How Not to Manage a Crisis

Introduction

The tragic events in Ukraine have brought home to many of us the horrors of war.  The graphic pictures that have emerged from the fighting, bombing and evacuations have highlighted the importance of diplomacy, preparedness and the need for international cooperation.

As a youngster I can recall the Cuban Missile Crisis in 1962.  I remember how, throughout the fall of that year, everyone sat glued to their television sets wondering if the world would once again slip into global conflict.  However, what makes this crisis so very compelling and different from the Cuban one is that I don’t have a really strong comfort level that the leadership in the West has a firm grasp on what is happening behind the scenes.

A Study in Contrasts

The crisis in 1962 had three dominant figures:  U.S. President John Kennedy, Soviet Leader Nikita Khrushchev, and Cuban dictator Fidel Castro. The issue was starkly clear; namely, the positioning of nuclear warheads 90 miles off the coast of Florida.  Positions were clearly staked out, and tensions escalated daily.  The resolution of the crisis increasingly came down to a case of who would blink first.  The crisis was eventually resolved through back-door diplomacy.

That situation was markedly different from the one playing out now in the Ukraine.  Russian Leader Vladimir Putin is clearly a dominant figure.  In contrast Ukrainian Prime Minister Volodymyr Zelenskyy is a highly visible and inspiring symbol and role model for his people.  Who however, is the champion of Western interests?  Sorry, but Joe Biden doesn’t inspire me with a great deal of confidence.  Ditto U.K. Prime Minister Boris Johnson and French President Emmanuel Macron. 

What is most bizarre for me has been the contrast in leadership styles between business leaders and strategists, and those in public office.  There are fundamental differences in the approaches of these two segments of society in their approach to crisis management.  Most apparent has been the lack of preparedness in dealing with contingencies and emergencies.  The question I’m left with is how our politicians can’t comprehend what many businesses have known for years.

 

Hard Business Lessons Learned

1. Don’t ignore omens.  For months leading up to the February 23^rd invasion there were multiple ominous warnings that Russia was planning to invade.  The warnings were stark and clear. What bewilders me is the diffidence with which these warnings were greeted.  This should have been an opportunity to arm and prepare the Ukraine by Western allies.  Clearly, no one thought the Russian President would be so brazen as to invade.

Like politicians, business leaders need to be prepared.  One positive development in the past ten years has been the growing awareness of business continuity planning and disaster management.  Many organizations have adopted performance dashboards to clearly measure the apparent threats from external elements as varied as DDOS attacks to floods, natural disasters and medical emergencies.  These are critical in keeping abreast of important events and being trained in knowing how to respond.

2. Prepare for the worst and hope for the best.  As I write an estimated five million Ukrainians have now fled to other countries, notably, Poland, Romania and Slovakia. Given the experiences from other conflicts one might have expected that Western forces would have prepared for the prospect of hundreds of thousands fleeing this conflict, and then taken the necessary precautions.  Canadian Prime Minister Justin Trudeau has commented that Canada will accept an unlimited number of Ukrainian refugees.  However, how can one even budget when there is no realistic measure of the exodus?  While relief organizations have mobilized and stepped up to deal with this onslaught of refugees where was the advance planning prior to February 23^rd?

Business professionals and owners understand that planning for adverse business conditions, market downturns or unexpected events is a necessity.  While some developments, such as the pandemic, were clearly beyond the realm of possibility a few years ago, businesses have since weathered this recent economic storm better than expected.  They plan for these contingencies, and they anticipate what to do in a crisis.  Role playing various disaster scenarios was a quarterly occurrence when I worked in the banking sector.

3. Never underestimate your opponent.  Vladimir Putin is a cold, calculating and device military strategist.  That was clearly confirmed through previous invasions in Chechnya and Syria.  Anyone who would use chemical weapons on civilians clearly has little respect for the innocent victims of war.  Western leadership never anticipated that Putin would make good on his invasion threats.  When he did, they assumed that Russia’s imperialistic and monopolistic ambitions could be curtailed by sanctions.  Sanctions have been in place in Cuba since 1962.  The Communist regime is still in control sixty years later.  I for one am not optimistic sanctions will work in this case either.

