How can managers prepare for and respond to crises?

"Crises, both internal and external, can hit even the best-managed organization. Sometimes organizations can anticipate crises, in which case managers develop contingency plans, and sometimes they can’t. Take, for example, the sudden death of McDonald’s CEO Jim Cantalupo. The company had a solid succession plan in place and immediately named Charlie Bell as new CEO. Only a few months later, Bell announced that he had terminal cancer. Even though the company had prepared for the event of its leader’s untimely death, surely it couldn’t have anticipated that his successor would also be stricken by a terminal illness at almost the same time. Likewise, consider the devastation caused by Hurricanes Harvey, Irma, Maria, and Nate in 2017. Part of Marriott Hotels’ crisis management plan included relaxing its “no pets” policy and allowing patrons fleeing the storm to check in with their pets because it was the right thing to do. Crises cannot be fully anticipated, but managers can develop contingency plans to help navigate through the aftermath of a disaster. For example, consider the challenges that faced Rajiv Joseph, the author of several plays including Bengal Tiger at the Baghdad Zoo, who was in Houston preparing to open his new play, Describe the Night, at the Alley Theater when Hurricane Harvey hit and flooded the theater a few weeks prior to opening night. The six New York–based actors, the director, the stage manager, and Joseph decided to help in the relief efforts and made their way to the George Brown Convention Center, which had become the central location for relief efforts. When they arrived and the staffers discovered they were theater artists, they were deployed to handle the writing and deployment of public address announcements and manage the incoming crowds. What made the relief efforts successful was planning—matching the skill sets of volunteers with tasks they are best able to perform. Even though those in charge of the relief efforts had contingency plans, they still needed to make dozens of nonprogrammed decisions to effectively manage the ever-changing situation. No manager or executive can be completely prepared for these types of unexpected crises. However, how a manager handles the situation could mean the difference between disaster, survival, and even financial gain. No matter the crisis, there are some basic guidelines managers should follow to minimize negative outcomes. Managers should not become immobilized by the problem or ignore it. Managers should face the problem head on. Managers should always tell the truth about the situation and then put the best people on the job to correct the problem. Managers should ask for help if they need it, and finally, managers must learn from the experience to avoid the same problem in the future. Leaders have also learned to take practical steps when managing crises. Howard Schultz of Starbucks emphasized learning from one crisis at a time and invested in a notification system that could handle text messaging. Gary Loveman of Harrah’s made life easier for employees by guaranteeing pay for at least 90 days in the event of a total entertainment disaster. J. W. Marriott emphasized communicating for safety by moving Marriott’s email system out of New Orleans before Hurricane Katrina and using a publicity campaign to locate employees. Geno Auriemma of the University of Connecticut emphasized doing things so they could not be done any better. Danny Gavin of Brian Gavin Diamonds focused on creating an unforgettable customer experience, even driving packages to an open FedEx store during Hurricane Harvey. Bob Nardelli of Home Depot emphasized preparing for the next big crisis by conducting postmortems, prestaging supplies and generators, and sending relief associates to affected stores. Scott Ford of Alltel emphasized taking care of everybody, including using the company’s network infrastructure to help locate a missing employee. Paul Pressler of Gap emphasized empowering the workforce, including using direct deposit to help employees access their pay. Jim Skinner of McDonald’s emphasized flexibility with company assets by converting a human resource service center into a crisis command center. Robert Baugh of Chiles Restaurants communicated with staff before Hurricane Irma, assigned team leaders to communicate with their members, reduced food orders, and prepared restaurants for closure and reopening."