Challenges in Business: The Lifecycle of a Crisis

Crisis Management Process

Managing Crisis in the Workplace

None of us had any idea that it was the first day of what would become a 10 month, $25,000,000 investigation. It was late in the afternoon on a cool fall day when the Quality Assurance Manager and the Operations Manager came to my office with a concern over a product defect that had been noticed in the factory earlier that day. I promptly brought some of my most experienced employees and technical specialists into my office to assess the situation. The technical specialist expressed concern. The material used to make some of our products exhibited tiny cracks. “How did we find this?” “Have we found any other products using this material to have the same cracking?” “Have we shipped anything else that might have had these defects?”

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As we sat there looking at the data, all of us fidgeted in our seats as the realization of what we might be dealing with set in. Though some of the people in the room were optimistic and tried to suggest this was a limited issue, within 48 hours we had confirmed there was a high likelihood of a significant quality escape from our facility and that we were dealing with a major crisis. To make matters worse, the two customers affected by the issue were some of the world’s best known vehicle brands.

Among the many challenges facing managers today, one of the most stressful and emotional situations you will ever deal with will be managing or handling a crisis in the workplace. It is inevitable. Regardless of your profession – manufacturing, politics, or IT security – unforeseen circumstances will evolve and result in a major problem that will test even the most seasons of managers and leaders.

Having managed and led teams through chaos and crisis a few times in my career, I learned along the way that every crisis follows a similar pattern and trend, regardless of what industry or profession you are in. As shown in the plot below, the life cycle of a crisis compares the morale and confidence of a team over a period of time. The life cycle shows five distinct phases, which we discuss below.

Crisis Management Process

Phase A: Discovery

The point at which you identify an issue or an event occurs is the initial phase of the crisis life cycle. In the early moments, days and weeks of the crisis, you and the team are likely to question the severity of the issue, and may even downplay the concern altogether. But the Discovery phase quickly erodes as initial questions are answered and the full scope of the situation begins to reveal itself. There is always a hint of optimism in the Discovery phase, as all players want a swift and painless resolution.

In the example described above, several team members were of the opinion that we were overreacting and that we would have caught such defects. Others were skeptical. And only a few simple checks of production history revealed the same raw material had been used for parts that had shipped months prior.

Phase B: Awareness

The second phase of the crisis life cycle is the Awareness phase. This is the phase of the crisis during which the team becomes more aware of the situation as continued fact-finding reveals the extent of the issue and the magnitude of the problem. Typical activities during this phase include generating numerous questions and theories as well as identifying possible avenues towards a recovery. However, as such questions are being posed and answered, new actions and questions are raised as knowledge is gained. Phase B is often riddled with chaos and confusion as there are typically more questions are being asked than can be answered during that period of time. Also typical of the Awareness phase, pressure from inside and outside the organization for swift resolution continuously mounts.

Relating back to the cracked material situation, the team spent about 4 months trying to understand the cause and effect of the cracked material, uncertain if the issue was caused by a specific process or if it would lead to problems and premature failure of parts in the field. We were under tremendous pressure from our senior managers as well as our customer to find quick and swift resolution to the situation. The list of questions grew rapidly, and experts from around the corporation were flown in to help answer them. Every day seemed to get worse.

Phase C: The Trough

The third phase you encounter when dealing with a crisis is the feeling of hitting rock bottom. The Trough is easily the most difficult and challenging phase of managing or dealing with a crisis because morale and confidence in success are at their lowest. The problem has worn on you and the teams has reached the point of exhaustion. Whether you are leading the investigation or just a participant, keeping the team motivated and engaged to bring about resolution will be of the greatest importance. But a small phenomenon occurs when you’ve reach the bottom: you will now understand the full scope of the issue, or at least a vast majority of it – no matter how large – and will begin to turn the corner in the coming days and weeks. Further, it is at this inflection point when the ratio of answers to questions begins to equalize. That is, while more questions may emerge, you’ve been able to address or close others.

In the case of the cracked material, it was not until month 5 that we hit rock bottom. The 14 hour days had worn the team down to the point of utter exhaustion. Tempers were flaring, some team members had begun to look for new jobs, and others had simply resigned to apathy. Despite the bottoming out of morale, though, we had reached a waiting game as several trials and tests were underway, the results of which would help point us in the right direction to get out of the crisis. While we still needed to gather data, most of the facts were on the table.

Phase D: Recovery

Phase D, or Recovery, is the phase during which the team finally begins to methodically work your way through the issues and drive towards resolution and recovery. In a crisis situation, you will know when you’ve reached this phase when you begin to converge on a single path, even if it still has a few holes in it. As part of the recovery, you will finally begin to see more answers than questions emerging. Even though other items will emerge, you will see topics and issues from the weeks and months prior begin to dissolve as you’ve closed down certain avenues and lines of thinking. Although the team will be worn and tired, the overall stress of the team will begin to decrease as progress along the path continues. Phase D is also the point in a crisis resolution when activities shift from research, fact-finding and ideation, to planning, implementation and execution.

Between January and May, the crisis we dealt with concerning cracked material began to slowly shift from fact-finding, to decision making, to execution toward a single objective and corrective action. The team was worn and fatigued, but every day became less and less painful as actions were closed, results were verified and testing was successful. Over those months, while pressure was still tremendously high and the financial impact of the issue grew at over $500,000 per week, we converged on a solution that would ultimately get us out of the situation.

Phase E: Emergence

The last phase of the crisis life cycle is known as Emergence. You will notice that Phase E is actually higher than where you started, at Phase A. This is because every crisis ends with things in a better state than before. You are usually better off than you were when you started – you learned something, eliminated an issue, or rebuilt something to make it better than it once was. And o matter how painful the process may have been for you, the team will feel a tremendous amount of satisfaction and sense of accomplishment after overcoming the crisis and having found a solution.

With respect the cracked material crisis, we ultimately identified and validated a resolution and a change in an upstream process that helped prevent the material from cracking. Working hours began to decrease as the workloads began to subside. At one point, nearing the end, someone finally had the courage to say “we’re beginning to see the light at the end of the tunnel.” Finally, while emotion and facts were still fresh in mind, we held a lessons learned discussion to capture what the experience taught us about our processes, our organization and our business.

Managing a crisis is one of the most challenging and emotionally draining experiences you will encounter in your career. But by understanding the lifecycle of the crisis, you can better recognize the progress you are making and where you are in the cycle. The next time you are faced with a crisis situation, use the plot above to help your team cope with the stress and pressure as you work towards resolution.

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