Leading in crisis: The four traps of decision making
Hesitation is not uncommon among decision makers in a crisis. Information is incomplete or contradictory and there is usually little time to wait for better solutions. This is the fourth trap of decision making: continuing to seek for solutions rather than deciding on the best available alternative, even if it carries considerable risk. Under heavy time constraints, this can even led to panic and bad decision making.
So, how does one avoid the four traps of decision making in a crisis? The first step is recognizing that these four traps exist and understanding that they are heavily influenced by time and the availability of good information. Failing to see the risks of inaction or accepting low-risk actions are both linked to a failure to recognize that a crisis is occurring and to put it into the context of the potential impact on your organization. This in turn is usually the result of failing to take the time to gather and assess information related to the crisis. Consider, for example, the classic case study on supply chain management involving Nokia and Ericsson in 2000. The crisis was precipitated by a fire in the clean room of the manufacturer of the chips used in each company’s phones. Nokia recognized and reacted to the potential crisis; Ericsson did not. The resulting losses cost Ericsson millions in lost revenue and market share and put the company into a financial crisis that lasted almost five years.
Understanding the nature of the crisis can also help avoid the bad decisions caused when considering high-risk alternatives. Knowing how much time you have to make a decision and the potential availability of alternative actions are precious commodities in a crisis. Time allows you to weigh risks versus alternatives or consult with advisors and subject matter experts. Knowing you have limited time can help you to focus on what you know and bring clarity of thought. In the case of Strong Vincent at Gettysburg, the knowledge that he had only a short time in which to act caused his decision to move without orders, an action that could have cost him his career if he failed. However, the risks of inaction far exceeded the risks of the alternative he chose.
It is easy to avoid decisions in a crisis. The four traps are always there waiting for the unwary and they all lead to the same place: failure due to non-existent or poor decision making. The hardest part of managing in crisis is having the willingness to accept responsibility for decisions made with limited information in too short a time and the courage to follow through on those decisions without second-guessing yourself. It’s what makes a leader truly effective in a crisis.
Lucien Canton, CEM is a consultant specializing in preparing managers to lead better in crisis by understanding the human factors often overlooked in crisis planning. A popular speaker and lecturer, he is the author of the best-selling "Emergency Management: Concepts and Strategies for Effective Programs." For more information, visit www.luciencanton.com, or e-mail Info@luciencanton.com.