Corporate crisis can lead to four clear emotions exhibited by employees: denial (ranging from conspiracy theories to false information), shock (resulting in a sense of numbness and disbelief), shame (leading to withdraw) and anger (a sense of betrayal and frustration).

So, how do companies augment human resilience?

The first is to create a corporate culture where ethical conduct is valued. It is important to develop an ambience in which employees and stakeholders trust the new management in its commitment to doing business with utmost integrity. Also important is to restore a belief, at all levels, in walking the straight and the narrow path.

Whistle Blower policy is one example of the kind of processes we swiftly put in place. It was a critical means through which stakeholders could raise actual or suspected violations and acted as a deterrent, across the organization, to unacceptable behaviour. Communication through concerted campaigns (and research) becomes the bridge for employees to generate confidence and a sense of purpose for continuity. Training is another process to address simulated issues of conflicts of interest and other dilemmas in the individual workplace.

Five principles to drive change should be considered:

  1. Embrace the new normal
  2. Question status quo
  3. Innovate at all levels
  4. Balance experience with experimentation
  5. Encourage risks; failure is the currency of success

Challenge conventional thinking and innovatively use all your resources to drive positive change in the lives of our stakeholders and communities across the world, to enable them to “rise”. It is a powerful concept and one of those wonderful opportunities for us to convert the ordinary into extraordinary and drive positive change for our stakeholders.

The crux of crisis management and resilience lies in leadership, delegation, information networks, teamwork and strong public service. But this must not lead us to “paralysis by analysis”. With judgment, understanding and planning, we need decision-making. Every company needs to build up a corporate structure and environment that fosters strong and quick decision-making, sometimes after proper analysis, and otherwise, naturalistic. Mishandling a reputational crisis may have a serious impact, so we must all be prepared for the risks that the changing world and technology brings about.

Factors that can elevate reputational risks are:

  • Continuous inflation of the information bubble. The need and expectation for transparency from businesses today is huge considering the unlimited and quick access to information.
  • A global integrated economy brings with it a complex network of risk, which are not just confined to the legal working of the firm but also brings in reputational challenges. Any issue, even the smallest, has a ripple effect considering the reach and scope the global economy offers.
  • The “more for every buck” ideology that has developed in consumer and investor behaviour brings about an opportunity and a challenge for organizations. Due to accessibility of information, not only customers, but many other groups are also interested in companies’ activities and processes.

In conclusion, resilience is an individual’s tendency to cope with stress and adversity. And you’ll be surprised at what you can do when such a situation hits.

Author: CP Gurnani is Chief Executive Officer of Mahindra Satyam and is participating at the World Economic Forum’s Annual Meeting 2013

 Image: A man walks through an office building in Tokyo REUTERS/Isseis Kato