Lessons in Crises Management from Anna Hazare’s Protest

If you break your neck, if you have nothing to eat, if your house is on fire, then you got a problem.  Everything else is inconvenience.  ~Robert Fulghum

Last month’s Anna Hazare’s fasting protest for Lokpal Bill showed one thing – that the government had no idea on how to manage a critical situation. In Baba’s Ramdev’s protest they got away with doing a surprise midnight action by police and thought that they same approach will work. It backfired and people were on the street. The government flip-flopped, screwed up and was red-faced. Their antics not only gave Anna Hazare’s civil society group the upper hand, they also showed that they have no idea what they were doing.

Source : thesassygrey.blogspot.com

I watched the incident closely and was vastly amused. A small group took on the largest democracy’s government and government was on the back foot.

I have managed a number of crises. I am not sure why my bosses selected me- either because in the biggest of crises I never lost sleep, appetite or my sense of humor. And/or it was because I am single without any liabilities hence can move anywhere in the world within a short time span. So could be easily deputed to the crises location.

Therefore, here are some lessons from the episode, which are applicable to any organizational crises. I used these in many occasions and vouch that they will work.

1.    Don’t press panic buttons

Managing most crises situations is a psychological battle. The moment the key players of any one side panic, that team loses the game. So be chilled out and have fun. This might sound inane, but trust me it always has worked for me. Even in Hazare’s case, the government team panicked when they prosecuted him. That resulted in their downfall. Hence, stay calm and collected.

2.    Don’t play the opponents game

Never ever play the cards dealt out by an opponent. Develop your own strategy and force the opponent to react to it. The moment the opponent is forced to play your game, you have the upper hand. The Civil Society called the shots in the protest; they had the strategy outlined. The government team spent all their energies reacting to it.

3.    Don’t compromise

The moment you show willingness to compromise, you have lost the battle. Stick to your stance and keep the devil may care attitude intact. I recall an incident where a bunch of people wished to blackmail my father since he was in a senior level position and working in highly infested dacoit areas. My father told them to go to hell; he is not paying five bucks also. The blackmailers did not know what to do next.

For this, calculate the worst-case scenario for each of the consequences of the opponents move In Hazare’s case, the worst-case scenario for the government was that Anna Hazare dies fasting. That would have brought on riots and civil unrest. Hazare’s team knew that, they played the government on that.

4.   Don’t enter into opponents’ territory unprepared.

Never ever, enter a situation without having all the available information and holding a few aces in your hand. Don’t throw your cards away; hold them as long as possible. In Hazare’s case, the team had worked out the location, logistics, funding etc. The Civil Society ensured that even when the government had a stronghold in Delhi, they got the location for the time period they wanted.

5.    Identify the game changer

Determine which person or situation can make you win or lose the game. If a person is critical for your success, get them on your side. For example, if two sides are battling it out, find out who has all the information and on who is their success dependent. Will removing that person from the location make their strategy fall flat? If the opponent doesn’t have the key person or situation to exploit, assess what are the other alternatives they have? If they don’t have any, you have won the first round. In Hazare’s case, Ex-CM Deshmukh turned out to be the game changer.

6.    Maintain Confidentiality

In crises, situations don’t use open forums and social networks for discussions. Find a way to communicate confidentially with your few key team members. Give them unidentifiable cell numbers, secure laptops and other communication devises. Ensure that none of the cell phones, laptops, office rooms, etc. are bugged or have spy cameras. In Hazare’s protest, Swami Agnivesh turned out to be a mole. Use only people whom you trust completely from office or personal relationships.

7.    Prepare a crises management plan

Even for the remotest of the risks, identify people who can manage them, internally within the organization or hire external resources. Develop detailed plans for all the eventualities. Example are, hire an attorney for legal risks, a brand manager for reputation risks, fraud investigators for fraud risks etc. In Hazare’s case, government failed because they didn’t have a crises management plan.

Closing thoughts

In crises situations, the leaders and crises managers need to be emotionally strong to lead the organization through it. In some cases, a small fix can control the external problems; however, a lot of effort is required to control the internal damage to the organization. That sometimes takes six months to a year to resolve issues, make the culture strong, fix the systems, build teams etc. The best way to climb the Mount Everest is to start at the bottom and take one-step at a time. It is a test of endurance, persistence and stamina to reach to the top. In adversity, the tough battle it out.

