Normally, a company’s CEO would play a key role in a crisis – but not necessarily as a member of the CMT, writes Scentre group chief risk officer Eammon Cunningham
The composition of any crisis management team (CMT) and its operation are an interesting phenomenon. They are usually designed so that they shine as expected when the company is facing a dark moment. Absent of that dark moment, it will be business as usual for the enterprise.
During this business-as-usual period, any good CMT structure would undertake regular exercises. It is not just a case of exercising for the sake of it, but, rather, planning exercises where there are clear objectives in mind. During the debrief, you can demonstrate that the fundamental objectives were met.
So, back to the question of the role of the chief executive in the CMT during a period of crisis. Best practice suggests that while the chief executive will have a key role to play, it would not be in the context of being the leader, or even a member, of the CMT.
The CMT should not be viewed as a substitute for the normal managerial organisational structure functioning within an enterprise; rather, it is simply an important aid to that structure when a crisis looms. Once activated, the CMT chair should report directly to the chief executive. This structure gives the chief executive a greater ability to manage his/her time when time itself is a very precious commodity in the middle of a crisis.
The time-consuming CMT work that can be done without the chief executive’s constant and direct involvement includes:
• identifying and activating information sources;
• gathering, verifying and evaluating data;
• assessing possible impacts;
• developing alternative courses of action; and • forming recommendations.
All chief executives expect to be kept up-to-date, with this being a particular imperative as a crisis is unfolding. As such, the CMT chair should interact with the chief executive and provide periodic updates on either a predetermined frequency, as key events unfold, or as circumstances otherwise warrant.
Ultimately, the goal is to provide the chief executive, in a concise manner, with relevant commentary on deliberations, details of alternative courses of action and a recommendation. The chief executive can then make a determination and give the head of the CMT the authority to proceed. At this juncture, the CMT would invariably use the normal organisational structure to action the decisions throughout the enterprise. This interaction with the chief executive may be repeated a number of times depending upon the nature of the crisis.
The position described above relates to significant decisions where chief executive-level authority is required, otherwise the chair of the CMT would activate responses through the normal organisational hierarchy. The above structure assists a ‘time-poor’ chief executive in the midst of a crisis to focus not only on relevant information and potential outcomes, but other matters related to the crisis, such as communications with key stakeholders.
Not having the chief executive in the room during this process facilitates greater discussion and debate. More views should produce better solutions. If your chief executive has a particularly strong or overbearing personal style, this approach also avoids conversations being potentially stifled.
My personal view is that enlightened chief executives (which I am accustomed to) get this and let the CMT get on with the job they were selected for and trained to do.