Effective crisis management - The IMD way…

The earthquakes in Japan and New Zealand, the oil spill in the Gulf of Mexico, revolutions in North Africa and the Mid-East, terrorist attacks—it is an unfortunate but stark reality that in today’s business environment there are ample examples of crises and the necessity of effective crisis management.

In order to help companies better prepare for the complexities that these increasingly frequent events present, IMD has introduced a new stream into the Orchestrating Winning Performance (OWP) program that is dedicated to helping participants asses both their companies’ risk preparedness as well as their own responsibilities to mitigate risk.

The stream, entitled “Global Risk and Crisis Management,” was moderated by IMD Professor Bill Fischer and IMD Director of Partnership Programs, Tania Dussey-Cavassini. Here, participants were challenged to envisage a potential risk and to subsequently outline their organisational objectives in the immediate aftermath. “The question should not be whether or not a crisis may occur,” Fischer insisted. “Instead, when it happens, are companies prepared and have they invested in contingency plans to address the situation.”

Participants agreed that among a company’s main objectives are securing and communicating employee safety, maintaining service for clients, mobilizing resources to help the society affected, minimizing damage to the corporate reputation and retaining an effective relationship with the government.

Guest speaker Ambassador Christian Dussey, Head of the Crisis Management Center for the Swiss Ministry of Foreign Affairs, drew compelling parallels between his work managing emergencies involving Swiss citizens, and the work of a multinational company managing emergencies involving its operations across the globe.

Eliciting the remark of former US President Dwight D. Eisenhower, “plans are useless, but planning is indispensable,” he walked participants through the critical elements necessary for achieving the best preparedness possible, all the while emphasizing the importance of organizational agility when dealing with a crisis.

Participants have had the opportunity to learn how to identify, analyze and solve problems that could arise during a crisis situation. Using hands-on examples and group work in which participants simulate the crisis management process, the week-long stream tackled topics such as how to make decisions in time-sensitive, high stake, high pressure and uncertain environments; how to communicate during a crisis in a digital world; and what skills a leader should develop in order to lead his/her organization out of a crisis. Diversity of perspectives were brought in during the week by various guest speakers, including representatives from the Swiss Federal Government, the global multinational company Nestlé, the ICRC (International Committee for the Red Cross), as well as a pilot from an airline company.

“Our objective is to empower these executives to understand their own potential to lead in crisis situations,” explains Dussey-Cavassini. “We have a responsibility to say more than just ‘this is too big for me to understand.’ Instead, we should determine what our roles in the risk-preparedness process are and confidently assume that responsibility.”

Jean-Claude Biver, the charismatic high-voltage CEO of Swiss luxury watchmaker Hublot, was the third keynote speaker of the IMD Orchestrating Winning Performance (OWP) 2011 program. His personal vision of leadership, built on three pillars of wisdom, is not the kind found in most business manuals.

Hublot has experienced phenomenal growth since Biver took over in 2004, and he is largely credited for the re-branding of Blancpain and Omega. In an animated performance, Biver delivered the keys to his own style of leadership, founded on the principles of sharing, respecting and forgiving. The common thread, he said, is love, of which he believes there is not enough in this world.
“If the 21st century wants to survive, it must discover love again,” he said, adding that the transmission of love is what gives meaning to life. “It took me 25 years to discover that my philosophy was based on this principle,” he volunteered as an explanation on how it has permeated his work ethics and inspired his own style of leadership.

The first requirement for good leadership, Biver declared, is to know how to share. He believes that sharing knowledge, doubts, successes, and even failures, is key to “what makes you rich.”

“The brighter you are, the more you share what you know. People who don’t share are dangerous. Why be afraid to share knowledge,” he asked, quoting Albert Einstein who said that creativity and innovation are more important than knowledge.

Doubts too must also be expressed, he said. “My people must know that I have doubts. Doubts are what allow me to rethink. When people help me because of my doubts, I become stronger.”

As for failure, it is the motor of success, he affirmed. “There is nothing worse than to be a leader and hide your failures, because each failure brings you closer to success.”

However, when it comes to competitors, Biver cautions that leaders must first make sure that they are unique and different before revealing doubts or failures. It is important to first confide in those we trust.

The second principle of Biver’s work ethic is respect, respect for yourself, as well as for others. “I tell my purchasers to never mistreat our suppliers, because the quality of our own goods are entirely reliant on them.”

Also out of respect, Hublot never gives watches as gifts for celebrities, “because they cannot cherish what they have not chosen. They must buy it at full price, then they’ll love it,” he said to an explosion of laughter.

The third principle, Biver said, “is not so easy, because it is means forgiving. But if you cannot forgive mistakes, you should not be the boss of a team.”

To be an entrepreneur and to have vision inevitably means that many mistakes must first be made. Biver once instituted a system whereby employees who made mistakes would receive a financial reward, but it backfired when those who didn’t considered the treatment unfair.

“There are so many mistakes that can be made, so you might as well make as many as possible, as soon as possible,” he advised, “but never make them twice.”

As Biver believes the role of a leader is to allow for mistakes and never hold them against those who make them, he has applied this to finding talent. When employing people, always look for failures in their CV, “the more the better,” he challenged.

In reflecting on Biver’s three leadership principles of sharing, respecting and forgiving, it’s also important to see how broadly he applies them. They are not just turned on for business meetings.

Biver said the secret of his own leadership success is the lack of separation between his personal and his professional philosophies: “I never have to switch from one to the other. Whatever I do, I do in an authentic way.”

Further, at a ceremony that took place during the Orchestrating Winning Performance, (OWP) program, President Dominique Turpin recognized 11 IMD alumni with Lifelong Learning Certificates for their demonstrated commitment to continual learning over the course of their careers. The award recipients were selected for having completed at least four IMD programs.

“One of the greatest services we can offer our clients is to inspire them to pursue learning throughout their lives,” OWP Co-Director Professor Bettina Büchel explained in her remarks to the award recipients. “Your commitment is encouraging to us as it shows that we are on the right track.”

When asked why he returns to IMD time and time again, CEO of Clinton Devon Estates and award recipient John Varley underscored the importance of IMD as a global meeting place: “regardless of career stage, we can all benefit from the insights of people coming from different contexts; IMD attracts people with a wide range of perspectives to the same place—this international element is very important to me in my learning.”