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CAG Audit Report on Air India and Indian Airlines

“Man must rise above the Earth — to the top of the atmosphere and beyond — for only thus will he fully understand the world in which he lives.” — Socrates

I was waiting for the Comptroller and Auditor General (CAG) performance audit report on the Civil Aviation Ministry, which includes operations of Air India Limited (AIL) and Indian Airlines Limited (IAL). Both the airlines, AIL on international routes and IAL on domestic routes have lost market share in the last few years. The liberalization of civil aviation sector by allowing private airlines to operate ended the monopoly of the government airlines. The market perception was that this resulted in huge operating losses. However, there is much more dirt. Give below some of the highlights of the report.

1.    Purchase of Aircrafts

The report questions the Boeing aircraft purchasing decisions made in 2004-2005 by the Civil Aviation Ministry. In December 2005, decision was made to purchase 50 aircrafts at a price of Rs.33,197 crore (USD 6871 million). The initial plan in 2004 was to purchase a lesser number of aircrafts and over the period, the order increased. CAG has questioned the decision, that the market demand was not sufficient to place such a large order. As per the report –

“The increase in numbers does not withstand audit scrutiny, considering the market requirements obtaining then or forecast for the future as also the commercial viability projected to justify the acquisition. The acquisition appears to be supply-driven.”

It further questions the sudden speed shown by the ministry in purchase decisions. It also categorically refutes the assumptions made for the project and states the costing analysis was improperly conducted. Most of the purchase money was to be funded from debt. In the report it states-

“This was a recipe for disaster ab initio and should have raised alarm signals in MoCA, PIB and the Planning Commission.”

It has concluded that Ministry of Corporate Affairs (MoCA) influenced this decision.

Lessons for private sector

From a private sector perspective, the observations apply to the purchase department. Purchase decisions made without considering organizational requirements as a favor to the supplier implies that purchase department is receiving kickbacks. Overlooking so many aspects of internal controls means collision between employees and departments (buyer, purchase and finance departments). Employees may process fake purchase orders for personal expenses. Periodic supply chain audit including purchase function and inventory management reduces probability of purchasing frauds.

2.   Merger of AIL and IAL into NACIL

The second mind-blowing statement made is about the merger of the airlines. Here is an extract-

“Based on the records, we are unable to ascertain the detailed justification for, or the background to the “in principle” approval of GOI for working towards the merger of AIL and IAL.”

The report further states that the merger made little sense after such massive aircraft acquisition plans. Besides the timing of the merger, the report mentions that financial analysis of the proposed merger was insufficient, without considering ground level realities. Human resources, maintenance of aircrafts, operations, system integration etc. were not delved into deeply for decision-making. The auditors are of the opinion, that the decision was made at the top without due consideration.

Lessons for private sector

Experience has shown that in India most of the mergers and expansion plans are ill thought. For example, some senior managers propose a location for an office, and the decision is made. A detailed analysis at operational, financial and market is not available. I had mentioned in fraud symptoms series that mergers without organizational integration and extensive geographical distribution increases fraud risks. Hence, organizations must conduct detailed reviews of business strategies while making decisions having long-term impact.

3.   Role of Ministry of Corporate Affairs

It hasn’t spared the MoCA at all. The ministry will have some answering to do. Here is a line about the Memorandum of Understandings (MOU) signed by the airlines.

“This skewed the MOU ratings of IAL and AIL to unduly represent a rosy picture of performance. The overall combination of financial and non-financial parameters devised for the MOUs were such as to ensure that the MOUs become a meaningless exercise, rarely (if ever) reflecting poor performance, and ensuring lack of accountability for all parties concerned.”

These are strong statements questioning the validity of key performance indicators, measurement criteria and performance reporting.

Lessons for private sector

The phrase “what cannot be counted, cannot be measured” holds well in respect to performance management. Private sector suffers from the same malaise. Instead of select few performance indicators management is bombarded with trivial many. With the information overload, massaging of data occurs simultaneously. Hence, the timely and accurate information about company performance is not available. Management decisions are flawed and reactive in nature. Investing in good business intelligence systems helps to surmount this problem.

Closing thoughts

The report is excellent and as usual, I am impressed with the independence of CAG reports. The one shortcoming is that the losses were not quantified as in the previous 2G Telecom and Common Wealth Games Report. CAGs viewpoint is that it was outside the scope of the current audit. I disagree with the statement. If the observation is part of the report, the impact of loss is inclusive. Nonetheless, I recommend fellow risk managers to read the report. They can learn a few good lessons.