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Trigger Events and the Precipitation of Crisis

Trigger Events and the Precipitation of Crisis
The reading we’ve just completed provides a pretty thorough description of how stakeholders process the impact of what the authors call a trigger event. In this course we’ll broadly refer to our crisis at hand as the trigger event. But to truly understand the nature and impact of a trigger event, we need to think about the perception of each stakeholder group, and the extent to which the crisis is impacting their value proposition with the organization. Given what we’ve explored so far, as we now have a much greater appreciation for the interests of each specific stakeholder group, the notion of considering perspectives of a particular stakeholder shouldn’t be a surprise.
For a given crisis scenario, each of our stakeholders will be viewing the trigger event in a unique way. This trigger event, according to researchers, produces what is perceived as a violation of contract expectations. What does that mean? For our purposes here, as we’re considering how our stakeholders will perceive a threat to their value proposition, let’s think of the relationship between stakeholders and an organization as a psychological contract. Yes, in many cases there will be written or formal contracts between stakeholders and an enterprise, and in cases where terms of a formal contract to appear to have been violated, there are legal remedies to address these claims. That’s not what we’re talking about here.
In our model, we’re dealing with cases where there is no formal written contract. And even if there are some formal terms on some levels, such as the contract of carriage that you agree to, whether you know it or not, when you purchase an airline ticket, these are not processed by stakeholders as formal contracts. As high-stakes leaders, it’s most useful to think of our partnerships with stakeholders as if we’ve entered into psychological contracts with them. Informal agreements that represent the perceptions of two parties and their mutual obligations toward each other. By definition these obligations are typically informal and imprecise and they may be inferred from statements, implications or advertisements.
And again, I recognize that consumer protection laws exist to ensure the fair treatment of customers, but these are not generally well understood, nor do they tend to influence a stakeholder’s perceptions when they feel that a company has broken its promise to them. The important idea here is that stakeholders believe that once they’ve communicated their intentions to do business with a company, they perceive that they have entered into a psychological contract. A crisis, our trigger event presents a potential violation of stakeholder value expectations. In other words, the crisis has created a situation where the psychological contract has been threatened. Why is it useful to think of a crisis this way?
Because it reminds us as business leaders that a crisis doesn’t just put the future of our business at risk, but our stakeholders view the crisis as a threat to their contract with us, with our organization. I know that you’ve had experience in the past where your expectations have not been met by a business or the provider of a product or service. How did you feel when you learned that you were about to be disappointed, to be let down, to not receive something that you really expected, or wanted, or needed?
Similarly, and this is a vitally important lesson for business leaders, how do you think your stakeholders are feeling when an emerging crisis begins to suggest a threat to their value proposition with your business? How might the uncertainty and anxiety at this growing threat manifest itself in worry, frustration, expressions of anger, or demands for alternatives from some or all of your stakeholders? This is the context to remember when you begin to think about the early stages of a crisis.
You will have much to do for your company and for your team, but never forget that beyond your immediate concerns, you have a broad collection of stakeholders who are in need of support, of attention, and as much of your consideration as you can afford to give them. This module is about how stakeholders react to crises. As we continue, we’ll build on this idea that all of your organizational stakeholders, employees, customers, communities, investors, regulators, the media, even your competitors have a literal stake in your ability to manage a crisis that threatens the value they find in the relationship that each have with your enterprise.
When a crisis is looming, when a trigger event presents a tangible threat to your stakeholders’ contract expectations with your organization, the effectiveness of your efforts to engage the stakeholders, and acknowledge, then address this threat will go a long way in preserving their confidence, trust and loyalty in you, your leadership team, and your enterprise.
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High Stakes Leadership: Leading in Times of Crisis

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