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Leadership
The Psychological Barriers to Crisis Management
How Freud's defense mechanisms work to thwart crisis management.
Posted February 11, 2021
In 1986, I founded the USC Center for Crisis Management (CM). From its very beginning, I had a number of graduate students conduct interviews with as many executives with whom we could talk in order to learn as much as possible regarding what they and their organizations were doing with respect to CM.
Essentially, every one of the students came back with the same story: “The executives with whom we spoke said that they would like to take CM seriously, and thus give it the full attention it deserves, but their senior managers denied the need for it.” What they then reported were a series of rationalizations as to why the organizations didn’t need to bother with CM.
Since I knew my Freud, a light turned on in my head. The Defense Mechanisms that Freud discovered/formulated that pertained primarily to individuals had their direct counterparts in organizations.
First and foremost is denial. In this case, one denies altogether a horrific Event/Reality such as the death of a loved one that is too terrifying to contemplate and therefore to acknowledge. In the case of organizations, it takes the form, “We don’t have any major problems whatsoever! There’s no need whatsoever for Crisis Management! It’s a complete waste of time and money.”
Disavowal at least acknowledges the existence of problems but downgrades their seriousness such that they don’t need to be addressed. In other words, “It’s not that important!”
Compartmentalization takes the form of: “Our problems are confined such that they cannot possibly bring down the entire system.”
With regard to intellectualization: “Excellent organizations don’t have major problems, certainly not those with which we cannot deal.”
Projection puts the blame on others, such as, “Our competition is out to get us!” Or, “It’s all the fault of former disgruntled employees.”
In particular, I had several Ph.D. students who showed by means of their doctoral dissertations that the more an organization subscribed to the various Defense Mechanisms, the less prepared and able they were to respond to major crises. Conversely, those organizations that were prepared, i.e., practiced Proactive CM, experienced substantially fewer crises, recovered faster with fewer costs and injuries, had fewer lawsuits, and as a result, were much more profitable. In short, Proactive CM was not only the “right, ethical thing to do, but it was supremely good for business!” Proactive CM allowed one to address problems before they turned into major crises.
During the time of its existence (1986-1996), the USC Center for Crisis Management had a number of corporate sponsors who not only gave us the funds so that we could conduct our research, but just as valuable, gave direct access to their organizations so that we could study and learn how they prepared and responded to major crises. One, in particular, stands out.
Many years ago, I visited a major pharmaceutical company. I asked the person who agreed to talk to me what they were doing about product tampering, the particular crisis that perpetually cast a dark shadow over the entire industry. Without losing a beat he said, “We formed a number of Internal Assassin Teams.” To which, I blurted out, “You did what!?”
“Yeah, one day we held up a bottle of one of our major painkillers, and we looked at the cap as the door of a house, and the sides as the walls. We then asked ourselves, 'How could a burglar get in, do the most damage, and remain undetected for as long as possible?'
“Since we felt that we knew more than anyone else about our products and manufacturing processes, we figured that we could attack our products better than anyone else. We quickly learned that there was no surefire way to keep out a determined burglar, so tamper-proof bottles were completely out of the question. The best we could come up with was tamper-evident seals so that if a bottle was compromised, a consumer would know it immediately.”
In the years following, I’ve used the idea of the Internal Assassin Team exercise to varying degrees of success with several organizations.
If I had to pick a single variable that affects whether an organization engages Crisis Management, it would be Crisis Leadership. In the first place, it affects the basic ability to take CM seriously; set up Crisis Management Teams; consider worst-case scenarios and thereby assess an organization’s vulnerabilities; set up early warning systems that announce the likely occurrence of crises; and finally, do everything possible to prepare for the worst, and hopefully prevent it.
In sum, everything is riding on the ability of those in charge to face up to the most painful realities.
The essay above is drawn from The Psychodynamics of Enlightened Leadership: Coping with Chaos, with Ralph H. Kilmann, Springer, New York, 2021.
