Crisis can befall any organisation, large and small – often, it’s when you least expect it. When it does hit, however, the organisations that come out of a crisis aren’t always the ones that had the most rigorous planning – in fact, sometimes it’s a variety of factors that define whether a corporation has successfully managed a crisis.
In recent times, two major Australian businesses have highlighted what not to do when managing an incident. Popular telecommunications provider Optus and airliner Qantas are currently experiencing the wrath of a public that has not accepted the standard that either company has set in recent years. The standards set by these organisations were so egregious that there’ll likely be a course for business leaders in the future highlighting these scenarios exactly as what not to do in a crisis.
What can organisations look to do to be responsible companies during times of crisis? Is it possible for a company to succeed, or thrive, during times of adversity and crisis? Let’s explore what it takes to successfully manage a team during the perils of a crisis.
A Crisis Can Define An Organisation
A crisis can be a critical inflection point for an organisation. Former Intel CEO Andy Grove said of crises “Bad companies are destroyed by crises, good companies survive them, great companies are improved by them”.
Reflecting on recent business crises in the technology and banking sectors highlights this quite well. Take, for example, Intel’s competitor and competitor AMD’s manufacturing crisis of the early-2010s – falling behind Intel, struggling to build competitive products, and nearing bankruptcy, AMD managed to persist through this crisis by appointing a new CEO in Lisa Su, as well as restructuring the organisation.
The impact in the nine years since has been clear – AMD has managed to pull itself back from the brink by developing high-quality product ranges such as the Ryzen chip series. It has navigated the challenges of crisis and defined itself as a market leader in the industries in which it operates. It is in this example that Grove’s words hold fast – which is somewhat ironic, given that it is for one of Intel’s most significant competitors.
Acting Fast and Sincere is Crucial
It’s essential that when a crisis occurs, businesses react fast. Nobody wants a telecom outage, a transport disruption, or a cyberattack – but in the face of a changing world, these events can and will happen to nearly every organisation, big or small.
What’s critical is that businesses communicate quickly, and clearly, and demonstrate empathy. Attacking or blaming customers will not garner any favours, and in fact, can cost you customers. Communicating with staff is also essential – informing them of any issues can help them support customers who are seeking answers.
The recent Optus outage of November 2023 highlighted just how badly poor communication can impact senior personnel at an organisation. When their network was knocked offline due to system upgrades at 4 am, disrupting everything from emergency service calls to metropolitan rail networks, Optus failed to respond for a whopping seven hours.
The impact was both devastating and brutal. Customers stormed Optus stores, demanding an update on their issues – and flocked competitors to change brands. Government officials, in the dark on what the issue was, leaped to criticise and condemn Optus for its relative silence in the matter. It could be considered as one of the many reasons CEO Kelly Bayer Rosmarin found herself out of a job, less than two weeks later – the public simply does not accept poor crisis management as an excuse for a problem.
Learning From Experience
It’s important that when a crisis occurs, a business seeks to learn lessons from the issue. Crisis management goes beyond a single incident – it may involve preparing for potential future events through the use of workforce and continuity planning, or understanding how crisis embroiling competitors can be understood to help protect from future knock-on effects.
For airliner Qantas, a series of ongoing controversies, from unfair dismissals, and ongoing cancellations, to regulatory scrutiny, embroiled the organisation in a reputational crisis in 2023, resulting in the early retirement of CEO Alan Joyce in September. The resignation of Joyce did little to appease customers – and fiery scenes at the company’s annual general meeting (AGM) in November highlighted just how acrimonious the ongoing crises had become amongst shareholders.
Ultimately, a company should be able to learn from past experiences of dealing with crises. The playbook may seem difficult to follow, however, in reality, Qantas could have learned from how competitors had been handling flight disruptions and dealt with them in a far more reasonable way.
When businesses fail to learn from a crisis, they inevitably position themselves to fail. If a business truly wants to succeed in these difficult situations, senior executives should reflect and ask themselves what they can do to best position themselves to rebound and thrive in the face of adversity.