M A N A G I N G CRISIS - A LIVE S I M U L A T I O N

In the Autumn of 1993, a group of five professionals developed a new form of management training - the simulation of a computer crisis, in which the participants role play the board of directors of the target company. The simulation was then run on three occasions over a two month period - the first occasion, a dress rehearsal, involved colleagues of the five profes- sionals acting as guinea pigs, the second occasion was arranged for their clients and the third was run on a commercial basis on behalf of organizers, Elsevier. The scenario chosen computer extortion in

the conference

was that of a a multiple retai-

ler. The participants were told that, typically, the dummy company was totally reliant on its computer systems for both stock control and electronic point of sale. To add extra pressure a few of the additional 'Murphy's Law' dimensions that very often coincide with a crisis were included - the company was in the process of making a hostile takeover bid for a competitor and its share performance was crucial to the success of the bid, the managing director was overseas and uncontact- able and the crisis broke immediately after Christmas and just before the vital January sales. The guest participants were allowed to agree amongst themselves which of a number of senior board roles they would each play. Certain board positions carried with them entitlement to further information that was available on a confidential basis. The crisis was unra- velled in four segments with the scenario being explained and specific decision tasks allocated. The Board could consult any of a number of expert consultants, the consultants being played by the professionals, all 'real life' experts, e.g.

a senior officer from the Serious Fraud Squad to answer questions on how the police respond to an extortion attempt, a public relations expert for the point in time when the story begins to leak to the press, an insurance broker to answer questions on the company's typically inadequate computer insurance and a management consultant specializing in the enforced investigation of internal fraud and computer crime. In each of the simulations two dummy boards of directors competed. The scenario was designed so that the right decisions would permit a resolution of the crisis and thus a successful take-over battle. However, the wrong decisions would result in adverse publicity, lost sales, poor end of year performance, reduced share price and an unsuccessful takeover battle, accompanied by the enforced resignation of key board members including all of the partici- pants. The one major disappointment of the event was that, for both the client and Elsevier simulations, the take up numbers were very low (after all, a crisis is something that happens to other organizations, and in any event we'd muddle through somehow) and whilst main board members were invited those that saw the need for their companies to participate invariably nominated some- one relatively junior, and usually from the IT area, to attend in their place. As could then have been predicted, the dummy boards placed far too much emphasis on the search for technical solutions and far too little on the business priorities. They also displayed considerable weaknesses in decision making - despite tight timescales, decisions were made by (slow) consen- sus, and few strong leaders emerged. The participant's feedback from all the three simulations was extremely favour-

able. They not only gained a great deal from the experience itself, but they learned and remembered many lessons from the advice that was given to them both during the simulated consultancy and the experts' analysis of the group's decisions. The final piece of feedback received from all of the delegates was that they had found the event tremendously enjoyable - a prerequisite with clients or paying delegates. The pressures that were applied (including sacrificing the usual leisurely conference lunch) helped to create and maintain the illusion of participation in a real crisis, particularly when the dummy boards started to received telephone calls from aggressive journalists who had scented a story, while at the same time negotiating with the extortionist and trying to make contingency plans to preserve the vital business functions, but again this proved that when the adrenaline levels are high, in the short term at least, 'everybody loves a crisis'. The event was rewarding for both the professionals and the participants and we will be developing the idea further during 1994. If you would like to participate in or contribute to future developments, please contact the author. The five professionals were:

David Davies Detective Chief Inspector Ken Farrow

Roger Miles Mark Tantam Zig. Lozinski

Hogg Risk Managers

The Serious Fraud Office Georgeson & Company Touche Ross & Co IBM UK Laboratories Ltd.

David Davies, Report Correspondent

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