Nobody likes to think about worst-case scenarios. But for Ian Mitroff, a professor at the Marshall School of Business at the University of Southern California, it’s more than just a preoccupation-it’s his job.
Mitroff is an expert in crisis management, and given the sheer volume of full-blown crises the U.S. has endured in just the past five years-from Sept. 11 to corporate scandals-the time to start planning for the next crisis is upon us. And the benefits of preparing for disaster go far beyond being prepared when panic sets in. The process can help to identify inherent weaknesses in any organization. CIO Insight Editor Ed Baker and Executive Editor Dan Briody discussed the importance of crisis management with Mitroff.
CIO INSIGHT: How do you define a crisis?
MITROFF: There is no exact definition. A lot of people want to make it predictive, and you can’t do that. I deal with academics all the time, and they want an exact definition, but that’s not what you’re going to get. Different stakeholders define it differently.
So how do you know when you’re in a crisis?
In the beginning stages of a crisis, you may recognize the precipitating event. Like at ValuJet, when their plane crashed in the swamp in Florida. You don’t know whether events are going to spiral out of control. And that depends on whether you manage, or mismanage, the situation. In the beginning, there is always a huge amount of uncertainty. And the critical thing is whether you take responsibility before it’s a full-blown crisis, which may head it off.
If President Clinton had said, “Yeah, I did something I shouldn’t have done,” then he might have prevented his impeachment. But the more he delayed it, the more he fed into the crisis. Most people do more of the same thing that got them into the crisis, rather than breaking the pattern.
So how can you identify when to intervene?
You have to intervene from day one. And you have to tell the truth, because my assumption is there are no secrets in today’s world. The news media are going to get all those secret documents and memos anyway, and they’re going to blow them up on the six o’clock news.
Why is crisis management so much more important than ever before?
Because the systems are more complex and the media is more 24/7. In 1984, a very good sociologist, Charles Perrow, wrote a very important book called Normal Accidents, which included things like chemical spills, nuclear meltdowns and airline disasters. The reason they are “normal” is that major accidents are almost guaranteed to happen because the technology being used is so complex, but the management systems are not up to the level of that complexity. And that complexity continues to increase.
And now you have things like Sept. 11, which is abnormal, an intentional crisis. So now you’ve got both: normal accidents due to complexity, and abnormal accidents due to human intention. You have increasing complexity in addition to people who want to deliberately exploit that complexity.
What about something like the Exxon Valdez oil spill?
That’s a classic normal, except they wanted to pin all the blame on Captain Joe Hazelwood. He certainly deserved a lot. But it was the system that was flawed. It’s always easier to blame one person. But there are stories that Hazelwood, years before it happened, was in a storm and his mast broke on the ship. He came back to port, and he was castigated by his superiors for not staying on the schedule. So you have to look at the whole system. Hazelwood was, of course, a drunken captain, but don’t tell me the system didn’t know.
Can you do risk analysis to avoid crises?
Exxon Valdez, Chernobyl, Sept. 11-every one of these things wouldn’t have happened if six improbable things hadn’t coincided. Well, somehow they did. That’s why risk analysis doesn’t work. Risk analysis is always faulty. You’re not going to get a Sept. 11 scenario through risk analysis. It’s too high consequence, low probability.
So crisis management is picking at least one low-probability, high-consequence scenario. So crisis management is actually picking at least one crisis in each field, and thinking about the unthinkable. And it doesn’t matter what you imagine, because everything gets unique. You just want to be prepared to adapt.
Next page: Discovering a Crisis, Preventing a Disaster