Decide Early to Act Quickly

Crises demand action. Making decisions ahead of time and empowering employees could make your response more effective.

The plane carrying your CEO crashes. Hurricane power outages take down your technology network. Your CEO and CFO are implicated in an SEC investigation. A disgruntled former employee brings a gun into your place of business and starts shooting.

If you're part of the team responsible for responding to any of these crises, you don't have much time before you have to start communicating with your various audiences - employees, customers, shareholders, regulators, etc.

Crises require quick, decisive action. People expect and demand action.

One way to speed up your organization's response regardless of the situation is to pre-authorize certain decisions.

Pre-authorization means making as many decisions as possible about crises well in advance of the need to actually respond. These are important decisions made ahead of time so that those empowered to respond to the crisis are also empowered to decide and act.

By way of analogy, Ritz-Carlton hotels have applied this principle to customer service issues for years. The company has pre-authorized any first-line employee to spend up to $2,000 to solve a customer complaint without fear of reprisal.

Pre-authorized decisions are a good complement to the centralized crisis response team approach employed by many organizations. The decisions occur within the parameters set by the centralized, while giving those closest to the crisis the opportunity to act without having to seek approval for every decision.

For example, a district manager may be pre-authorized to hire temporary workers and offer meal vouchers during a natural disaster. A bank teller might be pre-authorized to cash checks for known clients during a system outage.

Before you can pre-authorize decisions, there are three key questions you need to answer:

What are the crises most likely to strike your organization? While 90 percent of crises are operational in nature, you still need to be prepared for the other 10 percent of possibilities (like the plane crash mentioned above). If you're a restaurateur, widespread food poisoning or the ecolli types of crises should be high on your list. Banks, on the other hand, are more vulnerable to security crises. If you're located in Alabama or Tennessee, tornadoes and their resulting physical and manpower problems are a likely source of crisis.

What impact will any given crisis likely have on your business? Let's say you lead the area's utility company. The crisis is an unexpected ice storm. The key impact is the loss of electricity for thousands of homes and businesses - your customers. A possible internal impact is that you might have asked customer service employees to stay to help handle the calls coming in to report outages. Your repair crews already have their marching orders.

How should your organization respond? Let's stay with the utility example. First, you could have pre-authorized a manager to guarantee a certain overtime bonus for those who stay to help out. Or that same manager might have advance authorization to buy meals and/or make lodging arrangements for those employees who have stayed and can't get home. You might have given an advance ok for someone to put an outgoing message on your phone lines to let people know there are outages all over town and you're working on them all as quickly as possible.

These are just a few examples of steps you might take to minimize the impact and maximize the effectiveness of your crisis response. A simulated crisis is one of the best ways to test levels of decision-making. Pick your most likely crisis scenario(s), come up with some pre-authorized decisions, and try them in a simulated exercise. Then have your leadership team critique the key decisions made during the crisis scenario and decide whether or not to pre-authorize those decisions to others in the organization.