Crisis management of human resources: lessons from Hurricanes Katrina and Rita.

Hurricanes Katrina and Rita taught many businesses on the Gulf Coast a valuable lesson about the ability of management to plan for every contingency--it cannot. What managers can do is learn from tragedy when it strikes and try to be better prepared the next time. We examine crisis management from a human resource perspective and offer insights into how to minimize losses and disruption should disaster occur. HR managers' centralized location for employee relations, and expertise in communications, writing human resource policies and procedures, and employee training and development offers them the opportunity to make valuable contributions in crisis management planning and implementation. Through lessons learned from these recent storms, we offer specific recommendations on how HR managers can do so. Using examples of how organizations responded to these crises, we illustrate what worked well and what did not in HR.

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Recent events have underscored the need to think about the unthinkable. Hurricanes Katrina and Rita taught many businesses on the Gulf Coast valuable lessons about the abilities of management to plan for every contingency--it cannot. No matter how forward-thinking company managers are, there is no way to plan for every possibility when a crisis strikes. What managers can do is learn from tragedy when it does happen and try to be better prepared the next time.

After terrorists struck the World Trade Center and the Pentagon on September 11, 2001, many managers in the United States revisited their crisis management plans with hopes that they would be prepared should a similar disaster, whether manmade or natural, hit (Kondrasuk, 2004). Because Hurricanes Katrina and Rita packed a one-two punch to the Gulf Coast, many businesses across the country again are examining their disaster preparedness and crisis management plans in light of new lessons learned. This article examines crisis management (CM) from a human resource perspective and offers valuable insights on how to minimize losses and disruption should disaster strike.

We begin by defining CM, outlining the phases of the CM process, and exploring how the concept of organizational learning relates to CM. In particular we illustrate that now is the optimal time to learn from these crises. We then examine the HR manager's role in CM and how HR managers can take advantage of these recent crises to improve their organizations' responses to future events. We offer specific recommendations to improve CM in the HR arena and use several examples to illustrate what HR managers have learned and how these lessons can minimize disruptions in the future.

Crisis Management and Organizational Learning

An organizational crisis is "a low-probability, high-impact event that threatens the viability of the organization and is characterized by ambiguity of cause, effect, and means of resolution, as well as by a belief that decisions must be made swiftly" (Pearson & Clair, 1998). CM involves a systematic attempt by managers to prevent crises from occurring and to manage crises successfully when they do take place. CM begins long before a crisis occurs and continues long after recovery (Pearson, et al., 1997). Three major stages of CM include (Castillo, 2004; Heath, 1998):

1. Pre-crisis or planning: Managers plan how to respond to crisis events that may occur;

2. The crisis itself: Managers respond to the crisis in hopes of reducing or mitigating its impact; and

3. Post-crisis or recovery: Managers assess the damage and attempt to return the organization to at least its pre-crisis state.

The literature on CM and organizational learning suggests that crises may be beneficial if specific learning outcomes are encouraged, because crises create learning readiness in organizations (Kovoor-Misra & Nathan, 2000). They shine a light on organizational weaknesses that might otherwise remain hidden or be ignored. Crises can motivate the parties involved to search for a wider portfolio of responses for future crises and can encourage experimentation and practice (Seeger, et al., 2005) that ultimately may lead to increased flexibility and adaptability (Sitkin, 1996). The ultimate outcome of any crisis is organizational learning that reduces future risks.

During a crisis, stakeholders often experience emotional upheaval that they seek to resolve once the crisis has passed. Often this resolution involves rejection of systems and structures that are associated with the crisis or that may be viewed as contributing to it (Seeger, et al., 2005). The crisis becomes a force for organizational change, an attention-getting event that forces management to focus on a problem that it previously may have overlooked or underestimated.

Timing is everything when it comes to learning from a crisis (Kovoor-Misra & Nathan, 2000). Organizational change is most likely to occur while management is still focused on the crisis and before stability returns and new organizational routines are established. According to Turner (1976), after a disaster, organizations go through a period of normative readjustment during which cultural changes are made that align beliefs and avoidance norms with new post-crisis information and understanding. New insights often lead to changes in organizational policies and procedures that incorporate new understandings of risk.

Organizations appear to go through three learning phases after a crisis: defensiveness, openness, and forgetfulness (Kovoor-Misra & Nathan, 2000). The defensiveness phase is characterized by crisis containment. In this phase, managers fixate on controlling the crisis situation and are not likely to recognize or evaluate the situation for possible learning opportunities. Although information is collected during the defensiveness stage, managers use it to minimize and deal with the immediate crisis, not for long-term learning. During the openness phase, leaders become more accessible to examine the crisis response and understand organizational weaknesses. Most learning occurs in the openness phase because participants are willing to question core assumptions and beliefs of the organization that typically are unconscious and resistant to change. This is the most opportune time for deep learning, because attention is directed toward finding solutions. During the forgetfulness phase, managers lose their sense of urgency and, although the crisis event is not forgotten, the motivation for change and opportunities for learning decline.

Although crises present an opportune period of learning readiness, not all organizations learn from disasters (Kovoor-Misra & Nathan, 2000). Some organizations are too deeply mired in assigning blame, denying responsibility, and other dysfunctional behaviors. Healthier organizations are better able to get on with rebuilding or revitalization. These organizations are able to engage in a "discourse of renewal" that links the pre-crisis, crisis, and post-crisis stages, forming a frame for motivation and cooperation (Seeger, et al., 2005). This is the most opportune time for managers to undertake a discourse of renewal and examine their organizations' CM plans, before forgetfulness and complacency set in.

Hurricanes Katrina and Rita captured the attention of the majority of the population and have encouraged managers everywhere to question their prior assumptions and beliefs about how well prepared their organizations are for disasters of similar proportions. The immediate crisis is over. Organizations have moved on from crisis response to recovery, yet forgetfulness has not yet set in. Now is the time to learn, while openness prevails.

HR's Role in Crisis Management

CM should be multifunctional (Pearson, et al., 1997) and an important part of a company's strategic planning process (Evans & Elphick, 2005). Key management players from across the organization should be involved in CM planning and implementation to ensure a comprehensive approach. HR managers are in a position to make a crucial contribution by developing an infrastructure plan for the company's human capital (Deming, 2002); however, 22 percent of HR professionals report that they have no role in their organizations' disaster preparedness (Fegley & Victor, 2005).

A common mistake in CM planning is to think about a company's human capital only after plans are made for the organization's systems, operations, infrastructure, and public relations (Lockwood, 2005). As Hurricanes Katrina and Rita have illustrated, organizations must give more consideration to the effects of critical events on their employees. Without its human resources, a company's best-laid plans for disaster response and recovery cannot be realized. This is not to suggest that HR should play the lead role in CM, only that HR should be an active participant at the CM planning table. HR managers' centralized location for employee relations, and expertise in communications, writing human resource policies and procedures, and employee training and development offer them the opportunity to make valuable contributions in crisis management planning and implementation. Some vital CM activities, like getting people back to work and paid on time, demand HR's heavy involvement--another reason to include it from the start.