Any business owner will tell you that the first critical element before even starting a business is a business plan.  As part of that plan most owners will have created a SWOT analysis.  Understanding your competition, dealing with threats, recognizing the uniqueness of your value proposition, and leveraging your strategic advantages, are critical to staying financially solvent.  The same strategy applies in military manoeuvres.  

4. Create backdoor channels.  The quiet diplomatic channels that exist away from the spotlight of television cameras and microphones are often the best means of resolving conflict.  We saw this during the Cuban missile crisis when Robert Kennedy, the U.S. President’s brother, held private talks and discussions with the Soviet ambassador, Anatoly Dobrynin.  The process through which that crisis was resolved is illustrative for politicians and military figures alike:

https://blogs.scientificamerican.com/observations/rfks-secret-role-in-the-cuban-missile-crisis/

One only hopes that similar channels are being deployed now in the hope of securing a quick and peaceful resolution to this incident.  The difference between this crisis and the one in 1962 is that Putin seems to have deliberately silenced opposition and surrounded himself with those who think, say and do what he wants.

Businesses have known all along about “back doors” for years.  A key component of business is networking which doesn’t just apply in job search. Networking affords an opportunity to make contacts and alliances.  Those alliances become a segue to connecting with suppliers, decision-makers, customers and advisors in a marketplace that is becoming increasingly inter-connected.

Equally important in business is seeking input from different sources and channels. Business leaders recognize that reliance upon one source of information is both dangerous and short-sighted.  Soliciting varying input provides diversity of perspectives and allows business leaders to adapt and pivot where necessary.

5. The best defence is a good offense, and vice versa.  The Ukrainian government had been asking for months for military supplies and hardware to defend themselves in the hope it would act as a deterrent to a Russian invasion.  If truth were known I suspect they sensed all along that an invasion was inevitable.   The meagre supplies offered up by NATO countries have been miniscule in relation to what is needed to thwart a Russian advance.

Similarly, businesses know when the circumstances are ripe for retrenchment or growth.  Financial forecasts, both leading or lagging indicators, provide a road map on how to prepare for and weather financial storms.   Businesses make plans.  They sell off non-performing assets.  They enter into strategic business alliances.  They pay down debt.  They do what is necessary to survive.

6. Silence is sometimes golden.  For me, the most offensive and ridiculous part of this entire conflict has been the way it has played out on social media.  Someone needs to tell Western leadership that there is value in the art of surprise.  In a crisis it is not expected that leaders will telegraph their every idea, plan or strategy broadly so as to secure public consensus.  If the intent is to formulate plans that will astonish one’s enemies, then socializing your strategy on Twitter, Facebook, Tik Tok, etc., is neither prudent nor smart.

Following a coup in October 1983 the United States invaded Grenada and overthrew the leaders of the insurrection which had strong ties to the Communists.  The coup had been supported by the U.S.S.R. and Cuba.  The incident happened so quickly, and the results were so overwhelming, that the world was shocked by what occurred.  Clearly, the U.S. President at the time, Ronald Reagan, knew how to counteract a threat.

https://en.wikipedia.org/wiki/United_States_invasion_of_Grenada

While most businesses are routinely engaged on social media none of them would be so sublime as to publish in advance every aspect of their business strategy.  In business, as in life, surprise offers a critical advantage.  Businesses survive on discretion and confidentiality.

A Final Thought…

The world has just emerged from two years of shutdown and dealing with the frustrations and the aftermath of the COVID pandemic.  Now we are given a front row seat to what may possibly become the worst global conflict since World War II.

As a student of history I often reflected on the naïveté that surrounded British Prime Minister Neville Chamberlain’s peace accord with Adolph Hitler in 1938.  How could someone, in the fact of such obvious genocide as that committed by the German leader against the Jewish people, possibly think the German Fuhrer would comply with the terms of a peace accord?  A year later the Germans invaded Poland, and what ensued was six years of the deadliest conflict in modern history.

I sometimes wonder if we have learned anything from that experience.  As I watch the carnage unfolding nightly on my television screen, I’m increasingly convinced we haven’t.

Edmund Burke once said that “The only thing necessary for the triumph of evil is for good men to do nothing”.  If our current leadership is so intent on emulating the example of Neville Chamberlain then I’m left wondering, and hoping, who will eventually step up and become a modern day Winston Churchill.