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Fix It! - Managing a crisis is managing change.indd 1 16.11.2006 12:47:30

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“Good insight [...] Well structured [...] Well researched.”

“Without exaggeration it is in fact quite a feat to transform such a hot issue as crisis management into a series of instructions not more complicated

than the instructions on a soup can!”

“Wri�en in a very approachable way – not too long-winded, but enough detail to make issues clear.”


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COPYRIGHT © 2006 BY

Erich Nielsen

PUBLISHED BY

nielsenandcompany.com ltd95 Wilton Road, Suite 3London SW1V 1BZUnited Kingdommailto:[email protected]

VISIT OUR WEB SITE AT

www.nielsenandcompany.com

ISBN-13: 978-0-9554713-0-8ISBN-10: [email protected]


mailto:[email protected]

www.nielsenandcompany.com

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User Agreement

You agree to not commit any form of piracy with the contents of this book. Piracy is the unauthorized taking, copying, sharing, duplica-tion, distribution or use of copyrighted materials without permis-

sion to a third party for a fee or for free.

If you need copies for distribution to e.g. a management group, please consider ordering customized prints of this book. Contact

[email protected] for further information.


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Contents

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Contents .....................................Locus of Control ........................What, Who and Why ................Introduction .............................

PART I - Preparations ............What You Are ...........................1. The Brand .............................

1.1 Current Status .................1.2 Business Idea ..................1.3 Core Values .....................1.4 Vision and Mission ........1.5 Positioning ......................1.6 Identity ............................1.7 Visualization ...................1.8 Pro- or Reactive ..............Summary ...............................

What You Can ..........................2. The Organization ................

2.1 Structure ..........................2.2 Decisions .........................2.3 Leadership ......................2.4 Extended Organization..Summary ...............................

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What You Do ..........................3. The Output .........................

3.1 Organization Support..3.2 Brand Support ..............Summary .............................

4. The Ethical Priorities ........

PART II - The Sequence ....... Introduction ........................... 5. The Situation .....................

5.1 The Context ................... 5.2 The Specifics .................. 5.3 Done ...............................

6. The Reaction ......................6.1 Reaction’s Nature ......... 6.2 Map the Reaction ......... 6.3 Done ...............................

7. The Measures .....................7.1 Task-oriented ................ 7.2 Relationship-oriented... 7.3 Decide ............................ 7.4 Done ...............................


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100101103106111

112

8. The Change ......................... 8.1 Enter: The Heroes .........

8.2 Change What?............... 8.3 Execute ..........................8.4 Done ...............................

Summary ................................

APPENDICES ........................A: Mapping the Brand ..........B: Mapping the Organization .........................C: Mapping the Sequence .....D: Press ...................................E: Fix It! Online .....................Acknowledgements...............

115115

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Locus of Control

To solve a crisis or a change in a company, you need to be in control. You need internal locus of control.

The locus of control is a concept in psychology, originally developed by Julian Ro�er in the 1950s.

People tend to ascribe their chances of future successes or failures either to internal or external causes. Persons with an internal locus of control see

themselves as responsible for the outcomes of their own actions. [...] Some-one with an external locus of control, on the other hand, sees environmental causes and situational factors as being more important than internal ones.

These individuals would be more likely to see luck rather than effort as determining whether they succeed or fail in the future, and are more likely

to view themselves as the victim in any given situation.

HTTP://EN.WIKIPEDIA.ORG/WIKI/LOCUS_OF_CONTROL


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What, Who and Why

What Is This Book? This book presents a method for change and crisis management as practised by the business consultants at nielsenandcompany.com. The method encompasses the productive and counter-productive factors that companies need to address in order to be prepared for any change as well as a mapping structure focusing on fixing the problem – executing the change. Although external communication such as PR may be a part of the overall picture, it is not necessarily the key ingredient. To make a sustainable change you need just as much to address the organization, the brand, the output, the extend-ed organization, the internal communication, the crisis sequence, psychological issues, finances, legal aspects, etc.

Who Should Read This? First of all the company’s operational level, as represented by the management team and/or managers of the company divisions and managers of the company’s business units. It is also recommended reading for the company’s strategic level, such as one or several of the Board Directors who may be involved in the company’s change or crisis management. By ensuring the extended organization as represented by external consultants, reads this, you will also create a common platform and terminology which will reduce the lead time for executing the change. The method can be applied by internation-al enterprises as well as by small and medium-sized companies.


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Why Should You Read It?You need to be prepared. When disaster strikes, the last thing you want to spend time on is looking for a method for fixing it. This text will give you and your organization a basic method and vocabulary which will reduce misunderstandings as well as shorten the lead time for executing the change. It is available in a variety of languag-es, and can be adapted to your company’s needs.


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Introduction

When the fat hits the fan and your company or product is involved in a crisis the company loses money. That’s the bo�om line of all company crises. But if you regain the positive a�itude the company was built around, the dark side of the crisis will lighten up.

By employing just parts of the method this book presents, you can reduce prospective $$$-losses into $$-losses. But you can do be�er. You can in fact change the short-term losses into long-term positive results when working with a comprehensive and structured method encompassing your company’s brand, organization, output and the actual crisis sequence you are facing.

This book will give you a positive and realistic a�itude towards whatever you meet. It will make it easier for you to find the solu-tions instead of merely focusing on the problems. You will get a structure that you can use before, during and a�er whatever you meet, a structure that makes it possible to produce an executable strategy. You will focus on regaining and retaining a positive and

realistic approach. You will get internal locus of control.

