CEO Crisis Management Capability Is Facing Major Challenges

"Not every day there is" natural disaster ", but once the" natural disaster "comes, if it is not properly handled, it will cause a devastating blow to the enterprise. Therefore, as an "enterprise leader", CEO must have an extraordinary crisis management capability to enable enterprises to survive under the "natural disaster". Tsinghua University professor Zhou Peiyu, a well-known strategic management expert, said in an interview with reporters.

The Japanese government announced in April 12th that the radiation leakage of Fukushima Daiichi nuclear power plant should be raised to 7 level according to international standards.

So far, a nuclear crisis triggered by the earthquake and tsunami has evolved into a nuclear disaster that affects the whole world.

The sudden disaster is like a ruthless examiner who tests the CEO. Crisis management capability 。

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Crisis decision making ability -- the highest principle of eliminating crisis

Natural disasters are sudden and will not leave enough time for decision-makers to think and respond. Even CEO, which is rich in experience, is hard to judge the degree of crisis accurately at this moment, find out the most appropriate way of dealing with it and resolve the crisis at the lowest cost. Therefore, we can start from the "worst" result of "natural disasters" and deal with the crisis at any cost, and test the courage and crisis decision-making ability of a CEO.

Just as in the enemy's encirclement on the battlefield, commanders must quickly choose which way to break through and not have the chance to "preserve strength". The unfounded ground believes that the enemy they encounter may be particularly weak and vulnerable, or perhaps the team of their own people may be nearby, and will wait for a while to wait for reinforcements.

Zhou Peiyu said that the minimum cost to solve the crisis's luck is the ultimate culprit to turn the crisis into disaster. From the current Fukushima nuclear crisis to the BP vulnerability last year, the main reason for the escalation of the disaster is that CEO missed the critical opportunity to eliminate the crisis completely because of its consideration of reducing losses.

Judging from the current analysis, Tokyo electric power company has missed two time nodes dealing with the nuclear crisis. First, after the March 11th earthquake, Tokyo electric power company did not realize the seriousness of the problem and did not announce the failure of the cooling system of the Fukushima nuclear power plant for the first time. Two, in March 12th Fukushima unit 1 plant explosion, East power did not have the first time to report to the Japanese authorities. These two nodes are considered to be the key to deal with nuclear accidents at minimum cost, but they are all delayed.

In March 19th, the Wall Street Journal quoted people familiar with the matter as saying that the Tokyo electric power company's efforts to control the paralyzed nuclear power plant were delayed by fear of damaging expensive assets. It is alleged that Japan's "nuclear disaster" is more natural than natural disasters.

As early as the morning of March 12th, the second day after the earthquake, Tokyo electric power company had considered using seawater near the coast to cool one of the 6 nuclear reactors. However, because of concern that the seawater might permanently shut down the nuclear reactor and damage its long-term investment in the nuclear reactor, the nuclear power plant began to use seawater to cool other reactors after the Japanese Prime Minister Naoto Kan issued the order until the nuclear reactor exploded and the accident worsened.

In April 20th last year, the BP company's Mexico Bay rig suddenly exploded and did not take the "one step" approach in the process. Instead, it tried to install huge reinforced concrete cover, open the check valve and set up suction pipes, and so on. After all the results were unsuccessful, the blocking method was finally successfully blocked. In about 3 months, about 4 million 900 thousand barrels of crude oil leaked, of which 4 million 100 thousand barrels flowed into the Gulf of Mexico, and the former British oil giant was dragged down.

As a Japanese government official said, they did not react positively at the beginning. The operation of Tokyo electric power company is like trying to pick up a 10 yen coin, but has lost a 100 yen coin.

Digital 100 company marketing director Shi Zhi Jie said that in practice, many enterprises attach great importance to CEO. Decisive decision making ability 。 In a recent survey conducted by the Chinese Entrepreneurs Association, strategic planning, decisive decision making and team building were regarded as the core competency of professional managers in turn. Comparatively speaking, wholly foreign-owned / multinational corporations have the highest demand for professional managers to make decisive decisions.

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Crisis management capability: a solution to the scientific system

Just as the troops trapped in the encirclement can not break through blindly, instead, commanders should make judgments based on experience and intuition in the instant and make corresponding operational plans. As usual, crisis management is a systematic project, which requires CEO to formulate scientific and systematic solutions.

In 2010, the two month old mine rescue in San Jose copper mine in Chile was seen as a perfect case for the scientific system to deal with the crisis. The Wall Street journal, entitled "Chile rescue formula", is a science of 75%, a miracle of 25%. Every detail of the rescue process is carefully considered and scientifically considered.

In August 5, 2010 at 2:00 pm local time, a landslide occurred in San Jose gold copper mine, causing a collapse of a tunnel 518 meters away from the ground, and 33 miners were trapped underground.

After the mine accident, the government immediately formed a rescue organization with a clear division of labor, including rescue workers, medical personnel and a specialized laboratory, responsible for designing the equipment and equipment needed for rescue. It also invited experts from the US space agency to advise.

In order to save the miners safely, the rescue party formulated A, B and C action plans, using three different digging machines respectively. Until the successful implementation of the rescue plan in accordance with the B plan, another plan is still in progress, so as to prepare for unexpected accidents in the B plan.

In order to speed up the progress of rescue, the rescue personnel used large caliber and high intensity machinery, and put in place the measures of implanting copper tubes for the most easily collapsed strata below 100 meters below ground, so as to reduce the possibility of collapse.

