Judgments during crises can either break the back of an organization or bolster how it is perceived in the marketplace. Johnson & Johnson’s Tylenol and the VA are recent examples where crisis action either aided or hampered the organizations involved.
Johnson & Johnson had a scare in 1982 when a malicious person poisoned bottles of their Tylenol medication. The company responded by temporarily pulling all their products off the shelf and began informing the public through media channels. The American public quickly forgave the company and respected their crisis strategy, which saved the product line.
Johnson & Johnson’s deliberate response to this crisis suggests they had a well thought out plan. If companies do not have any type of contingency plan to deal with various types of crises, it is usually noticeable in the chaos that ensues after an unforeseen event.
It is also apparent that the company put the customers first, because they made a sound decision not only to pull inventory to protect the customers but also to engage very openly with the public. During strategic planning sessions, Johnson & Johnson likely set a strategic objective that if any crisis were to occur, they would put the customers first and be fully transparent.
More recently, the Veterans Administration has been involved in a scandal where they were caught tampering with patient wait times to make them look more favorable. Many critics argue the VA’s crisis management strategy has been less than admirable, and public opinion still wanes.
Although you would think a government organization would be professionals when it comes to contingency planning, the opposite rang true with the VA scandal. The organization seemed to have no plan at all for responding to allegations that it was masking the real wait times of patients, and that dozens of service men and women died awaiting care.
The poor decisions during this crisis resulted in the top two VA officials being terminated and the VA being subjected to investigations from the VA Inspector General and the US Department of Justice.
The difference between making good or bad judgments in crises often depends on the level of contingency planning. During strategic planning sessions, leaders should “what if ” different scenarios and have a basic plan for emergencies. Contingency plans are effectively macros for future decisions. They provide information in a time of crisis, which is much better than starting from scratch.
Of course you can’t plan for every contingency, but some base plans are suitable for many situations. Contingency planning is an area worth learning about from the military’s playbook. They do a good job of developing contingencies because many lives depend on the creation and quality of these plans.
A General’s Reflection
When I was a Commander in Iraq, I took it upon myself to review the contingency plans (CONPLANs) for both my command and the lead command to which I was assigned. One day when I was “kicking the tires and checking under the hood,” I noticed that the port I was in charge of had some assets that would be quite vulnerable and do considerable damage if they were targeted by air strike or a creative terrorist with an Improvised Explosive Device (IED).
I felt a contingency was important for a couple of reasons. First, the port was one of the most important logistical nodes in the theater and was the key to most of the shipments of materials and supplies for the Iraqi theater.
Second, the port was surrounded on one side by massive tanks of chlorine, and on the other side was surrounded by massive oil tanks from the oil fields of the Arabian Peninsula. Any attack on either one of these could destroy a tremendous amount of important real estate.
Who knew what could happen if the two were to combine? I was surprised to discover that there was no CONPLAN for this scenario, so I asserted myself to ensure that those responsible developed a good one to address this potential disastrous event. To this day, that particular CONPLAN is still in the archives, and will undoubtedly help in case of disaster.
During contingency planning sessions, you should analyze the full range of potential situations that surround your business. It pays to be creative, and the military often does this by assigning a “red team” that represents an enemy. In the corporate world, you can follow suit by assigning a team of creative people to think of different scenarios for which you need to plan.
You must decide both what you anticipate for future challenges and also which operational leader should handle the situation. Whichever leader is deemed the appropriate one to manage the situation identified in the contingency should review the plan to ensure you have a winning response if the situation occurs. It is important to insist on high-quality planning because decisions made now can affect you greatly in a crisis down the road.
Operational leaders should take charge of developing these crisis action plans and should be assigned for the planning and execution of such plans if they are needed. It is also a good idea to review these plans periodically to make sure they have been kept up to date and that any new situations are captured. Updating contingency plans are also a good idea in case the would-be operational leader assigned to drive a crisis response is still within the organization.
The above excerpt is from Chapter 15 of The Diamond Process, Using the Diamond Process Model to Make Better Decisions