It’s All About Having a Positive and Realistic Attitude

All companies or products start out with a positive self-concept and an optimistic view of the future that is meant to benefit their cus-tomers as well as their stakeholders. Your company started out with a positive concept when identifying a need and how to satisfy it. The same goes for your company’s organization – the employees. When people accept employment, they always start out with a positive


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self-concept and an optimistic view of the future as well as a positive and optimistic concept of the company. Then something happens. A problem.

Much too o�en, people take a problem-oriented point-of-view. By doing so they easily lose sight of the possible solutions. Although they may know where they are going from, they have difficulties in defining where they want to go. When that happens, the problems will escalate.

If on the other hand, you take a solutions-oriented a�itude, you not only address the problem you are facing, you focus on possible solutions. You gain a positive and realistic a�itude. This gives you a be�er chance of knowing where you are coming from as well as where you are going to. You will be open to change. By le�ing this open a�itude work on all levels in the company, the organization will become filled with a positive a�itude based on realistic param-eters. As a result the employees can participate in recognizing, ac-knowledging and acting upon the problems that may be perceived as a company crisis surfacing. You will be prepared.

What Is a Crisis

For the sake of simplicity, throughout this book the word ‘crisis’ will be used to describe whatever you face. But what is a crisis?

From the individual’s point-of-view, one of the most descriptive definitions of the concept of crisis is the following:

The moment the brain stops functioning.

The cause of this is simple. In a situation that the individual feels


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is menacing or dangerous, the energy in the blood is pumped to the strongest muscles. Although many consider the brain to be the strongest muscle in the body, the body itself disagrees. Certain sec-tions of the brain switches off and rational thought disappears with instinct taking over. The experience of crisis is thus entirely subjec-tive.

For the company, this is a be�er definition:

A crisis arises when the strategies used no longer function.

The reason for the strategies not functioning is always that condi-tions have changed. We o�en forget that change is a part of life. In-dividuals, companies, and society – everything changes all the time. Sometimes the change is sudden or radical when instigated by ca-tastrophe or terror, but o�en when a crisis surfaces in a company it is a symptom of a change that hasn’t been acknowledged. A need for change can smoulder in the background, exerting a li�le pressure on the organization. As time goes by the need for change escalates, and the pressure increases. When the company management suddenly feels it is forced to take action, it – and the world around it - perceive it as a crisis. Crisis management becomes nothing else than forced change management or sudden change management. Managing a crisis is managing change.

However, a crisis can never be defined as one individual incident. It is a series of incidents - a sequence. The incidents in the sequence can have different characteristics; some can be material, whilst oth-ers are emotional. Nevertheless, the incidents merge together into an overall course or complete experience of pressure, and as one inci-dent will trigger another the crisis can be as difficult to manage, as it is difficult to map out.


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The incidents in the sequence may be sorted according to the follow-ing characterizations:

• Stressful – a stressful incident is an incident that entails deviations from normal circumstances and may create disturbances to everyday life. This creates low pressure in the company.

• Extraordinary – an extraordinary incident is an incident that deviates from normal circumstances and creates serious disturbances, or entails an imminent risk of serious disturbances, to important functions. This creates medium pressure in the company.

• Critical – a critical incident threatens fundamental operations and values or health and freedom creating high-pressure in the company.

Most crises start out with a stressful incident. Companies always have a certain level of pressure in the organization when dealing


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with day-to-day issues. A certain amount of pressure is a healthy sign as long as the pressure is dealt with. But when a company doesn’t take action, a stressful incident can smoulder and escalate creating an extraordinary event. If the organization is not prepared, the company still may not notice it. The extraordinary incident keeps on smouldering, which causes the pressure to rise even high-er. And when the pressure reaches the critical zone, the crisis is a fact.


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The Structure of the Book

This book consists of two parts and a section of appendices.

PART I shows how you and your company can gain internal locus of control by preparing and creating a well-defined brand, a clearly structured organization and control over the company output. This will help you face whatever you meet.

PART II shows how you and your company can regain internal lo-cus of control in a crisis sequence by addressing the necessary infor-mation, creating decisions and making sure of that the decisions are executed.

The appendices give you checklists and template examples to use when mapping out the brand, the organization, the output and the sequence.


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How to gain internal locus of control before it happens

PART IPreparations

To give you the tools and the inspiration to define your organization, your brand and your output with a clarity that is easy to embrace and execute on for all the company stakeholders.

Goal:

Means: Use three basic statements to map the entire com-pany:

• What you are • What you can • What you do


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What You Are

All companies or products start out with a positive self-concept.

The power of self-concept governs just as much corporate life as personal life. But in the corporate world, the self-concept is called the brand. The holistic view of the brand encompasses material values (tangible assets, such as finances and equipment) as well as immaterial values (intangible assets, such as the company’s

goodwill and values). When the brand meets the brand stakehold-ers, e.g. the organization representing it, the brand can be reinforced

in a positive or negative way. Your stakeholders are the premium source of positive reinforcement of the brand. If the stakeholders

don’t have a reflective approach reinforcing your brand, the stakeholders will tarnish it, and consequently reduce the brand

value. Symptoms of this may be high personnel turnover, decreased stock value, and reduced sales.


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