Thursday, March 25, 2010

Crisis Management - Telecom New Zealand (Case Study)

Telecom New Zealand has been having a real hard time recently.  They engaged a new project and product offering.  Telecom installed an entire new network, called XT, with high speed capability across the country.

The system was buzzing along fine for a few months and then the unthinkable happened - the network failed!

Okay - they set to work to fix the problems as quick as they could.  Then a few weeks later the system crashed again, and then crashed again with a grand total of four crashes.  The crashes ranged from being nation wide for a few days, to occuring in a localised area for a few hours followed by inability of users to call emergency services.

Once the media sensed there was a 'news-worthy' story they started watching out for further fails.  Like vultures awaiting the dying prey to fall, the media waited.  And, unfortunately, they got what they wanted.

This post isn't bout the media and their coverage - it's about accountability.  Given the service crashed four times and affected different locations and types of customers who is responsible?  The most obvious place to start is the CEO.  They have the final sign off for crucial projects and therefore the buck stops with them.  Right?

Not necessarily.  Like the Toyota hearings being held in the Senate earlier in the year management may not have actually been at fault!

If I were the CEO of Telecom or Toyota here's what I would endeavor to do -
  • Stay put.  I would do everything within my power to see the problems/projects completed.
  • Be open and transparent.  There was no hiding the fact that there were issues going on.  Hiding away or trying to ignore the problems does nothing to solve them.  Create a plan or strategy for dealing with the issues (the more comprehensive the better) and then use the media to broadcast those ideas instead.  Make the media work for you and not the other way around.
  • Rally internal support.  I would seek out those loyal to me firstly and make sure I had a team who were prepared to take the rap as well and see the project satisfactorily completed.  If I was unable to gather the level of support I needed then I would reconsider my first decision to stay put.
  • Rally external support.  Ultimately shareholders and stakeholders are your employer.  I would be seeking out ways to get those persons on board as quick as I could.  The rlationship you have as CEO with the Chairman of the Board can be the making or the breaking of your employment position as well.
  • Know when to call for help!  I would seek out extensive experts in their field.  No one person has the capability to deal with this type of situation.  Cool heads and intelligent people are needed to work through these issues. 
I am lucky(?) that I am not in the position of those CEO's and I wouldn't wish those fail scenarios on anyone.  But I do relish the opportunity to muse on what the Telecoms and Toyotas have done in their hour of crisis so that I can plan now for whatever may come in future years.

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