How do the most successful companies deal with a crisis? What are business leaders really thinking and feeling whilst neck-deep in the worst crisis their companies have ever seen? Thanks to PwC (and assuming their questions were answered honestly) we now know that they include a range of feelings from ‘stressed, anxious and frustrated’, through ‘abandoned, out of control and angry’ to ‘resentful, devastated and embarrassed’. Words and feelings like ‘confident, resilient, determined and focused’ were cited much less by the respondents to the survey.

I don’t think PwC is in any way suggesting that a predominance of fearful feelings points to a crisis in the gene pool of our crisis management professionals, or that business leaders are not up to the job.

It is saying that emotions are extremely powerful, and that experiencing a crisis will change the chemical balance of human behaviour in unpredictable ways. While most of us would like to think that we would respond well in a crisis, research shows that the pressures of a crisis can trigger physical reactions capable of distorting perceptions, decisions and outcomes, including stimulation of the amygdala, which activates the ‘flight or fight’ response and a reduction of available working memory, not to mention a lack of sleep during particularly drawn-out crises.

This can then impair executive function in any number of ways, including a tendency to mistake assumptions for facts, the inability or reluctance to make any decision until all the facts are in (rarely available in a crisis); tunnel vision and confirmation and overconfidence bias – even among senior business leaders, accustomed as they are to the luxury of clear facts and options prior to making decisions. The sudden need to make fast and hugely impactful choices based on incomplete and possibly inaccurate information is extremely stressful. The accountability factor only adds to the tension.

This piece of work is thought to be one of the most substantial studies undertaken on the human response to crisis in business management, and was carried out by recognised leaders in their field. Detailed accounts from more than 2,000 professionals, with experiences of 4,500 crises together form a picture of how companies can better understand the actual dynamics of crisis, reverse-engineer positive experiences, and emerge from crisis transformed for the better. The study is, in and of itself, a fascinating read for anyone in the business of risk management, business continuity and indeed insurance; but, more importantly, it is a useful reminder that at a time of ongoing uncertainty, regular crisis preparations often fall by the wayside as organisations struggle to deal even with what is in front of them. But leaving it to chance is not an option. In a crisis situation, human instincts can be counterproductive. Successful companies are those that have tested their human crisis readiness, and that means establishing what their values are; having confidence that, in the heat of a crisis, decisions will appear aligned with those values; ensuring your crisis communications are in tune with the needs of all of your stakeholders; balancing the dynamics of crisis response teams; and then testing it all again and again.

Finally, having a clear definition from the outset of what constitutes a crisis and what might otherwise be referred to as an incident is as good a place as any to start.




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