, although that's not always possible.

Stage 3 - The Chronic Stage - Some call this the "post-mortem" phase. The damage has subsided, clean-up has begun, and now it's time to investigate what happened and what did not. It's a period of analysis, mea culpas, Lessons Learned, and recovery, and can sometimes last an extraordinary amount of time.

Stage 4 - The Crisis Resolution Stage - This is when things finally return back to normal (whatever that means!) or in Fink's words, "when the patient is well and whole again."

Fink goes on to explain that as bad as the physical damage of a crisis can get, the emotional damage is often more troubling. Emotionally-speaking, here's what we'd rather see than the 4-stage model:

ideal crisis flow

But when it doesn't happen that way - and it rarely does - we can quickly find ourselves spiraling on an emotional roller coaster that looks more like this:

emotional crisis flow

One of the recurring themes of the book is that crises, as bad as they can be, provide us with important opportunities to show how well we can handle the "decisive moments" inherent in them. In fact, once the chronic stage starts, the spotlight increasingly focuses on how well we do that ... or not. Former FEMA director, Michael Brown, experienced this phenomenon first-hand. So did former NYC mayor Rudy Guliani a few years ago, though, so you see it really does cut both ways.

Another of the author's keen insights is what he labels the crisis impact value (CIV). The questions to ask in assessing the CIV are as follows:

  1. Is there a good chance that this situation will, if left unattended, escalate in intensity?
  2. Might this situation foster unwanted attention by outsiders?
  3. Is it likely that the situation might interfere with normal business operations in some manner?
  4. Could it make you look bad or cause some people to lose confidence?
  5. How is it going to affect your bottom line?
Simply stated, the more objectively - and accurately - you can answer these questions, the better you will be able to manage the crisis around you.

There's more good stuff in this book, including detailed reviews of what happened at Three-Mile Island, with the Tylenol tampering situation, during the Savings & Loan crisis, and around Union Carbide's Bhopal debacle. Clearly, if the book were to be updated today, it'd have much to say about our recent hurricanes, and probably something about the earthquake in Pakistan, too.


If you've read this book and would like to share your thoughts on it - or have a book recommendation that you'd like to make - please post your comments. To that end, a great article on crisis management is "Managing the Crisis You Tried to Prevent," by Norman R. Augustine, HBR, November 1995.

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Anonymous beezee said...

Thanks to Don Serpico, a former boss of mine, for recommending I read this book way back when in the early 90s.It was helpful then and again now.

Friday, October 07, 2005 11:14:00 AM  
Blogger peeP said...

thnx to the publisher for having helped my project i.e. to submit a business model to manage crisis..this book review is very useful :)

Wednesday, November 19, 2008 7:48:00 AM  

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