Strategic Crisis Management
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You basically choose to ignore the ‘stakeholder problem’ until something dramatic happens and then react to deal with the ‘crisis’! Doing nothing may seem like a good idea when confronted with all of the other demands of the project (not to mention doing ‘real work’) but this is false economy. When the crisis erupts you are reacting to someone else’s agenda which places you in a vulnerable situation, the atmosphere is typically hostile and the time and effort needed to recover the situation can easily exceed the time and effort needed to employ any of the alternative options. Stakeholder engagement is relevant to any type of organisation: business, public or civil society. It is particularly important in the context of running an organisation responsibly and is integral to the concept of Corporate Responsibility. An organisation cannot be serious about Corporate Responsibility unless it is serious about stakeholder engagement – and vice versa. Stakeholder engagement is crucially different to stakeholder management: stakeholder engagement implies a willingness to listen; to discuss issues of interest to stakeholders of the organisation; and, critically, the organisation has to be prepared to consider changing what it aims to achieve and how it operates, as a result of stakeholder engagement. Successful management becomes the art of optimising long-term benefits for the organisation based on reconciling sometimes disparate stakeholders’ wants and needs (investors, employees, customers, suppliers etc.).
A Summary of Meaningful Stakeholder Engagement
The terminology of stakeholder and stakeholder engagement has become increasingly common parlance in international business circles in the last decade, particularly with regard to social and environmental performance. Stakeholders can be both local, having detailed information and opinions on a specific issue or region, or global, engaging directly with companies at the pan-regional headquarters level. The definitions above apply equally for both local and global stakeholders. The development of meaningful relations should add value to the organisation’s operations by reducing constraints on business and increasing the license to operate; allowing it to plan for the future, minimising risks and enhancing opportunities by better understanding the fast-changing PESTE (Political, Economic, Social, Technological, Environment) context; and, enabling it to better understand critics and potentially refute, convince or address criticisms. Furthermore, it will enable organisations to reassure stakeholders that they are on top of issues, and in some cases, be essential for solving problems. It is, therefore, justifiable in terms of time, money and effort expended in their development and maintenance.
Image Source: Characteristics of Crisis Management, Stakeholder Management, and Stakeholder Engagement. 2009 The Doughty Centre for Corporate Responsibility, Cranfield School of Management
Roles of governments and increased demand from citizens and the media
In addition to the emergence of new threats and vulnerabilities, elements to consider in the changing paradigm for crisis managers relate to the evolution of governments. While crisis management will always remain one of their fundamental roles, the wave of privatisation and decentralisation has reduced overall capacities in many governments to take direct actions to prevent or mitigate risks in sectors that are critical for the well-functioning of societies, such as utilities and infrastructure. Crisis managers need to adapt their approaches to deal with a variety of different stakeholders that all have different interests, priorities, logic, and values. Critical infrastructure in many OECD countries is largely operated by the private sector. Citizens also tend to organise themselves to respond to crisis through Civil Society and Non-Governmental Organisations (CSOs and NGOs), thus adding new players to the field who expect to be consulted during preparations and leveraged during operations. In the meantime, government openness and transparency, constant scrutiny by the media and widespread dissemination of information on-line and through social media put governments and their decision-makers under constant pressure. This pressure is all the more acute when a crisis occurs: citizens’ expectations are at the highest due to the emotional nature of a crisis. They demand more transparency, responsibility and high standards of ethics from their governments, which need to react almost instantly or risk a political backlash amid criticism of unresponsiveness.
Stakeholder management: shifts from reactive to proactive. By proactively managing your stakeholder community you will eliminate most of the crises and be in a much stronger position to deal with any that do ‘blow up’. Stakeholder management involves identifying your stakeholder community, recognising their needs and expectations and implementing a planned communication strategy1 to maximise their support for the project and minimise any opposition. Through regular, planned communication activities (remembering communication is a two-way process) you seek to identify issues and problems before they become significant and take appropriate steps to exploit opportunities and defend against emerging threats and problems. As with any ‘management’ function, the manager seeks to control and optimise the situation. This is essentially a ‘push’ process and includes elements such are ‘reporting’, ‘public relations’ (PR) and in larger projects and programs may extend to ‘customer relationship management (CRM).
Stakeholder engagement: requires a paradigm shift in thinking! Rather than trying to manage stakeholders to achieve the predetermined outcome your project was established to deliver, stakeholder engagement invites stakeholder to become part of the process designed to fulfill their requirements. The ‘solution’ evolves and adapts based on the interaction between the project team and its key stakeholders. Opening up to stakeholders and inviting them to be part of the solution to ‘their needs’ requires letting go of the concept of ‘one correct solution’ to an identified problem. In place of the ‘one answer,’ the project team and its stakeholders work together to develop an agreed outcome. The concept of stakeholder engagement is a central tenet in the Agile Manifesto where the client and the project team work together to develop the ‘best’ solution to the client’s needs, but ‘agile’ is not the only way to open up the power of stakeholder engagement. Many modern forms of contract typically used on major construction and engineering contracts also recognise that collaboration between key stakeholders reduces risk and increases the value of the project for everyone. Alliance contracts, ECI contracts, and various forms of partnerships and ‘supply chain’ arrangements all seek to remove the ‘command and control’ management approach to delivering defined outcomes, based on inflexible contract conditions; with collaborative working arrangements focused on achieving a mutually beneficial outcome.
Leadership: crisis communication vs. meaning-making
Co-ordination of the emergency response network, leadership plays a major role in crisis communication. During a crisis, the emotions of the population are usually running very high, and leadership must convey messages that answer their expectations. It is also essential to disseminate some important messages to the public at risk for its own safety, and this requires appropriate crisis communication techniques and tools. Traditional crisis communication consists of communicating messages on the status of a crisis, its impacts, the actions and measures that have been mobilised. It is usually meant to feed the media with facts and to demonstrate to citizens that the government is managing the incident as well as possible. Political leaders are often called upon to intervene in front of the media to play this role and therefore require specialised training. In the age of social media, where information is communicated widely from a large number of sources and both key information and false rumors are disseminated, crisis managers need to take social media information on board and also use these modern tools to share information and communicate. Dedicated social media response teams can be very useful for sharing crisis information with citizens. Meanwhile, traditional ways of communication should not be abandoned, as crises can damage telecommunication networks and thereby disrupt access to many social media platforms. When a crisis reaches such severity that trust in the government is severely challenged, crisis communication enters into a new phase, where leadership is critical. When citizens’ expectations are at their highest, leaders need to find the right words to provide meaning to what is happening. This “meaning-making” function of leadership refers to the capacity to provide not only information but a narrative that responds to public expectations. Reducing public and political uncertainty is fundamental to enhancing crisis management. Behind this storyline, the objective is to convince the public that they should trust the government at a very critical moment, one in which the level of trust may have significantly declined. Finding the right wording or the capacity of “persuasion” sometimes requires taking a step back from the event to tailor key messages that focus on the values of society. Setting a few officials aside can be a useful tactic in crisis cells to protect them from the heat of the events and from the media’s demands for immediate information.