Why the 20th century crisis management approach is failing organisations and what supporting techniques are required
The recent pre-Christmas crisis with drones flying over Gatwick airport, should be rather embarrassing for the airport authorities. Drones have been a plausible threat for many years.
The Telegraph newspaper reported on the 19th March 2018 that drone near-misses had more than tripled in two years, with 92 being reported alone in 2017. Potentially more damaging than bird-strikes. Drones have represented a real hazard for over five years. Surprisingly, Gatwick, and presumably other airports, have little, if any capabilities to neutralise or reduce the risk exposure to a clearly growing problem.
A briefing paper from the House of Commons, entitled, “Civilian Drones” was published in August 2017 and clearly highlights many of the issues that could affect airports. The briefing paper refers to “geo-fencing” and other methods to control drones, but interestingly if does not really confront the issue of individuals who deliberately disrupt day-to-day operations, by illegally and mischievously flying their drones over restricted airspace.
Laws will not stop certain types of individuals (or terrorists) from disrupting essential services, or causing a fatal collision. Whatever their motives, I am rather surprised the authorities did not seem to have a quick and coherent plan of countering the threat.
To some degree, the painfully disruptive events at Gatwick, demonstrate the problem with outdated crisis management thinking – it is mired in the notion that hindsight helps inform us about foresight.
Other factors which influence failure to anticipate disruptive events:
- Complexity and coupling
- Interdependence and connectivity
- Executive short-term focus
- The demand for transparency
- Putting profits before good governance
- Fear of becoming non-competitive
- Risk denial
- Lack of an intelligence system for identifying and monitoring risk issues
- Lack of a proper risk and issue committee and updated risk register
- Anchoring and framing risks from only past events
The truth is that that crisis management thinking is not aligned with current issues, such as complexity, interdependence, speed of and confluence of events, the rapid emergence of new risks and an increasingly sophisticated criminal/social mind-set. This means that a static crisis plan seems rather weak.
The traditional approach to risk:
- Preparedness– pre-crisis plan
- Acute phase- when the crisis manifests, assembly the crisis management team and take decisions
- Crisis communicationsand stakeholder engagement
- Recovery– back to status quo
- Consequence and learning
There is nothing inherently wrong in any of the above. I am not suggesting these approaches are wrong, BUT they become less effective every year. The environment is becoming more stochastic and uncertainty increases.
Academics refer to the modern world through various acronyms - VUCA (volatile, uncertain, complex, and ambiguity) or TUNA (turbulence, uncertainty, novelty and ambiguity), which reflect the fact that you can no longer easily predict and control events as one could before.
You cannot predict uncertainty, but you can prepare for it. Organisational resiliencenecessitates that organisations adapt to sudden or incremental change, so that they assimilate new learning, thereby making them more likely to succeed.
Resilience can be defensive (ensuring that bad things do not hopefully happen) or adaptive progressive (ensuring positive outcomes occur). But organisational resilience requires anticipation and preparation for events, which in turn requires an adequaterisk capability, informed throughvulnerabilityand threat analysisof existing, but more importantly, of plausible future risks issues that may manifest.
It is important that crisis managers and those given the responsibility to protect the organisation think carefully and use their imagination to look at new emergent risks and confluence of risks.
At LSPR, we have been training people, that in addition to the traditional crisis management approach, organisations must become skilled invulnerability analysis, strategic anticipation and Red Teaming. In addition, to training in conventional crisis management, we emphasise the importance ofalternative, supporting approachesthat can anticipate scenarios, or specific events which may cause significant disruption.
By simply being aware of the potential for disruption a future event(s) may cause, organisations can start to think how to build resilience against such possible eventualities. We are not suggesting that crisis management is dead, because it is not. As a sole approach, it has it’s limitations in the current and future environment.
Companies want to becomeHigh Reliability Organisation (HROs), which have a pre-occupation with the prevention of failure through a detailed commitment to resilience. A typical HRO has the ability to detect signals that may infer something is wrong and are more able to contain an unexpected event or disruption. The ideological alternative,Normal Accident Theory (NAT), states that complex organisations will inevitably have accidents. An HRO is characterised by its capacity to be highly sensitive to potential threats and to maintain and execute error-free operations.
