Plan for the unforeseeable
Lord Balfour, a Conservative Prime Minister, observed that the longer he continued in office, the more he realized that “Nothing matters very much and few things matter at all.” In 1902, with the British Empire at its peak, such lofty indifference may have constituted a sensible, pragmatic approach to almost any disaster which might then have befallen the nation.
In 2018, we have taken the opposite approach. The media would have us believe that there is a crisis every day. “A scared reader is tomorrow’s reader” worked well as a maxim in the newspaper world of print and it has lost none of its vigor as the world has gone digital. The concept of “crisis” has gone into the language of daily routine; another day, another crisis, be it for the National Health Service, for the Prime Minister, for Manchester United’s manager, for whoever.
But real crises are still quite rare, at least insofar as they affect the population of the affluent West, where prosperity has grown steadily amid a consistent negative drumbeat from the ubiquitous prophets of doom. In the new volatility of our times, business events that threaten prosperity arise with an increasing frequency and can still properly be called crises.
For example, at British Airways, where I worked from 1998 to 2008, there were several corporate-threatening events: the attacks of 9/11; the SARS epidemic (now largely forgotten – it was worse than 9/11 for many airlines); the 2008 financial crash, which interrupted business traffic; and the physical crash of the Concorde into a suburb of Paris in 2000.
A disaster foreseen is usually a disaster avoided – it is the unanticipated ones that are the problem. No company should spend too much money preparing for the unlikely and the unexpected (snow at Heathrow is debatable as an example), but it must at the very least have a plan to deal with the unexpected, as a general concept. No one can know in advance what shape it will take, but that should not prevent planning and rehearsal to answer certain questions generic to all such events:
– Who does what? What will be the roles of the Chairman, the Chief Executive, the CFO?
– Who will take operational charge of the issues? Who will reassure the markets?
– Who will run the Company in the meantime?
Likewise the risk of certain events can always be addressed. What happens if:
– The Head Office is blown up or flooded?
– There is a denial of service or other cyber attack?
– There is a fatal injury in a critical plant?
It is a potentially endless list, but unrehearsed means unprepared; too often we see the “nine-year-old football team” spectacle, where no one plays in position and all players crowd the goalmouth in the hope of being the one who puts the ball in the net. Even senior executives find it difficult to resist the desire to join in. Crises are exciting, discipline can be dull. Yet it is imperative that each should play to his or her own, pre-agreed positions.
So to the moral: Crises are not daily events, but in the life of corporations, they happen. The best preparation is to identify, in advance, not the precise form that the crisis will take, but who will manage it and then to ensure that such individuals know who they are and are properly practiced.