The Role of the CEO in a Crisis
Recent high profile crisis events have highlighted the immense pressure and public scrutiny that CEO’s may personally face during a crisis, raising questions on The Role of the CEO during a Crisis
Media reporting and senate inquiries have amplified the scrutiny on decision-making within organisations by customers, regulators, and the public. CEOs, executive leaders and some board members are now expected to be accountable for every decision made during a crisis and those leading into a crisis.
Challenges during a crisis
During a crisis, decisions may need to be made with incomplete or conflicting information, within compressed timeframes and where there are significant cascading impacts. For some organisations, decisions may be life critical.
Cyber related crisis events may present additional challenges for CEOs as they involve higher levels of technical complexity and greater dependencies on critical third parties.
Australian CEO challenges
Australia’s corporate leaders say a cyber-attack is the single biggest external threat to the running of their businesses in response to a question about what keeps chief executives up at night as part of The Australian’s 2024 CEO Survey.
No matter how prepared they think their business is, the chief executives believe a risk of a crippling attack is real and have highlighted how little control they have as it can unknowingly come from anyone, they do business with”. Eric Johnston, Associate Editor, The Australian.
While cyber related risks have brought crisis management capability into sharper focus, a cyber-attack is only one operational risk that could lead to a crisis.
Critical thinking skills
The ability to come together with limited warning and to make high quality decisions with incomplete or conflicting information, relies on critical thinking skills.
CEOs, senior leaders, and those operating in high-risk industries have typically honed these skills through experience and can apply these skills intuitively to most situations.
Whilst the CEO has a crucial role to play in preventing and responding to a crisis, large organisations operating in crisis mode may have several teams involved, including members of the board, the crisis management team, crisis communications team, (cyber) incident and emergency teams and technical specialists. In some instances, board members may be involved.
The inherent complexity and potential impacts of a crisis mean that a successful response is unlikely to be achieved by the skills or experience of any one single person. Success is dependent on the critical thinking skills of all members of all teams involved.
Post Incident Review findings
The importance of critical thinking can be found in Post Incident Reviews (PIRs). PIRs for crisis events not managed well, reveal a common thread of the underlying issue or contributing factors being poor decision making (leading to poor communication) and a lack of critical thinking.
There are times when individuals or teams go through ‘critical decision points’ and failing to successfully navigate through critical decisions can put an organisation on the trajectory towards a crisis, rather than de-escalating the situation.
In some instances, an escalating crisis can be pinpointed to a single bad decision or the accumulation of poor decisions, prior to the crisis occurring or during the crisis. Certain decisions may be life critical.
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Enabling high quality decision-making
An effective crisis response is achieved when there is consistent, robust, transparent, and high-quality decision-making occurring within and between all teams that have been activated.
Responding teams should have the tools and training to confidently pivot from business as usual (BAU) into crisis mode efficiently and seamlessly. Leaders should assemble the right people for the situation by drawing upon the brains trust of the organisation.
Whilst the crisis chair is primarily responsible for leading the team through the decision-making process, all members of all teams activated are responsible for applying their critical thinking skills to ensure high-quality decision-making is occurring.
Teams can demonstrate high-quality decision-making by verifying information, separating facts and assumptions, and identifying immediate actions, including critical communications. Teams should have the skills to synthesize and distil information and recognise the trajectory the crisis could take by building a common operating picture and understanding the impacts.
Teams should reach consensus on key priorities, actions and critical decisions, including those related to crisis communications with all identified stakeholders.
Crisis communications
Effective communication during a crisis is the output of good decision-making.
‘Best practice’ communications during a crisis, is the use of a Situation Report (Sitrep). The Sitrep is used to record crucial information; provide a common operating picture; identify risks and decision that have been made and those that need to be made. The Sitrep is used to brief teams internally and externally to provide accurate, consistent, and rapid crisis communications.
The Sitrep is used align the crisis response strategy with the crisis communications strategy by confirming ‘what, when and how’ key messages will be delivered to all key stakeholders.
Crisis communications capability should include pre-agreed strategies and several media trained spokespeople who can respond to a range of potential risks and threats.
Embedding a unified decision-making framework
During BAU, CEOs are reliant on the skills and experiences of people at all levels within the organisation and this should be the same during a crisis.
Teams who respond to a crisis should have access to a unified process that allows them to ‘step through’ key steps that enable team-based critical thinking. The process should be predictable, repeatable, and effective, even when there is incomplete or conflicting information.
The CEO may decide to ‘step into’ the Crisis Chair role for a period or may decide to become a key media spokesperson, at times during the crisis.
Regardless of the role that the CEO chooses to undertake, all key roles should be fulfilled by leaders who have the critical thinking skills, processes and training required to respond.
CEOs should provide assurance to the board, regulators and other key stakeholders, that activated teams have the capability to manage the strategic requirements of a crisis, including crisis communications.
CEOs should resist applying their intuitive skills solely to the immediate operational challenges of a crisis and to trust that teams have the processes, skills and training to respond.
An organisation may have a clear strategy, exhaustive risk management processes, detailed plans, and highly skilled individuals but if teams come together – under pressure, crisis or significant change – and are unable to demonstrate ‘critical thinking’, they may not be effective in managing the situation or seeing the opportunities”.
