Originally published 12/15/16 of the Huffington Post
Those of us who study corporate crises distinguish between Crisis Prone versus Crisis Prepared individuals and organizations. Crisis Prone individuals and organizations put their primary energies into all kinds of faulty rationalizations that allow them to persist in the false belief that they will never have a crisis: “we’re too big and powerful to have major crises;” “crises only happen to others;” “if a crisis happens, someone will come to our rescue,” “there’s no need to prepare for what’ll never happen.” They are prime cases of denial writ large.
In sharp contrast, Crisis Prepared individuals are constantly probing themselves and their organizations for dangerous rationalizations that keep them from preparing for worst-case scenarios. They accept that all crises are preceded by a steady stream of early warning signals that show that a major crisis is highly likely. As a result, they do all they can to put in place specific procedures that will pick up early warning signals. In this way, they hopefully head off major crises before they actually happen, the best form of Crisis Management. Nonetheless, since even with the best of preparations crises still occur, they constantly work to improve and maintain Damage Containment mechanisms. They know that the worst time to set up Damage Containment is during the heat of actual crises. As a result, they are absolutely ruthless in rooting dangerous rationalizations that prevent them from being Crisis Prepared.
My colleagues and I have shown that Crisis Prepared organizations experience significantly fewer crises, are substantially more profitable, have fewer lawsuits and injuries, and lose fewer days in resuming operations than Crisis Prone Organizations. In short, Proactive Crisis Management is not only the right ethical thing to do, but it’s good for business.
Against this backdrop, President Elect Trump fares extremely poorly. In failing to set up a true blind trust, he’s setting himself up for major political conflicts of interest. From the standpoint of Crisis Management, a blind trust is one of the major forms of Damage Containment for potential financial and personal crises. It helps ensure that one’s political office will not be used for financial gain. But then, in order to set up a blind trust, President Elect Trump would have to own up to the very real possibilities of major conflicts of interest. In a word, he would have to stop engaging in denial, which given his personality is one of the most difficult things for him to do.
Unfortunately, it doesn’t stop there. Too many of his cabinet appointments have already set off hailstorms of protest. They are sure to be embroiled in crises for years.
Trump’s constant use of Twitter is nothing but sorry form of preemptive Damage Control. Instead of heading off crises, it only exacerbates them. So do all his preposterous claims, for instance that he actually won the popular vote because of all the illegal votes that were cast for Hillary.
I expect Trump to stumble from one crisis to others again and again. (China?) Of course, none of this really matters to his base. If anything, they want him to create major crises in order to “drain the Washington swamp.” But what happens if all his promises to bring back jobs and help the middle class only end up helping him and his business cronies? Do we really expect the case of Carrier to be easily replicated?
Are we prepared to confront the crisis when so many downtrodden workers realized that they have been royally betrayed?