Tuesday, August 02, 2005

Why Some Companies Emerge Stronger and Better from a Crisis

Why Some Companies Emerge Stronger and Better from a Crisis
The premise for Ian I. Mitroff's Why Some Companies Emerge Stronger and Better from a Crisis is a simple, yet difficult one to swallow: that we now live in a crisis-plagued society -- a place where we no longer have to cope with just natural disasters and normal accidents, but abnormal accidents that are potentially very devastating. Natural disasters are one thing. We've learned how to mitigate risks from natural disasters. Not locating in high risk regions, to enacting some control over the environment where we do locate, lowers risk. We've managed to even take some control over normal accidents, although, as the complexity and interrelatedness of processes grow, normal accidents in one area could have ripple effects across the entire system -- across industries -- across geography. Still, risks from normal accidents can be mitigated, as we can quantify the probability of an accident happening to a given aspect of a system. Where we face a steep challenge, is in the area of abnormal accidents -- defined by Mitroff as accidents that are intentional, deliberate acts of evil. Everything from terrorism, computer attacks, to employees taking advantage of the company for personal gain. Mitroff suggests that in the past decade or so, abnormal accidents have risen to be on par with normal accidents, yet most businesses -- most people -- take little to no preventative measures to lower their exposure.

Mitroff has a plan for businesses to manage crises. He starts out with seven essential lessons that businesses must foster and practice to be adept in crisis management:
  • Emotional IQ

  • Creative IQ

  • Spiritual IQ

  • Technical IQ

  • Integrative IQ

  • World View

  • Political and Social Skills

  • Mitroff's plan also requires the right sort of thinking. He suggests that we should think about the "unthinkables." Things that we would never expect to happen. He suggests that executives should practice role playing when thinking about the "unthinkables" to free themselves from a moral and ethical frame of mind. Executives should walk around their businesses during work hours and off, and try to conceive of ways to disrupt their business. Executives should think like someone determined to wreck havoc and willing to die doing so -- where would be the best place to strike, to hide. It's scary when you really start thinking like that -- you realize how exposed your business, your communities, and your life really is. To aid in thinking about the "unthinkables," Mitroff provides four different types of thinking modes that were developed by William James to ascertain pragmatism.
    GroundedIn the Clouds

    The thinking modes are there to help come to grips with a fuzzy, complex and uncertain world. The tough-minded and grounded thinking looks at data, facts and logic. The tough-minded and in the clouds thinking looks at open-ended issues and ambiguity. The tender-minded and ground thinking is for uniqueness and individualism -- and lastly, the tender-minded and in the clouds thinking is oriented for the group, community and humankind. Mitroff points out that each view provided by the different types of thinking, provides tunnel vision. To get the complete picture, each type of thinking must be employed.

    Finally, to get people thinking a little about the worst that could happen, Mitroff preaches that a little controlled paranoia wouldn't hurt anyone. crises don't happen to just other people. They could happen to us as well. With a little paranoia in mind, he outlines seven major types of crisis we could face, as individuals, companies, industries, neighbourhoods and countries.
  • Economic

  • Informational

  • Physical

  • Human Resources

  • Reputational

  • Psychopathic Acts

  • Natural Disasters


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