Crises Are Rarely Rooted in Single, Spontaneous Causes

In the previous activity, you considered how a trigger event could be perceived by stakeholders as a violation of contract expectations and that such violations would be evaluated to determine degrees of responsibility and severity of damage. In this activity, we’ll examine some factors that contribute to the stakeholder evaluation process. Specifically, we’ll look at the how known “opportunities for improvement” in our environments, and the extent to which stakeholders are aware of these issues, can have a significant impact on stakeholders’ assessments of an organization’s responsibility for a crisis.

There was a lot going on in that last statement. Opportunities for improvement? Known by stakeholders? Impact on stakeholder assessment of responsibility? What does all of this mean? Researchers have determined that a majority of organizational crises are NOT the product of an instantaneous, unpredictable eruption of bad fortune. Yes, events of this nature do happen – but they happen rarely. These researches go on to say that typically crises are the result of choices that are made by organizational leaders – and that these choices define what the enterprise does and what the organization doesn’t do. When stakeholders learn of specific organizational choices, they are able to determine the extent to which company decisions and values are aligned with their own. Where there is misalignment, stakeholders are more likely to assign a higher degree of responsibility to the organization when a crisis situation arises. This is, perhaps, an overly circuitous way of saying: when poor choices lead to poor outcomes, those responsible will be held to a higher standard of accountability. This is certainly a reasonable assumption. But what about the case where the choices involve decisions to not take action on issues that, in some stakeholder’s eyes, require attention and should be resolved immediately?

Earlier in this course, as you studied the importance of stakeholder relationships and their contribution to organizational resilience, it was argued that both internal and external stakeholders were very important to the anticipation stage of resilience. That both internal and external stakeholders could serve as observers for signs of trouble. What happens when these observers identify signs of trouble, report them to organizational leaders, and the reports are ignored or the actions taken by leadership are insufficient to address the raised issues? When stakeholders make an effort to report an issue and the effort is largely ignored or not given some reasonable amount of attention, a couple of very powerful messages are sent back to these stakeholders. First, that leaders don’t really value the feedback. While this may not be true, it is the perception that many stakeholders will have. Second, that leaders don’t believe the issue to be important enough to resolve. This could be perceived as either: “Thank you, but this isn’t really a big deal” or “Thank you, but we’ve got much bigger issues to deal with.” In either case, what stakeholders will perceive is a lack of attention to something they believe should be addressed. Now let’s connect the dots between stakeholder contribution to pre-crisis resilience and stakeholder evaluation of in-crisis responsibility. Some organizations do a wonderful job of engaging stakeholders when they identify an opportunity for improvement. They offer employees recognition and other rewards for their awareness and commitment to making the company better – more efficient, more effective, more profitable, more safe or secure. They also find ways to recognize other stakeholders for their contributions through discounted or free merchandise, special recognition events, and other tangible benefits, both to thank them for their commitment to making the company better, and also to inspire similar future behavior. High stakes leaders want their stakeholders to be on the lookout for threats. 

Interestingly, and this is where organizations suffer a “triple-whammy” of sorts, when stakeholders aren’t recognized or rewarded for their efforts, three things will happen. First, these stakeholders will no longer make the effort to help the company get better – or, perhaps more importantly, they will no longer be willing to serve as trusted pre-crisis observers for signs of trouble. Second, the organization misses a great opportunity to provide stakeholders with another reason to be loyal and supportive by failing to reward them for their efforts. In this missed opportunity, the company also forfeits the chance to show other stakeholders what could be theirs as well, with just a little bit of proactive effort. Third, and germane to the way stakeholders evaluate responsibility during a crisis, if stakeholders have been trying to tell a company that something is broken and needs to be fixed, and then that something grows into a crisis, these stakeholders will almost certainly assign a much greater degree of responsibility to organizational leaders.

High stakes leaders know that crises are not typically the result of rare, totally unpredictable events. Yes, these do happen, but much more frequently are crises the result of insufficient attention to early indications of trouble. When stakeholders are aware of these early indications, particularly when they have taken the time to communicate their concerns to organizational leadership, and then the issues grow into a major disruption, their evaluations of the company will be harsh and their affective responses are more likely to be emotionally charged.