Executive Leader, Aviation
What can leaders do to prepare for a crisis?
Leaders can prepare their organisation by:
- Embedding a simple, intuitive, and unified decision-making framework that enables team-based critical thinking to occur across and within all teams activated including the board, executive, crisis, incident, emergency, communications and technical (cyber) response teams and; for all types of risks the organisation may face.
- Utilising a situation report (Sitrep) format to ensure crisis communication is efficient and effective between teams internally and in developing external messages.
- Conducting scenario-based activities using ‘catastrophic risks’ to uncover blind spots and practice using the tools for all teams who may be required to respond.
What can leaders do to uplift critical thinking skills?
Leaders can rapidly uplift critical thinking skills across their organisation by:
- Elevating high quality decision-making to ‘business critical’ and agreeing on a unified framework for all teams.
- Identifying people who need to be trained and those who already demonstrate intuitive critical thinking skills and ensuring they are trained in applying the process.
- Utilising technology to embed the framework into current ways of working to be used during BAU and more broadly across the organisation.
By developing our critical thinking capabilities, teams can better manage difficult situations and see the opportunities to execute our strategy more efficiently.”
Executive Leader, Insurance
Benefits of a unified framework across the enterprise
Organisations who embed a unified decision-making framework can gain strategic advantage by:
- Having a common language for decision-making across teams that aligns technical knowledge and executive experience.
- Improving the speed and quality of decision-making for cross-functional teams during BAU and crisis.
- Providing structure and transparency to high-quality decision-making that creates learning opportunities within and across teams.
- Developing team-based critical thinking skills to simultaneously manage risk and opportunity.
- Providing assurance to key stakeholders that ‘all reasonable steps have been taken’.
Summary
Media reporting and senate inquiries have amplified the scrutiny on decision-making by customers, regulators, and the broader community. CEOs, leadership teams and board members are now expected to be accountable for every decision made during a crisis and those leading into the crisis.
Yet, many organisations have limited visibility of how decision-making is occurring within their business and CEOs are concerned that they have ‘little control over the risks of a crippling cyber-attack as it could come from anyone, they do business with’.
Leaders can prepare their organisations for a range of potential risks by elevating high-quality decision-making to business critical, embedding a unified decision-making framework, utilising a Sitrep as a key communications tool and conducting scenario-based activities to uplift and maintain capability.
Embedding a unified process that enables team-based critical thinking provides immediate and enduring value to organisations. Teams can simultaneously manage emerging threats whilst pursuing strategic opportunities, by applying their critical thinking skills to all situations.
CEOs can provide assurance to all key stakeholders, including the board and regulators, by embedding a robust and transparent decision-making process across all levels of the organisation.
About the Janellis 7-Step process
In mid-2000 Australian leaders faced significant risks that were targeted at critical infrastructure providers and organisations operating in high-risk industries. To help leaders understand the challenges and find ways to work together to solve them, Janellis convened an industry conference which engaged more than 200 participants from private enterprise, critical infrastructure providers, government agencies and emergency services. Former Chief of the Australian Defence Force, Sir Peter Cosgrove facilitated the landmark day, and commented at the time:
Australia has some of the best men and women leaders of any country in the world who can deal with business shocks standing on their feet and they have already demonstrated this. However, the new set of challenges needs more work. Some organisations are very advanced and responsible— and there are a lot who are not. In running through the hypothetical today, we can start to imagine the dimensions to the problem.”
In working with Sir Peter Cosgrove, Janellis developed a Decision Support Tool that draws upon the rigor of military decision-making principles but designed specifically for business leaders. Since then, Janellis have trained executive teams operating in Australia, USA, Canada and India by applying the framework to scenarios designed for their regional risks and operating context.
The 7-step process enables team based critical thinking and has been embedded into organisation in industries including aviation, banking and finance, construction, education, emergency services, government, insurance, hydro, manufacturing, power, technology, transport, telecommunications, and utilities.
The framework is used by teams at all levels of the organisation including executive leadership teams, crisis management teams, incident and emergency response teams, risk teams and those responsible for complex decision-making.
Leaders across our business have been using the 7-Step process to prepare for and respond to crisis situations including COVID, cyber and emerging strategic risks. The process gives teams confidence in their capabilities and allows me to join the process when I need to be briefed or involved in key decisions.”
CEO of ASX Listed Business
For more information on the 7-Step process email info@janellis.com.au.
Why is Critical Thinking Important?
“Team-based critical thinking allows us to be both agile and robust in our decision making, drawing upon the brains trust of the organisation”
CEO
Energy Company
“Critical thinking skills are essential skills for our organisation when responding to the rapid onset of change”
Managing Director
Critical Infrastructure
“By developing our critical thinking capabilities our teams can manage cyber crises more effectively. The tool also enables us to see the opportunities to execute strategy more efficiently”
Executive Leader
Insurance
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References
[1] ASIC. 2022. Cyber risk: Be prepared. [ONLINE] Available at: https://asic.gov.au [Accessed 13.06.2023]
[2] The Business Continuity Institute. 2023. BCI Cyber Resilience Report 2023. [ONLINE] Available at www.thebci.org [Accessed on 07.03.23]
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