Irrespective of the ideological battle between Normal Accident Theory and High Reliability Theory, what additional, yet complementary approaches to traditional crisis management can be adopted?
They mostly fall under the term strategic anticipation or futures techniques:
- Strategic issues management
- Scenario planning
- Horizon scanning
- Alternative analysis
Strategic issue managementis the easiest to explain and most organisations conduct some level of issue analysis. LSPR’s experience over the last 20 years of teaching and consulting is that organisations have significantly underdeveloped capabilities for issue management, which can lead them very quickly into a crisis situation.
Issues management typically involves the following steps:
- Environmental scanning
- Issue identification
- Issue monitoring
- Issue analysis
- Strategic options and responses/framing
Scenario planning is a strategic foresight that provides a structured way to helpenvision plausible futures. It is a technique/methodology of strategic planning that helps organisations better manage the uncertainties of the future by framing and reframing strategic possibilities. Large transnational corporations often engage in some form of scenario planning, but amongst SMEs, scenario planning is known, but rarely used.
As a methodology, scenario planning involves three fundamental elements:
- Visualising and developing a number of plausible/probable futures
- Trying to comprehend their likely impact and consequences
- How one should respond to protect or benefit from the various scenarios
A good set of scenarios will typically contain two to five narratives. Scenarios provide useful strategic insights about the future and help improve decision making.
Horizon scanning focuses on the assessment and monitoring of current developments and their implication for the future. By contrast, scenario planning takes a broader approach that examines how plausible narratives might play out. Leading to a future that might be significantly different from today. In essence, horizon scanning is more about emerging trends, examination of existing risk and uncertainties. Horizon scanning is a foresight technique that helps executives to better interpret weak signals as, forms of early warning signals, so that the organisation can make sense of changes and have a high sense of awareness and a capability to respond in good time.
Unlike horizon scanning, which focuses on emerging and current development, scenario planning has a free range to consider how driving forces may shape future possibilities.
THE KEY STAGES OF SCENARIO PLANNING
- Identification of the scenario field
- Domain and sub-domain definition
- Define the problem and scope
- Set timeframe
- Identify principal issues –assessment of current conditions
- Identify main driving forces (Steep) and uncertainties
- Establish priorities from above
Development of scenario
- Derive themes
- Outline scenario logics: deductive; inductive; normative; incremental; alternative
- Describe baseline future: develop and build scenario narratives
- Apply scenarios : evaluate and understand implications
- Develop future-proof strategies: bench mark firms strategy against scenarios
- Revise narratives
Alternative Analysis: Red Teaming
Defined loosely, red teaming is the practice of viewing a problem from an adversary or competitor’s perspective; in effect you assume an adversarial point of view and are allowed to think the unthinkable! If you are a crisis manager for an airport, instead of following the conventional approach to risk and crisis management, Red Teaming would require you to think in terms of how, as a disgruntled employee or worse, a determined terrorists, might want to disrupt or cause chaos.
There are many methods of employing Red Teaming, such as:
- Being your own worst enemy
- Four ways of seeing
- Alternative hypothesis
- Pre-mortem analysis
- What-if analysis
The goal of most red teams, is to enhance decision making, either by specifying the adversary’s preferences and strategies or by simply acting as a devil’s advocate. Red teaming may be more or less structured, and a wide range of approaches exists. In the past several years, red teaming has been applied increasingly to corporations. Business strategists, for example, can benefit from weighing possible courses of action from a competitor’s point of view. It is also now commonly applied to risk assessment situation, crisis and consequence management. Red Teaming is part of what is commonly called Alternative analysis.
The main point from all of the aforementioned is simple: organisations can no longer rely on traditional approaches to crisis management. They should supplement strategic thinking through techniques, such as issue analysis, scenario planning and Red Teaming techniques. Such an approach enhances organisations’ abilities to plausibly anticipate what might emerge in the near future, that could disrupt normal operations. Many complex organisations strive towards becoming High Reliability Organisations, but the truth is that the genesis of reputational challenges is formed in poor governance and management decisions/oversight. Hindsight no longer informs foresight and extrapolation of past events is not adequate to protect against threats. Imagination must be factored in.
- John Dalton, Director of LSPR, January 10th 2019