Tesco Bank, Nissan and Samsung have all been in full crisis mode at some stage over the last few months. Cyber-attacks, dodgy exhausts and exploding batteries have forced senior executives to firefight to protect company reputations. Time will tell whether their attempts to contain the crises and avert long-term damage have been effective.
One aspect that deserves a closer look is the decision-making process taken by people tasked with managing difficult issues and crises. How do we react under pressure and what can we do to improve our judgements and decisions?
Research shows that, in the face of a crisis, our mental state tends to move from one of relatively restful contemplation towards increased anxiety, worry and anger. Anger is particularly acute if there’s a feeling that the crisis has been caused by ‘someone else’ – be that a wayward employee, sub-contractor or partner. The fatigue that inevitably comes with a period of prolonged crisis only heightens the level of emotion.
Why does this matter? Because a change in our emotional state is likely to affect the way we make judgements and reduce the effectiveness of decisions. There are at least four important issues to consider:
1. Worrying reduces thinking power. Worrying uses up valuable mental resources resulting in less thinking capacity to solve a crisis. Just as our computers slow down when we have lots of applications open at the same time, our processing power is also reduced when we are distracted by the anxiety caused by potential hits to personal reputation, share price or product sales.
2. Crisis situations encourage ‘narrow’ thinking. On some occasions, concentrating on priority information can provide a necessary and helpful focus. Too often, however, it can lead to myopic thinking which may miss the bigger picture. This bigger picture is often crucial to managing the crisis effectively.
3. Time pressure can lead to confirmation bias and groupthink. Even when professionals do try and consider the bigger picture, there is a tendency just to select the facts and information that support or confirm initial interpretations and conclusions.
4. Negative emotions often drive us towards premature closure. Crisis decision-making is stressful and uncomfortable. One means to overcome the emotion is to drive towards quick decisions. The first reasonable option is selected, with little or no thought given to the optimum approach. This approach manages the negative emotion at the cost of taking effective decisions.
Helpfully, there are ways to mitigate these potential errors and biases and improve crisis decision-making:
1. Don’t hide away. Fight the tendency to hunker down and maintain your usual social networks and connections. Social support reduces stress, keeps issues in context and improves the thinking process. While tempting, the hunker down approach often leads to narrow thinking.
2. Set clear goals at the outset of the crisis. It’s important to be realistic about what can be achieved and not be overly ambitious. The process of setting goals also helps the crisis team stick to objectives and prioritise the right issues.
3. See crises as an opportunity to learn from adversity. This more positive ‘frame’ of a crisis can reduce anxiety and stress, build resilience and lead to significant improvements in the future. Run a full debrief once the crisis has been averted.
4. Put things in perspective. Think carefully about whether you need to apply a sticking plaster or carry out a full-blown crisis operation. There is a difference between a relatively isolated crisis and an incident that’s reflective of a much bigger problem.
5. Accept that some circumstances are outside of your control. There will be some aspects of a crisis that cannot be changed, regardless of what you’d like to happen. Move on to other things that you can exert some influence over.
6. Train crisis executives and run regular planning exercises. By identifying and practicing reactions to different scenarios, we can help to remove some of the negative emotions naturally associated with live crises.
Due to their scale and nature, large supermarkets, car manufacturers and tech giants are more likely to face regular crises than, say, financial and professional services firms. But all organisations are likely to face a crisis at some point.
Unless we hand executive power to robots and artificial intelligence, it’s all but impossible to take emotion fully out of crisis decision-making – and even then, there could be a backlash against ‘cold’, heartless judgements.
However, by recognising the effects of emotion we can introduce measures to address the likely flaws in our decision-making process. By understanding the psychology of crisis, we can improve our approach to communications and protect, and sometimes even enhance, company reputations.