The interview with Uwe Rühl first appeared in the getAbstract journal. Personal-Financial.com publishes an abridged version here, the full interview can be found here. Getabstract and Personal-Financial.com are cooperating on the occasion of the getAbstract International Book Award 2020, for which Uwe Rühl is nominated with his book “Unternehmerische Resilienz”.
Mr. Rühl, what are the three most important rules for crisis management in companies?
UWE RÜHL: First: You have to define what your company understands as a “crisis”. From the world of blue light I know: you don’t “slide” into a disaster, a disaster is “explained”. Because: Situations cannot be controlled if there is no agreement on the situation. Just as a disaster or special situation is declared in control centers, a crisis must also be declared bindingly in companies.
How does that work in detail?
I take a conscious look at what the situation looks like and why nothing can be done with the usual management tools in this situation – and I declare a crisis. In the corporate context, this also includes a definition of when and under what circumstances the crisis will end again. The corona crisis is a prime example of this: When do I end a corona crisis board, as many companies introduced in February or March 2020? This may vary from company to company, but you have to define that it can be managed under certain circumstances and who should decide about it. Explaining a crisis is often easier than ending it.
Now you haven’t said anything about coping.
To do this, you have to follow the second rule of business crisis management: find crisis craftsmen in your own company, bring them together as early as possible, and listen to them. Crisis management is nothing more than a craft, and you do not become a craftsman when you have mastered the theory, but when you have managed crises yourself. That is why the company management would do well to identify the crisis workers in their own company long before an emergency occurs: volunteer fire fighters, people with military experience or former employees of the technical relief organization. In the event of a crisis, these crisis workers must be able to check and evaluate the information that is available, assess and communicate a situation, and give recommendations on how to react.
How does that concrete look?
Like the so-called disaster control staff in the blue-light world: there is a “sifter” that checks incoming reports. There is someone who looks at the situation on site and makes the situation easy to understand for everyone. There is someone who maintains contact with the emergency teams involved and who deals with the situation, etc. Transferred to the economic context: there should be clearly divided crisis management functions, and in an emergency these crisis workers should then know exactly what their tasks are and what not – and how long they are needed.
That means: The popular “disaster control plans” are all well and good, but is it actually more important to have a well-positioned team that knows how to act in an emergency?
Yes. You just can’t plan everything. And catastrophes are catastrophes because you didn’t have them – or couldn’t have – beforehand. You happen! No matter how well you think you are prepared. And then, in the event of an emergency, the craftsmen will help you. Because they don’t panic and act. Structurally, disasters and their coping mechanisms are not that different, even if everyone believes that everything is different or new. Therefore: practice, practice, practice! This is my third rule for successful crisis management in companies.
How do you “practice” a crisis? And: how do you find time for it in everyday work?
Good point. Practicing is annoying because it takes time and energy. This is no different in companies than in the voluntary fire brigade. But they are part of it. Not three times a week, but more often than every three years. And of course the whole company doesn’t have to be involved! If the crisis workers get together once a quarter, rehearse processes and test each other – that is, think up a scenario and react according to their roles – that’s enough. Processes are everything! Therefore, the following also applies: Each of these crisis tradesman positions should be filled three times. If one person is absent due to illness and another is on vacation, you have at least a third party on hand who knows his responsibilities. If his position cannot be filled in an emergency, the risk increases that the flow of information will seep away and the chaos will only increase.
These crisis workers then support and relieve the entrepreneurial management team in making decisions. But what if the CEO thinks he knows best himself?
When it comes to hierarchies, it helps to define responsibilities and authorities in advance. If a manager sees the point of a new crisis management system, they should also be able to see that the crisis craftsmen have more powers than many other decision-makers in the company in case of doubt – and a CEO who is convinced of his craftsmen will then also make decisions in harmony with them . It also helps if the management of the crisis team is transferred to someone who is also part of the company’s economic management team. This ensures that parts of the company that are not affected by a crisis remain unmolested by the management of the same – and that departments that are particularly affected are involved. A data protection incident with a major public impact, for example, needs different decision-makers in the crisis team than the corona pandemic.
Do you know companies that following these three rules also helped to cope with the current corona crisis?
A lot. A large German corporation that I advise has set up a crisis team with precisely the basic functions just mentioned, and is currently using it to control how to react to the pandemic. After an initially strong expansion of the staff, when more and more travel warnings were issued and the first closings of schools, companies, districts or regions in Asia became known, the group is currently in the process of reducing the staff a little, as some of the goals it with the crisis management wanted to achieve are achieved. In some parts of the company, the crisis is no longer a “crisis” as defined. Another company that is active in the travel industry and whose economic situation has noticeably deteriorated, however, is currently expanding its staff – as initial assumptions about the recovery of the situation have not been confirmed. Now an extended crisis management is required there. However: Right at the beginning of the crisis, the staff began to run through different scenarios for the course of the crisis. As a result, the company now has several options for action that did not need to be developed when things got worse. Thinking in terms of options not only saves valuable time, it also makes companies more resilient – even if the crisis situation worsens.
Michael Wiederstein is Senior Editor at GetAbstract