Crisis management: A survival guide for Lean practitioners

What has disrupted your business lately? Loss of customers, tsunami, recession, last-minute transfer to a remote location, tornado, flood, oil spill, customer recall, new competitor… In tough times, some companies disappear while others turn around on a dime and launch new products and services. But how do you know which will stay alive and which will disappear?

Today, the ultra-complex nature of our global economy, our ecosystems and our political and social relations means that we can’t predict the future with any certainty. Disruptions and crises will be to business what weather forecasts are to the weather: something we have to live with, whether we saw it coming or not.

How do you recover from a crisis?

Almost everyone answers “thanks to Leadership”. If you’re in a leadership position, how does it help you to know that? That answer puts pressure on you to get your team out of a sticky situation, but it doesn’t tell you how to do it. Now it’s time to answer that question in a more concrete way.

Planning will help you cope with events that had been anticipated. But there will be other low-probability, high-consequence events that present surprising challenges. This is when no one has the answers, and everyone becomes a learner. The person in a leadership position needs to build a structure that will help the team feel safe in unfamiliar territory.

On the continuity of operations and crisis management side, Coast Guard Vice Admiral Thad Allen is recognized for the way he managed the U.S. federal government’s response during hurricanes Katrina and Rita. He was promoted to commander and became the point person for resolving the disasters that followed. His secret: rallying troops around a common goal and effort. In other words, he says everyone must be aligned around a single, easy-to-understand goal. This goal will direct the efforts of all stakeholders in the same direction.

This approach should ring a bell with Lean practitioners. Whether you call it your “North Star” or “the target situation”, it’s what you’re already trying to establish with your teams. Making a habit of solving problems and investing in people development starts to pay off when the unexpected happens.

Leading by values: 2 good examples

Do you know one of Toyota’s guiding principles? “The perpetual development of the company through constant innovation and the provision of high-quality products and services.” This principle has led the company to manufacture looms or cars in times of war, financial crisis, earthquake, pandemic or flood over the past 75 years.

The situation at Johnson & Johnson is another fine example of resilience. In the 1980s, its Tylenol tablets were contaminated with cyanide. Executives said they had no crisis management plan and were guided by the company’s values formulated 40 years earlier: “the company has a responsibility to the consumers and healthcare professionals who use its products, to its employees, to the communities where its employees work and live, and to its shareholders”. Johnson & Johnson put its values into practice by taking all its products off the shelves, demonstrating that customer safety was more important than profits.

Sincere values aligned with your personal actions and those of your company have great power since they can be applied in any situation. This approach enables your organization to remain consistent and retain its identity, even in times of crisis.

Transparency first and foremost

The aim when dealing with a disaster is not to return to what was the old normal, but rather to create a stable state under new conditions. There’s a mourning process to go through and a new trust to build. Some people avoid difficult discussions on the pretext that they’re trying to protect others, but in doing so they’re actually protecting themselves from other people’s reactions to difficult news. In times of crisis, this is not the time to hide information from your team. Trying to act as if the situation were completely under control is a lie that won’t fool anyone.

The next target situation is the survival of the organization. The bond of trust will help your team work towards this goal, but to get there they need to know exactly what’s at stake. Chances are, your team members know better than you how chaotic the situation is. They’re on the Gemba every day, after all. Denying the situation will damage your credibility and increase your staff’s anxiety level.

During a crisis, this is not the time to wear white gloves. Rather, it’s the time to be honest about what you know and don’t know. Being sincere even if you don’t have all the answers will show that you’re aware of the situation and the obstacles that lie ahead. Of course, you need to remain optimistic and believe in your team’s ability to rise to the new challenges. A good way to do this is to remember that you’ve worked with your team members for some time, that you may have hired them, that you know their strengths and that you’ve celebrated their successes with them. If you’re unsure, start experimenting and tracking your progress. Think of it as an unplanned process improvement project.

Lean tools such as a Kata board, A3, Obeya or Hoshin-Kanri will help you maintain transparency. On the other hand, avoid spending too much time on layout. The real added value here is the grouping of useful information so that everyone has access to it. You can repeat the process to improve, and ask your team for constructive feedback on your communication.

Working together to regain control

Values and transparency create a common purpose. The next step is to create joint efforts. Without coordination, you risk spending your limited resources on possibly useless individual actions. It’s essential to be present on the Gemba, accessible and ready to help overcome obstacles. If your staff on the Gemba are now working remotely, you need to contact each team member regularly. You need to feel a presence and a connection with others, even if you have to keep a safe distance.

When usual processes are disrupted, each person’s role is not defined. Everyone has to find new ways to bring clarity and meaning to their work. Cycles of repetition (in the form of Improvement Kata or Plan-Deploy-Control-Act models [PDCA]) structure processes by breaking down a challenge into smaller, simpler steps.
This approach prevents your staff from becoming overwhelmed by the situation, and enables them to concentrate on the next step.

Coordinating efforts shouldn’t be done in meetings. You need to make an impressive number of decisions immediately. Survival and safety must rely on your organization’s automatic nervous system. In other words, on the autonomy of the people on the front line. When the new state of equilibrium is reached, you can resume your global strategies and start thinking about your long-term objectives again.

During the automatic response phase, all visual management initiatives (quickly implemented) are welcome. They are a powerful tool for empowerment and communication. They draw on automatisms well acquired by our brains, and give us the mental space we need to tackle more difficult tasks such as problem-solving and decision-making. If your organization has already established certain codes and symbols, now’s the time to use them and exploit their full potential. If not, create simple codes that need no explanation (like red-yellow-green lights).

Color coding, observation and signage will help people quickly understand your existing system, even if it changes along the way due to rapid iterations. The next shift’s crew will arrive and see the changes immediately. It’s another way of making changes and iterations well-organized and easy to understand.

What about Lean principles?

Overall, crisis management can be traced back to the key foundations of Lean principles, often referred to as the 4Ps:

• Philosophy
• Process
• People
• Problem solving

When external challenges disrupt processes, you can rely on the other 3 “P’s” to keep working until the integrity of your pyramid is restored.

Last words

Remember, if continuous improvement is already part of your day-to-day operations, then your people already have the tools and skills to get through the tough times and come out stronger.

Investing in human resources means investing in your company’s long-term viability. This approach will pay off in a crisis, as it will enable you to maintain your operations, create new opportunities and improve your marketing and employer brand.

It’s in times of crisis that we discover a person’s character. Your ability to weather the storm will be noticed.

To find out more, we recommend the “Problem solving in a complex world” course!