To clarify the definition of a crisis, it’s an intense difficulty, trouble, or danger that can either happen imminently or slowly. Most of the imminent crisis that happen are not preventable and are beyond the control of leadership (James., Wooten. 2005). An example of an imminent crisis would be a malfunction within a commercial airplane that crashes causing numerous deaths. The regular check ups were done on the aircraft but it was a manufacturing defect that happened.
If a company that is known nationwide had a crisis such as the example given and they didn’t have a generated plan on how to effectively handle the crisis it can jeopardize the organizations reputations and causing to lose millions in revenues (James., Wooten. 2005). In order to prevent such monetary loses an organization must have an open mind and be prepared for the unexpected, rather than having a closed mind assuming they’ll be lucky enough to not undergo such a crisis.
A smoldering crisis is a type of crisis that is preventable and can easily be thrown of proportion due to manager negligence. During smoldering crisis, the person to blame is unquestionably the leadership. An example of this type of crisis is a whistle blower at a U.S Veterans Administration hospital. An employee was terminated and was premeditating a way to retaliate. She decided to file numerous federal complaints at a variety of different federal offices (IABC. n.d). Her file was further researched which increased to a civil action against the company, a year later a settlement was reached. Long story short the VA Hospital failed to do a technical step in the delivery of finished glasses and were found in violation of their contract, which they were penalized with 3.25 million. The ex-employee that initiated the file received a percentage of the settlement (IABC. n.d).
I’m currently employed at a call center and we talk and receive in bound calls from customer that are starting claims within their manufacturing warranty. An example of a sudden crisis when we have a total system outage whether it be caused by weather conditions or just simply the system went down. This is an example of a sudden crisis because it something that is not preventable and beyond the control of leadership. System outage results in loss of productivity and the associated workplace chaos was not blamed of the leaders of the affected firms (James., Wooten. 2005).
An example of a smoldering crisis is when our company failed to do a background check on an employee and come to find out that employee had a warrant for his arrest for distribution of child pornography. Mug shots were being publicizes in social media and the reputations of our business was affected because they failed to follow protocol during the hiring process. This is still haunting the company till todays date because you can hear people speaking about it from time to time, keep in mind this was roughly 3 years ago.
During times of crisis it’s difficult to stay composed and to make effective decisions. When faced with a crisis its beneficial to have a plan generated on how the crisis will be properly handled. A good plan would be the ones developed by Erika James & Lynn Wooten. The five phases of crisis that require specific crisis leadership competencies is signal detection, preparation & prevention, containment and damage control, business recovery, and learning. To further clarify the first step, signal detection, is regarding crises that fall under smoldering crises.
In other words, there are red flags that appear and that are intentionally being ignored by leadership because they have that mentality that crisis only happen to other people not them. This is why smoldering crises are leadership fault because they see the signs, they just fail to take them seriously. The second step is preparation and prevention which suggest that leadership creates a plan on how to properly handle the crisis that befalls. By doing step two leadership is mitigating a way on how to prevent crises from occurring but if it does happen its easily able to be controlled and diminished.
At times there is crises that happen that are beyond our control and there needs to be a plan in order to contain and control the damages being done to the organization this is when we enter step three. The intent of step three is to limit the reputational, financial and other threats to the firm survival (James., Wooten. 2005). After minimizing the damaged done to the organizations the next step is to recover, which is step four.
The recovery phase is to begin doing business as usual and to implement both short- and long-term recovery efforts (James., Wooten. 2005). When hit by a crisis it causes a hole in the company’s pocket so by getting back to the rhythm of things, is beneficial. The last a final step is learning, which entail of educating the employees within the affected firm to be vigilant of the signs that appeared in the past crises so that leadership will implement a preparation and prevention plan to halt it (James., Wooten. 2005).
There are numerous characteristics that can be demonstrated that makes you a top leader during crisis situations such as, having the ability to shape the environment and leave behind a pattern for success. Leadership is a combination of the right knowledge, the right person or people, the right behavior and also the right actions (Hayashi,. Soo. 2012).
A good example of good leadership would be those who generate a foundation of trust within their employees. These types of leaders then utilize this foundation to prepare their organizations for difficult times, to help them contain the crises that do occur and to leverage crisis situations as a means for creating change and ultimately a better organization (James., Wooten. 2005). An example of poor crisis leadership is during crisis there is the tendency to make decisions and actions that are oftentimes suboptimal. There shortcuts ultimately can undermine effective leadership (James., Wooten. 2005).
