Four rules of crisis management

  • Columns
  • Monday, 14 Sep 2015


Nothing speaks to one’s leadership qualities, or lack of, than the way one reacts to a full-blown crisis.

I seldom wax poetic, but the magnificent opening lines of Rudyard Kipling’s poem If resonates with me deeply, especially during tough times:

If you can keep your head when all about youAre losing theirs and blaming it on you.

I doubt that it occurred to Kipling back in 1895 that this would be the perfect introduction to a discussion on crisis management, but it does describe the best reaction for a leader faced with turmoil.

Today, the test of a company’s leadership, and of a CEO in particular, usually comes during a crisis. Whether the upheaval is due to financial difficulties, a scandal or an accident, the chief executive and his senior staff have to lead the company through the crisis and try to assess and mitigate the potential for long-term damage.

I’ve been in the transportation business for over three decades now – Virgin companies move millions of passengers a year. In that time, I have been faced with two crises that resulted in the loss of life, which shook all of us badly.

The first was in 2007, when a Virgin Trains derailment led to the death of an elderly woman on a train in England. The second was Scaled Composites’ incident in California last year when they were testing a spacecraft for Virgin Galactic. SpaceShipTwo, which was being tested and developed for future commercial use for regular people, broke up shortly after launch, killing the co-pilot.In both cases, I was in another country at the time of the accident.

In 2007, I was in Switzerland when I got the news of the derailment, and there was a particularly nasty snowstorm blowing through. Last year I was at home on Necker Island in the British Virgin Islands when the spacecraft broke apart.

My response to both crises was identical: Repeating that opening line from Kipling’s If under my breath, I raced to the scene as quickly as I could.The director Woody Allen once famously commented that 80% of life is simply showing up. Indeed, when the chips are down and your company is about to make headlines for the wrong reasons, there is nothing more important for a CEO than being present.

As I see it, going to the scene of the disaster is essential. You need to take ownership of the situation. And, more importantly, you need to be on hand to demonstrate your support for everyone involved.

Simply getting there as quickly as possible is rule No 1 in dealing with a crisis.

Once you’re there, rule No 2 is to demonstrate that you are taking control of your company’s response to the situation. As a leader, your responsibility is to communicate, communicate, communicate – even if only to explain that there is little information available.

For instance, after the Virgin Trains derailment, Britain’s Rail Accident Investigation Branch immediately stepped in and took charge of the investigation. When I arrived at the site, my role was to comfort frightened passengers, express gratitude to our staff and the volunteers for their work, and assure everyone that we would emerge stronger.

Rule No 3: Remember to be yourself, in even the most difficult of situations.

When AirAsia Flight 8501, en route to Singapore from Indonesia, crashed into the Java Sea in late 2014, AirAsia CEO Tony Fernandes didn’t hide in his office. He guided his business and employees through the crisis in his own inimitable way, as a family man and strong leader.

He reached out to the families of those lost in the tragedy, and he demonstrated a sense of perseverance by pushing forward through the company’s darkest days.

Rule No 4 is to maintain your calm, which can sometime seem impossible during a prolonged period of upheaval.

When the financial crisis hit the global economy in 2008, many institutions found themselves in trouble. Jayne-Anne Gadhia, Virgin Money’s CEO, adeptly identified opportunities amid the challenges, and managed to rally her team to grow the business further.

She led Virgin Money to a successful initial public offering last year.In If, Kipling also wrote:If you can meet with Triumph and DisasterAnd treat those two impostors just the same.

He was probably not talking about the corporate world. Nevertheless, an executive’s ability to lead his or her company during the bad times as well as the good shows why only a few executives deserve to have the word “chief” in their title. – Distributed by The New York Times Syndicate

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