As a corporate crisis unfolds, a normally communicative, competent manager suddenly seems incapable of making a decision. “Too risky,” he snaps whenever someone suggests a course of action that varies from standard practice.
Another manager focuses with laser intensity on one specific problem while ignoring the larger threats cropping up all around, or insists on approaches that soothe immediate fears but may pose greater long-term harm than good.
A universal email from the top floor, urging calm and downplaying the crisis, only intensifies the rumors and uneasiness spreading on every floor. Absent hard information, employees connect real and imaginary dots to create patterns of conspiracy and doom. Each department, meanwhile, retreats into the perceived safety of its own silo. Accounting protects its back against purchasing, which insists that the fault actually lies with those in marketing.
The following commentary is excerpted from the book, The Communicators: Leadership in the Age of Crisis, by Richard S. Levick and Charles Slack (Watershed Press, 2010).
Any leader who has spent much time in a corporate environment knows the frustration of trying to erase counterproductive behaviors that trap people under pressure and that clearly undermine the company’s best interests. Additionally frustrating is that these behaviors seem so stubbornly resistant to change. Coaching, cajoling, and reassurances all yield the same indifferent results as the very next crisis typically triggers the usual responses.
Many of us simply ascribe such repetitive fear responses to intellectual weakness or illogic, but neuroscientists are now coming up with an entirely different story. If their hypotheses are correct – and they’re pretty persuasive to our laity ears – the enemy is far more imposing than individual personality deficiencies, which are still correctable albeit persistently stubborn.
Scott Huettel, Ph.D., a neuroscientist at Duke University, is part of a growing field of “neuroeconomists” who believe that what, in a modern setting, seems to be illogical responses may, in fact, result from very logical, precise brain systems designed for self-protection in an immediately dangerous world. We look at the Darwinian challenges of predatory hunting and shelter-seeking from the elements as prehistorically ancestral. In fact, a mere eye blink separates us from the ancient evolutionary struggles.
“We have evolved to respond to threats that are very personal, that are social in nature, that are well-defined, and have relatively immediate consequences,” says Huettel, Director of Duke’s Center for Neuroeconomic Studies. In antediluvian eras, “you didn’t have technology. You didn’t have planning for years in the future. You didn’t have reasoning about abstract concepts, or people disconnected from their local communities and interacting with people they’ve never met.
“In the modern corporate world, the real challenges are abstract,” explains Huettel. “They may not be directed at us, personally. Even so, while the sources of fear are very different from those in our evolutionary history, the mechanisms that we have for dealing with them are essentially the same” [our emphasis].
For corporate leaders, such atavisms are of more than theoretical significance. While industrial psychologists deal almost exclusively with observable behavior, neuroscientists study the brain’s hard-wiring, the electrical impulses that fire when we are excited into thought or action. Neuroeconomics is devoted to studying these brain functions in order to understand why and how we make our decisions, particularly under stress. At Duke, Huettel and his associates ask their subjects to play card games involving risk decisions, or they ask them to make decisions while measuring their brain patterns with functional magnetic resonance imaging (fMRI). These fMRIs allow the different brain areas to be monitored as they respond to decisions and stresses.
Of course, people are infinitely complex, no behaviors are absolute, and neuroeconomics is in its infancy. And, some people do indeed overcome panic during a crisis and are able to keep the long-term interest of the company in mind. However, Huettel believes that these exceptions, if anything, prove the rule.
“The absolute key thing to keep in mind is that these sorts of biases are very resistant to willful change,” Huettel says. “Simply thinking that, because we’re aware of them, we’re going to turn them off is probably misguided.
“A better solution is to set up decision situations or even corporate institutions that prevent these sorts of biases from taking shape and taking hold,” advises Huettel. As a leadership goal, “you want to put people in situations where they will make better decisions” as well as manage situations where you can reduce – reduce, because you cannot ultimately eliminate – the effects of the instinctual fear mechanisms.
For example:
Offer facts rather than bromides. An internal crisis communications strategy based on general reassurances is doomed from the outset. No matter how many ways you find to say, “Don’t worry,” everyone will worry. We are wired to process threats in terms of our personal, immediate survival, Huettel points out. We are all therefore inclined to personalize any crisis, even a crisis involving a company-wide issue that doesn’t directly involve our own department. In the absence of specifics, the staff will create a story to fill in the blanks, probably magnifying the dangers in the process. They will quickly replace initiatives to save the company with actions to save themselves.
