Two Common Mistakes in Crisis Management

“Let us never negotiate out of fear. But let us never fear to negotiate” John F. Kennedy.

Today we’re going to be unpacking crisis negotiation, and more specifically, two of the most potentially dangerous - yet commonly practiced - behaviours while navigating through difficult waters, through the eyes of business academic and Dean of the Pardee School of Global Studies at Boston University, Adil Najam. In a recently published piece, Najam writes that the recent events and downward spiral of the world’s economy has caused many to panic, and has “heighten[ed] the need for people to debate and decide on potential solutions together.”

“During a negotiation, it would be wise not to take anything personally. If you leave personalities out of it, you will be able to see opportunities more objectively.” Brian Koslow

The problem remaining, however, is that decision making when times are stable is a difficult enough feat in itself. Combining this with uncertainty, panic, irrationality, short-term thinking and emotionally-driven decision making is a recipe for disaster- so let’s cover the two most common mistakes made by C-level executives and small business owners alike when it comes to navigating through a crisis, and propose some ways in which you can make more calculated decisions in your operations.

“The best move you can make in negotiation is to think of an incentive the other person hasn’t even thought of- and then meet it” Eli Broad.

The author argues that there are two important “traps” that small business owners and management at larger organisations will likely fall into as they attempt to navigate over the next few months. The first, Najam argues is moving from definitive to contingent measures, stating that “time warps in all crises, but during panics it tends to be counted in moments; thinking beyond the immediate can feel outright vulgar,” he says. “Once I am convinced that a crisis is existential, I concentrate entirely on securing the immediate… timeliness of action is paramount, especially in a crisis like COVID-19 wher precaution and early measures can make all the difference.” He then goes on to explain that Robert Axelrod’s notion of the ‘shadow of the future’, by which we measure the impact of our decisions in the future is part and parcel of normal negotiating advice.

He then goes on to contradict this advice, stating that “a crisis is as terrible as any to ignore the long term. Coronavirus will eventually recede,” he says, adding that “interim decisions that ignore medium-and long-term implications can leave institutions unprepared, and sometimes impaired for return to post-crisis normalcy.” His fix, then, is for small business operators and executive management alike not to be forced into choosing between the immediate and the long-term when it comes to decision making and crisis navigation. Rather, he suggests that Lawrence Susskind’s ‘contingent measures’ is a strategy that can help you in this process.

Najam cites the example of a school board member, deciding on whether or not to move to an online format for classes in the name of health and safety concerns for staff, students and their immediate families, putting the concept of contingent measures into action. “If it is looking like a short lockout, maybe you close school for a week with homework. If it goes beyond two weeks, you gear up for remote teaching. If longer, you plan for remote exams and full-scale online classes. As you’re weighing each of these moves, think about the short and long-term implications,” also stating the importance of having preparatory measures in place for each stage of the process.

Next up on Najam’s traps is the failure to move toward collaborative decision-making, which he contrasts between the BATNA - the best alternative to a negotiated agreement - concept with WATNA - the worst alternative to a negotiated agreement. At times like this, management teams are looking at problem solving through the lens of the worst alternative, so their decision making minimises risks and attempts to avoid the “catastrophic loss” that Najam writes about.

This isn’t, according to the author, the way that objective decision making should take place. “Once the framework moves to concentrating on the worst that can happen, anxiety sets in, and our usual habits of negotiation can seem useless,” he says. “The problem is compounded because our negotiation habits tend to be so deep-seated in an inability to retort to familiar frameworks can trigger discomfort and breed doubt and distrust in the intent of others.”

Najam suggests that moving to a means of collaborative decision making can help mitigate the fear, distrust and anxiety. The term was first coined by Howard Raiffa, who wrote that approaching a negotiation “with full, open, truthful exchanges” can seem idealistic, but is actually the most realistic means of approaching a tough conversation. “The situation is already stressful; adding doubt, distrust and distance does not help anyone… we must continue to focus together on maximising gains,” Najam writes.

Even in the most uneventful of days, emotion can cloud our judgement and lead us down an unproductive, potentially dangerous path. These two strategies are attempting to leverage different parts of the human brain to extract the most value out of a crisis negotiation in a panic-prone environment.

I’ll be continuing this thread of content in the weeks to come, as we explore ways in which we can exercise some of the guiding principles in business to help you navigate these particularly rough economic waters.

For now, thank you for your time, and good luck.

Kobi Simmat, Director & CEO of the Best Practice Group.

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