Five Stages of Crisis Management

By Tom Morrison posted 10-21-2015 08:42 AM


Within a heat treat plant, many may wonder the need for crisis management.  All you have to do is walk through a plant to understand the opportunity for crisis is great, considering how many potential safety hazards, chemicals, people, and forklifts are running around a plant.  The time to understand crisis management is NOT after one takes place.  The following is a good read by The Business Owner on the five stages of crisis management.  Sit down with your key team leaders and ensure that you have a solid safety and crisis response plan in place in the event of an accident, explosion, or any other type of crisis taking place in your plant.

Crisis is a part of life. It will visit every person, relationship, family, community, and business. In addition to the event itself, crisis brings chaos, confusion, and emotion. Business owners and leaders will be tested in times of crisis and their followers will either benefit or suffer from the leader’s management skills.

Jack Welch, former Chairman and CEO of General Electric, penned an article some years back that appeared in The Wall Street Journal titled, “The Five Stages of Crisis Management.”  He said, “Hurricane Katrina is practically a case study of the five stages people seem to have to go through during crisis.”  Here are his five stages:

Stage One: Denial

“The problem isn’t that bad,” the thinking usually goes. “It can’t be, because bad things don’t happen here. To us.” Mr. Welch goes on to say, “Denial in the face of disaster is human, but one of the marks of good leadership is the ability to dispense with denial quickly and face the hard stuff with eyes wide open and fists raised. Good leaders also define reality, set direction, and inspire people to move forward.”

Jack thinks denial in New Orleans started long before the storm, with respect to the inadequacy of the levy system and the unacceptable depths of poverty.

Stage Two: Containment

Containment plays out in one of two forms, says Mr. Welch, with leaders either trying to keep the matter quiet or “buck-passing”. Keeping the matter quiet is useless, as problems – especially the messy ones – always get out. Buck-passing is “… where people, including perfectly capable leaders, try to make the problem disappear by giving it to someone else to solve.”

In New Orleans, the city and state screamed for federal help. The feds said they couldn’t send in the troops until a formal request was made. And round and round it went.

Stage Three: Shame-Mongering

“All parties with a stake in the problem enter into a frantic dance of self-defense, assigning blame, and claiming credit.” Katrina’s shame-mongering blasted into overdrive within 48 hours of landfall. The topic was not the devastation of the storm, but about who was to blame: Republicans? President Bush? Michael Brown/FEMA? The Mayor of New Orleans? The Governor? The uncooperative poor? 

Stage Three activities simply waste precious time and energy. Strong leaders must avoid shame mongering, and instead quickly and boldly define the problem, outline a plan of action, and get to work.

Stage Four: Blood on the Floor

In just about every crisis, a high-profile person pays with his job. Sometimes, they take a crowd with them. Mr. Welch explains that people need to feel that someone has paid dearly for what went wrong. Michael Brown, the head of FEMA, was the first to go in the New Orleans disaster. Then, the Chief of Police.

Stage Five: The Crisis Gets Fixed

“Despite prophesies of permanent doom, life goes on. Usually, for the better,” explains Mr. Welch. History shows that crisis almost always gives way to something better. Crisis primarily serves to show where the system is weak. Once Stage Five is reached, the affected galvanize their mutual commitment to a better future. They begin working together to prevent the crisis from ever happening again, often with great success.

Jack Welch cites the Tylenol tampering crisis as an example. He explains that such an event is unlikely to ever occur again at Johnson & Johnson, as the company has permanently changed to a culture that goes to extremes to prevent product tampering.

By understanding the natural human cycle of crisis response, business owners may be better able to lead their constituents effectively during times of crisis. After all, crisis is just another opportunity to learn, and then build something more sound, stable, and durable (once Stage Five is reached).

Provided by The Business Owner, an online periodical focused on issues impacting small to medium businesses.