After the rescue channel is opened, the miners need to carry out a controlled blasting in the underground so as to clear the sand near the rescue channel and facilitate the access of the rescue module. This is regarded as the most dangerous part of the whole rescue process, because blasting can collapse the mine at any time. In this regard, after detailed analysis of the underground conditions, the engineers demarcated the blasting area, effectively preventing the occurrence of the miners' injuries by the collapse and explosion shock waves.

After finding that 33 miners still survived, the rescue team began to "restore nutrition" to the trapped miners and receive professional treatment. Rescuers also designed a rescue equipment called "Bailan pigeon". This set of equipment travels 40 times a day, conveying food and other necessities and bringing back letters and dirty clothes.

Due to the small size of the rescue capsule, nutritionists from the United States set down special recipes for trapped miners, limiting the amount of calories taken by miners to less than 2200 calories per day to prevent obesity.

During the rescue process, in order to prevent the miners from being trapped in a confined space, producing fear or causing other psychological problems, rescuers use technology to enable miners to communicate with the outside world through correspondence, telephone and video. NASA experts were also consulted on how to maintain emotional and psychological health for people in confined space for a long time.

The most important device in rescue is the Phoenix capsule capsule. The rescue capsule is equipped with oxygen supply system, built-in audio and video communication system and escape equipment, equipped with protective gloves, eye patch and safety belt.

The final rescue process is also organized. The officers who went down the well included 3 Chilean Navy divers, medical personnel and 1 firefighters. They examined the miners and told the miners about the problems they might encounter during the lifting process, including how to breathe and so on. Although many miners were willing to volunteer for the final well, they decided to let the miners, who are healthy, especially those with strong psychological qualities, finally get out of the well because they had to face their companions' leaving and have to remain alone in the underground. The first batch of wells were those experienced and capable of handling emergencies in the rescue process. Miners who are most physically weak and suffer from high blood pressure are arranged to go out in the middle.

In October 14th, 33 trapped miners were rescued. This rescue operation, known as "surgical precision", provides a sample for handling emergencies around the world.

Shi Zhijie said that in addition to extreme situations, CEO's crisis handling capability is more from actual combat experience. A famous company once claimed that it only recruited professional managers who had failed, because they had the experience of standing up from failure. Related surveys show that industry experience is an important factor for enterprises to choose professional managers. Nearly 50% of enterprises focus on inspecting their experience when hiring professional managers.

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Crisis prevention capability -- persuading shareholders to pay for small probability events

From BP company's drilling platform explosion accident to Fukushima nuclear accident A lot of unexpected events are actually caused by cost.

As early as June 5, 2008, a steel pipe on BP's giant drilling platform in the Gulf of Mexico broke down on Atlantis. This steel pipe is connected to a defective pipeline pump. BP has delayed the repair of the pump, and the internal report later described it as "tight budgetary cost".

Before the explosion of the Deepwater Horizon drilling platform, BP CEO CEO repeatedly indicated that he was handling two difficult tasks at the same time: causing safety problems in major accidents, including the 2005 Texas refinery explosion death accident, which led BP to lag behind the bloated cost of Holland's Royal Shell Companies and Exxon Mobil Corp.

BP's cost cutting plan soon saw results, and in 2008, it generated a profit of 25 billion 600 million US dollars, rapidly exceeding the Shell Companies and becoming the highest oil company in Europe.

However, BP's improvement in security is different from what it claims. Barab, Deputy Assistant Secretary of the occupational safety and health administration of the US Department of labor, said: "they claim to be very concerned about safety. I think this is true. But somehow, their sincerity and their plans are not reflected in the actual refineries. "

In the Fukushima nuclear power plant accident, we can also see the shadow of "low cost". As early as 3 years ago, a Japanese research group submitted a report to Tokyo Electric Power Company, pointing out that the Fukushima nuclear power plant could only withstand the tsunami of 6 meters high, but there might be 10 meters of tsunami in the surrounding waters. However, Tokyo Electric Power Company has not taken any measures to this end, and has lost a chance that can be redeemed.

Why are CEO willing to exert great efforts in reducing costs, but refuse to actively prevent the occurrence of natural disasters? The most important reason is that the level of efficiency is a normal index for shareholders to assess CEO, while safety incidents are small probability events. Even for a single enterprise, even if the safety input is reduced, there may not be any disaster. However, if an enterprise has invested too much in safety, and there is no corresponding investment in the peer industry, without the occurrence of safety incidents, the cost of the enterprise will be greater than the average cost of the same industry, resulting in the failure of the enterprise in the market competition. CEO will be under double pressure from shareholders and the market.

Zhou Peiyu said, from this perspective, CEO's Risk prevention capability To a large extent, it does not depend on its risk control consciousness and risk control ability. It depends on the ability of the persuading shareholders to abandon some profit indicators, increase the ability of safety input, and even affect the ability of the same industry to synchronously establish safety investment and prevent sudden disaster. From this point of view, the risk control ability of an industry depends on the risk control consciousness and ability of the top companies in the industry with absolute discourse power.

Frequent mine accidents are the direct result of low cost operation. According to the State Administration of work safety supervision at the end of 2006 survey, only state-owned key coal mine safety arrears amounted to 68 billion 900 million yuan, local and private coal mine safety accounts for up to about 200000000000 yuan. Correspondingly, the number of deaths in China's coal mines is 100 times that of the United States, 13 times that of India, and 3 times that of the world's coal mines.

When the safety awareness group is missing, the small probability event becomes a big probability event. Crisis management not only tests CEO's ability to cope with natural calamities, but also tests its ability to prevent human calamities.