A Newsletter from Harvard Business School Publishing

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management update ARTICLE REPRINT NO. U0508D

Managing a Crisis
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The Essentials
Managing a Crisis
How to make good decisions in the heat of the moment
Adapted from Harvard ManageMentor®
C
rises require fast, confident
decision making. But how do
you make good decisions
when events are moving quickly and
it’s hard to sort out what’s important
and what isn’t?
Be aware of the effects of stress
Typically, three emotions combine
during a crisis: fear of disaster, antici-
pation of a potentially positive out-
come, and a desire for the crisis to be
over. Each pulls you in a different
emotional direction; together they
create a distinct feeling of stress.
And under stress, you feel the
pressure to make a decision. But the
pressure can push you toward mak-
ing decisions solely to be “doing
something.” And so often people re-
spond to crises in ways that can ag-
gravate—rather than relieve—the
crisis. Be sure to avoid these futile
and often harmful responses:
When in doubt, scream and
shout. The noise may make it seem
as though you’re doing something,
but it is a waste of energy and fails to
lessen the crisis situation.
Hide your head in the sand. At
times, the pressure to act becomes
so stressful, you slip into a state of pa-
ralysis and can’t make any decisions
at all.
The leadership role
Whether acting as the CEO of a large
corporation or a supervisor of a de-
partment, an effective leader finds
out as quickly as possible what the
Copyright © 2005 by Harvard Business School Publishing Corporation. All rights reserved.
real problem is. Often in a crisis,
there will be a flurry of information,
most of it inaccurate. It’s your task to
discover the truth and face it by ask-
ing the right people, listening to the
most reliable voices, and going to the
right places.
A leader in a crisis responds to the
crisis by:
• Turning fear into positive
action.
• Being vigilant—watching for
new developments and recog-
nizing the importance of new
information.
• Maintaining focus on the prior-
ities—ensuring that people are
safe first and then assessing the
next most critical needs.
• Assessing and responding to
what can be controlled and ig-
noring what cannot.
Once you get a handle on the
problem you are facing, there are a
few realistic options open to you:
Work together. A leader has the
power to draw people together. If
your team knows you are in charge,
they will respond to your direction.
For example, when a catalog re-
tailer that offered a large number of
custom products—monogrammed
bags, sweaters, etc.—put out its holi-
day catalog, it was shocked by the
positive response. From the moment
the catalog was released in October,
phone lines were swamped. The re-
tailer hired temps to work the phones
but still had a huge bottleneck in cus-
tomizing and shipping. And if the
company didn’t get everything
shipped in time for Christmas, there
might not be a next season.
So the CEO put out a call for help
and recruited management and ad-
ministrative staff to work evenings in
the warehouse—after they had done
their regular jobs. Everyone from the
top down worked together for six
grueling weeks. By working as a team,
the company eventually enjoyed as-
tonishing success by growing 80% in
that one year. What could have been a
crisis and failure was turned around
by teamwork.
Avoid blaming others. As crises
heat up, the impulse to lay blame can
become irresistible. A team member’s
incompetence or serious error may
have caused the crisis or may be per-
petuating it, but during the heat of
the crisis, trying to find a scapegoat is
wasteful. Focus on handling the cri-
sis, not on blaming others.
Later, it will be up to you to deter-
mine if someone should be repri-
manded. But keep in mind that
constant fault finding, particularly in
the heat of the moment, lowers mo-
rale and stifles the creativity and
commitment you need to solve the
problem. Create an atmosphere
where people look forward to what
needs to be done, rather than back-
wards to who was at fault.
Do what needs to get done.
Rules, policies, structures, proce-
dures, and budgets are created to
maintain order and provide a pro-
ductive process in the normal course
of business. But most rules were not
created with a crisis in mind. When
you’re in the midst of it, do whatever
has to be done, and don’t worry
about the “rules”! ◆
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