Leadership action: “Offer information in such a way that it encourages employees to appraise the problem in terms that aren’t so emotionally evocative,” advises Huettel. “Instead of sugar-coating a dangerous problem, you might say, ‘Right now our company is in turmoil. But here is what we’re doing, and here is how we stand compared with our peers. The consequences may impact our stock price, but we expect to save jobs.’”
Recognize where patterns exist – and don’t exist. The ability to respond to observable natural patterns – the behavior of animals, weather changes, food availability – has been indispensible to our survival, which is precisely why neuroeconomists believe that the identification of patterns is part of our hard wiring. Applied to more abstract situations, however, this hard wiring can make us see patterns where they don’t exist.
In Huettel’s laboratory, for example, test subjects stubbornly indentify patterns in cards dealt to them at random. In the outside world, imagined patterns in the ups and downs of stocks and bonds lead hopeful investors to “time” the markets no more intelligently than bettors assure themselves they can divine the next winner at Churchill Downs.
During a corporate crisis, pattern identification can be useful, say, in identifying the root cause of a technical problem, finding which departments or individuals may be contributing to the crisis, or anticipating the next moves of an adversary or competitor. But keep in mind that these observations create hypotheses, not conclusions. Responding before testing may only worsen the crisis at hand.
Leadership action: Encourage your advisers to identify all potentially relevant behavioral patterns they see within the organization as the critical situation develops. “But once people find the cause, you want to have ways of testing with hard data before relying on hunches,” Huettel says. “You want to take advantage of the human mind’s ability to find patterns, but also recognize that we have a lot of false positives.”
During crises, for example, one might naturally expect the company’s legal advisors to be overly cautious. It’s a pattern supported by stereotype and assumption, but is it supported by facts? Does the legal department’s past behavior actually suggest excessive caution or not? In this example, it is essential for leaders to know whether the presumed pattern actually exists if they are to properly evaluate whatever counsel the lawyers provide in the current crisis.
Fight the fixations. Surviving perilous situations requires identifying and acting on the most pressing threat. When you’re struggling too far out in the surf, every thought and act is aimed at getting back to shore as quickly as possible. No matter how complex a crisis may be, our natural tendency is to simplify it; that is, to put it into terms that can define a direct and immediate response.
“In crisis, we fixate so much on one way of solving problems and looking at things that we miss other avenues and don’t ever achieve the optimal solution,” Huettel says.
As a result, some employees will focus on one problem to the exclusion of others, over-rely on established process, or avoid venturing creative decisions that entail risk. Even a swimmer too far off shore may have multiple solutions if, say, back-floating with the tide will work when strenuous exertion won’t. In a business situation, the potential for alternative solutions is all the richer.
Committees don’t generally increase the number of options at hand. Quite to the contrary, they tend to reinforce, rather than neutralize, organizational fixations. “Groups don’t always make the best decisions,” Huettel says. “Individuals who have similar biases can actually lead to worse overall decisions than individuals might [reach] on their own,” since the power of numbers only tends to sanctify and concretize a bad decision, making it that much harder to overturn.
Leadership action: the tendency towards fixation, by individuals and groups, speaks directly to the need for checks and balances within an organization; in other words, concrete procedural systems for reviewing decisions and questioning long-held beliefs. “You’ve got to create a culture in which assumptions are questioned regularly,” Huettel says.
Such a culture can only be created during peacetime, during those periods when the company is not facing a crisis. Once a crisis occurs, it’s obviously way too late to set up a review system to qualify the very decisions that are already being made under duress.
Yet even beyond such practical reasons for acting early, when the seas are relatively mild, there are fundamentally qualitative reasons to do so, based on how the human brain itself responds to crises and works toward ways to best manage them. “When you look closely at the brain circuitry, there are certain areas that become more active when we are not immediately under stress. These areas involve creative, unconstrained thought,” says Huettel.
“When we’re facing a crisis, we don’t tend to engage in that type of thinking. That can have negative consequences. In crisis, we sacrifice the big picture in order to focus on the here and now.”
Peacetime is Big Picture Time. Don’t waste it.
Richard S. Levick, Esq., is the president and chief executive officer of Levick Strategic Communications, a crisis and public affairs communications firm. He is the co-author of The Communicators: Leadership in the Age of Crisis and Stop the Presses: The Crisis & Litigation PR Desk Reference, and writes for Bulletproofblog. Levick is on the prestigious list of “The 100 Most Influential People in the Boardroom,” which is compiled by NACD Directorship magazine. Reach him at rlevick@levick.com.