Crisis management often kicks in after angry villagers have descended upon the village. Why? Because most companies address the root of a crisis only after a major fallout has occurred.
Generally, the solution is corporate training. In 2018, for example, Starbucks experienced two public incidents before deciding to close 8,000 stores for racial bias training, resulting in approximately $12 million in lost sales. Chief executive officer Kevin Johnson said in response, “This is a management issue and I am accountable to ensure we address the policy, and the practice and the training that led to this outcome.” This response came after the company withstood a barrage of negative press, in-store protests and social media blasts.
The question that all companies should ask here is not, “How could have Starbucks managed their crisis better?” but, “What could Starbucks have done to prevent it?” Many crises can be prevented by making use of effective learning strategies, but the key is continuity.
Part of preventing crises is proactively understanding both your customers and employees. Wells Fargo, for instance, ignored employee complaints of impossible sales goals and customer complaints of accounts opened in their names without their knowledge, resulting in a payout of $3 billion. Warren Buffet had this to say about the crisis: “They obviously had a very dumb incentive system … and the big thing is they ignored it when they found out about it”.
That being said, when there isn’t an intentional disregard of organizational challenges and compliance violations, continuous needs analyses can reveal budding problems before they bloom. Ideally, employee training and development teams can ten step in to take preventative measures.
Metrics and Performance Indicators
Business units, particularly sales, manufacturing or compliance, tend to have their own metrics around performance, and that data may offer insights that can help predict crises. Those sources will prove useful for analysis. While each organization may have different performance data, some common areas that might warn of trouble ahead include:
- Profit margins: Are your profit margins low compared to other businesses in your industry?
- Customer retention and turnover: Do you have low customer retention and high customer turnover?
- Customer complaints: Is your sales revenue consistently down month after month due to customer complaints?
- Net promoter score (NPS): How likely are your customers to refer your company or product?
- Employee questions: Can employees find answers to questions that training doesn’t cover?
- Employee satisfaction: Do you have high employee turnover?
- Reviews: Are there specific themes that emerge when looking at customer reviews?
Unfortunately, metrics don’t always tell you why there’s a potential problem. That answer often requires more qualitative research and some interpretation. It may also be the case that the problem lies with a product or service — challenges that training may not be able to solve.
Crises often arise when employees don’t have the proper tools, training or knowledge to help them navigate difficult situations. Taking extra steps to provide these things, however, can make a world of difference. United Airlines, for instance, experienced “village” wrath because of the poor handling of an oversold flight. Instead of offering higher-valued vouchers or transportation to the destination, airline employees chose removed four passengers from the aircraft, one of whom was treated roughly. This single event sparked national outrage, plummeting stocks by $1.4 billion.
As our businesses and operations change, employees will face with novel situations. Their ability to navigate new challenges will depend on how well they can generalize the knowledge from their most recent training and whether employees have the necessary critical thinking skills to apply their knowledge.
Strategies for Continuous Improvement
Building an employee training and development strategy with a continuous learning model is critical. The most effective way to prevent training-based crises is to strive for constant improvement rather than a single employee onboarding event. With the data from your proactive needs analyses, design custom eLearning activities based on a list of learning priorities, which should be ranked based on their long-term impact on the organization and immediacy.
In addition, schedule regular eLearning and other learning experiences. Deploying training in consistent intervals (e.g., once each quarter) will help instill a sense of importance around them. You can also use these opportunities to check on the maintenance of skills learners acquired in previous experiences.
As long as there is a dominant human element to the services an organization provides, effective crisis prevention and crisis management must have a corporate training component. Through continuous analysis and continuous learning strategies, you can equip employees with the relevant skills to navigate novel situations and ensure that performance gaps have a minimal impact on the success of your organization.