Volunteers

Crisis Management Requires Planning

Study shows the best ways CUs can prepare for a crisis.

October 06, 2011
KEYWORDS crisis , ethics , values
/ PRINT / ShareShare / Text Size +

The effects of the 2008 financial crisis continue to reverberate throughout the credit union movement. How would your board grade itself on crisis management?

A recent study on crisis control by the Ethics Resource Center (ERC) says most issues an organization faces during times of crisis are really about corporate character and ethics, not operations. “Crisis is a test of character,” the study says. “People will want to know if you lived up to your values.”

Directors NewsletterBoards and senior executives can plan ahead so future crises pass smoothly. Five ways to prepare:

  1. Establish a team that’s prepared to uphold organizational values under a great deal of pressure. The team should make decisions with the bigger picture in mind.
  2. Be sure corporate values are appropriate, up to date, and aligned with company culture. These values will guide your corporate response.
  3. Evaluate which stakeholders are most important, recognizing that some have competing interests. Your corporate response should primarily address the most important stakeholders.
  4. Ensure employees will work with you, not against you, if a crisis occurs. Keep in mind that the availability of social media means employees’ opinions are more public than before.
  5. Understand a strong bottom line doesn’t necessarily mean a complete recovery.

Important signs of recovery include employee trust in leadership, a strong ethical culture, consumer and vendor confidence in the organization, and respect from industry peers regarding the crisis response.

Additional steps your credit union should take to prepare for a crisis, according to the ERC study:

  • Review corporate values;
  • Conduct periodic ethics training;
  • Conduct a comprehensive stakeholder review;
  • Review crisis communication plans and outline ethics-related messages;
  • Plan to be a thought leader if a crisis takes place. Learn from company mistakes and move forward; and
  • Make additional resources available in case a crisis occurs.

Above all, take responsibility for the crisis, the study advises. Ethical behavior is crucial to crisis recovery. This primarily involves being open to the truth, taking responsibility, and committing to making things right.

Ignore values at your own peril

According to the Ethics Resource Center, if your credit union ignores its values in a crisis it can expect:

• Denial—downplaying the situation or denying involvement;

• Internal chaos—lack of coordination within the company;

• Transference—blaming someone else;

• Deception—covering up what was wrong;

• Boxes—different sectors developing hardened views of right and wrong;

• Fishing—calling in people from outside;

• Silos—sectors working in isolation, leading to self-preservation; and

• Paralysis—being incapable of action.

This article originally appeared in Credit Union Directors Newsletter.

Post a comment to this story

heroes

What's Popular

Popular Stories

Recent Discussion

Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory (www.appreciationatwork.com/assess) will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

Your Say: Who should be Credit Union Magazine's 2014 CU Hero of the Year?

View Results Poll Archive