Being the CEO of a company and you are must know how to look after several employees. The importance of Disaster Management must be clear to you for your organization. There can be many types of disasters that can occur in an organization. This can spoil the company’s reputation. The advent of social media platforms can also aggravate this problem. By providing graphic images of these disasters social media can ruin the company’s image. For instance, a disaster struck United Airlines when one of its passengers was violently removed from a flight. This video was then viewed 100 Million times on Twitter in the next 24 hours.
A disaster could be anything from a cyber-security breach to a sexual harassment case, a government investigation or a troubling video. The common thread in each of these cases is that you are fighting against time. All these cases can lead to damage to the reputation of an organization. This is a major risk that any organization faces at all times.
The CEO plays a crucial role in managing his organization’s reputation. As per the disaster, the best response can come from a responsible CEO who is more engaged and caring. If the CEO is personally invested in the company then all the employees, shareholders and customers would have the same outlook. A solid disaster management plan involves transparency, accountability, and authenticity.
In cases of high risk, the CEO is bound to share a response, for instances of a crisis when:
a) The situation impacts many employees.
b) The disruption causes litigation and affects the stock prices.
c) The media coverage is excessive. This may cause a loss in confidence among the shareholders or the customers
In any organization, big or small, disaster is inevitable. Every CEO has to manage some amount of crisis in their tenure. It could be an industrial accident, financial improprieties, product tampering or hostile takeover. Any event that is a threat to the company’s reputation or financial performance or its relations with the stakeholders can be a disaster.
Companies face a crisis of different types; some might be preventable while others may not be. Many of the disasters could be created by the company itself and for such a disaster; the board will have to play a crucial role. Any alert board must step in to take corrective actions.
Below are some disasters that might emerge in an organization:
a) The disaster that emerges and originates externally can involve economic downturns or competitive threats, alliances of competitors, regulatory changes, etc.
b) The disaster that emerges and originates internally. Examples include strategic mistakes, failed product launches, employee discrimination suits, etc.
c) The disaster that emerges abruptly and originates externally. These are the most obvious disaster like natural disasters or terrorist attacks.
d) A disaster that emerges abruptly and originates internally. They include the failure of technology, production, delivery systems or fraud.
If a disaster emerges gradually then a risk designed carefully will give warnings for the company to avoid any problems or to entirely take corrective actions. The abrupt disaster sometimes gets problematic and cannot be predicted. The best way to counter it is through planning that can help a company avoid consequences. Effective plans to manage disasters involve plans that identify various roles depending on the role of management in disaster. The most challenging situations are when CEO causes the disaster and the board has to call for independent guidance.
Any organized disaster has to be dealt with the expertise. The efforts should go in restoring confidence in employees and investors. The member of the board has an important role and the board will operate in the background. The CEO becomes the cause of the disaster. The boards in such a case have no choice rather than assuming the full burden of the situation.
The company also needs to decide who will take the lead in case of a disaster. They must also decide if the disaster will result in a conflict or not. In case of a hostile bid, there might be chances of the CEO's job is threatened. But this will be in the interest of the shareholders. The board is then liable to provide the necessary leadership to create stability. And keep the investor's confidence.
Any organizations’ board must have a detailed plan to deal with the sudden and unexpected loss of its CEO. If the emergency succession of the CEO is planned, then they need to inform top management about this plan that needs to be reviewed.
There are three roles of CEOs in a company which are envisioned, nominate and enable. The roles are to step back from the action and also create conditions for many others. The last role is to step forward and get in the middle of the action when disaster strikes. A disaster is an abnormal event. It happens against the expectations of the CEO. In volatile and turbulent times, any such event will have a high frequency.
When any such situation exists only the CEO can help in navigating such moments. One of the most important parts of a CEO's job is disaster management.
Here are some key qualities of a CEO in such a situation:
1. Accept And Prepare:
The best quality of a good CEO is that they understand the disaster. They know how to live through it whether caused by external or internal factors. Anyone that has seen any type of risks outside the company as a financial disaster, terrorism, etc. would know that it is important to accept and prepare.
2. Mitigate Risks:
If experts are to be believed then the best way of managing disasters is by avoiding them. The idea of risk mitigation is a part of the job of a CEO. If they analyze such risks then identifying these and control it, but managing these risks should be the last resort. A good CEO will develop a comprehensive system and identify risk and mitigate it. Such a function would need mathematical tools, data and human expertise with judgment and experience.
3. Cool-headed:
A disaster will lead to the CEO becoming more reactive. It is a natural human tendency where they regress towards their subconscious defense. A good CEO will work with a cool head and a rational mind and create a systematic solution.
4. Agile:
A CEO should have a cool head and should take speedy action to resolve a disaster. He should also be flexible and should give a quick response to any initial swift adjustments. Also, in the course of action, the ingredients of any type of effective disaster management should be there. Also, they should learn from mistakes.
5. Teaming:
A CEO can take the major responsibility for disaster management but in a dramatic situation, the fundamental cause is the complexity of a business landscape. As a company can’t be managed single-handedly hence during uncertainty it is more important to get inspired by the CEOs experience. Thus it is important to mobilize the people from all departments of the company to achieve the ultimate goal.
So, a CEO could be anyone but if he has all the above-mentioned qualities then he will be a good manager in disaster.
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