Winning - Jack Welch [51]
Second, assume there are no secrets in the world and that everyone will eventually find out everything. One of the most common tendencies inside the crisis vortex is containment, in which managers frantically try to clamp down on information flow. It’s far better to get out ahead of the problem, exposing its scope before someone else does it for you.
Third, assume you and your organization’s handling of the crisis will be portrayed in the worst possible light. It is not the job of the media to make you or your organization look good during a crisis, and they won’t. And never mind the media. Your own organization can be a tough audience during times of trouble. In both cases, the implication is the same: define your own position early and often.
Fourth, assume there will be changes in processes and people. Almost no crisis ends without blood on the floor. Real crises don’t just fade away. They require solutions that overhaul current processes or introduce new ones and, just as often, upend lives and careers.
Fifth, assume your organization will survive, ultimately stronger for what happened. We learned something from every single crisis that made us a smarter and more effective organization. Taking the long view might make living in the hellish moment somewhat more bearable.
SEEKING IMMUNITY
Last year in Amsterdam, we met a Dutch journalist who had recently recovered from an illness that had robbed her of her memory for two years. She recounted to us the worst aspect of amnesia for her, which she described as her lack of immunity in life. Every time she made a mistake, like touching a hot stove or not bringing an umbrella out in a rainstorm, it was as if it were for the first time. She never learned anything from experience.
At the time we met, the journalist was covering the crisis unfolding at the Dutch food retailer Ahold, which had been accused of serious accounting fraud. In our conversation, she wondered what would become of the company if its troubles passed. Having touched the stove once, would it do so again, or would its financial accounting be more tightly controlled than ever before?
I volunteered that Ahold might make other mistakes in the future, but it was highly unlikely to make a similar accounting error for a long, long time.
Companies typically go to extremes after a crisis. They throw up fortresses of rules and procedures to fight the enemy that got in once. Or to use the Dutch journalist’s metaphor, they build a kind of immunity to the sickness that felled them—the way a child cannot get chicken pox twice.
So, there is a sliver of silver lining to crisis management in that you rarely have to live through the same disaster twice.
That said, you can be proactive in preventing some crises.
There are three main ways, and most companies have the first two pretty much nailed.
The first is tight controls—disciplined financial and accounting systems with tough internal and external auditing processes. An organization’s line managers should be required to review and act on every audit’s findings.*
The second way to try to prevent crises is with good internal processes, such as rigorous hiring procedures, candid performance reviews, and comprehensive training programs that make the company’s policies nothing short of crystal clear. When it comes to acceptable behaviors, rules, and regulations, you simply cannot train too much.
The third way is less common and certainly less of a layup—a culture of integrity, meaning a culture of honesty, transparency, fairness, and strict adherence to rules and regulations. In such cultures, there can be no head fakes or winks. People who break the rules do not leave the company for “personal reasons” or to “spend more time with their families.” They are hanged—publicly—and the reasons are made painfully clear to everyone.
Perhaps the lawyers will warn you against saying too much. But if you’ve got the facts right, you should be comfortable laying out who broke the rules and how. There are enormous organizational benefits from making examples of people