Chain of Command, Business Continuity Planning, and Crisis Leadership in Corporates
What is the Chain of Command and how it worked in the Satyam and Infosys Crises
We often hear the term Chain of Command mentioned in terms of how corporates need to have well defined rules for who becomes the decision maker when the CEO or the Chief Executive Officer is unable to or barred from leadership responsibilities.
For instance, when the news of the alleged scandal pertaining to fraud and siphoning of money by the disgraced founder of Indian Software firm, Satyam Computers, Ramalinga Raju, broke out, immediately, the next level of leadership of Satyam Computers, assumed charge and addressed the media to assure that Business Continuity Plans were in place and the Crisis Leadership models were activated.
Similarly, when the IT (Information Technology) bellwether, Infosys, was faced with a similar situation in 2017, the Chain of Command was activated and the regulators and the shareholders were kept in the loop as far as further action and who assumes the decision making powers were concerned.
Therefore, for effective Crisis Leadership and to activate the Business Continuity Plans, Chain of Command structures and models need to be defined and specified so that Corporates are ready when crises hit and they have to continue as usual.
How the Term Originated in the Military and Why It Became Popular Down the Ages
The Chain of Command is essentially a Military Concept as in the battlefield, there needs to be a clearly defined division of roles and responsibilities as well as a well defined model of who leads from the front in case the Commander is incapacitated.
For instance, if an Army Unit goes into combat, there is every chance that the Colonel or Captain or the Commanding Officer can get hurt or suffer fatality.
In such an eventuality, the rest of the unit needs to know who they should follow so that they keep fighting.
This is the reason the Military worldwide have clearly defined Chains of Command that help them in continuity planning and combat readiness.
While corporates may have the luxury of time (though in recent years, Crisis Leadership models are activated in hours), the Armed Forces have no such advantage as the Chain of Command needs to be activated within minutes or seconds.
Assume that you are at the border and engaged in combat. If your leader falls, you should immediately know who to turn to or who to follow as otherwise; you are finished in no time as well.
This is where a Clear Chain of Command helps.
What are Passing the Buck and the Consequences When the Chain of Command Breaks?
Having said that, it is not always the case that the Chain of Command functions like a Well Oiled Machine.
There are umpteen instances in both the Corporate world as well as elsewhere where despite having Clear Business Continuity Plans, Crisis Leadership was found wanting.
For instance, the handling of the Present Pandemic by many governments worldwide, including India, has been characterized by poor leadership and weak chains of command.
More often than not, during this pandemic, we have seen how political and bureaucratic leaders have failed to Step Up and Rise to the Occasion, and instead, try to Pass the Buck.
Remember this phrase as it epitomizes how Corporates, Governments, and any organization for that matter, can fail to function during crises when exemplary Leading from the Front leadership is needed.
This happens mainly because the assigned Leaders do not want blame for failures and hence, they pass on the responsibilities down the line or to other underlings.
It is sad to note that more often than not, Passing the Buck, has serious and severe repercussions for the organizations as well as its stakeholders.
More so, when human lives are involved, and then this becomes an avoidable human travesty.
When Second Line Leaders are More Effective and Why They Must be Celebrated
On the other hand, there are plenty of examples where the Second in Command proved to be better than their First Line Leaders in times of crises.
While these instances do not get the requisite media attention, such standbys who performed well when thrust into leadership positions during crises need to be lauded and their names and deeds remembered.
This was the case during the Second World War when many nations fell back on the deputies of the leaders in crunch situations.
This also reinforce the argument that all organizations need to draw up clear plans and paths of decision making that can be activated during crises.
More so, in these times, when Work from Home models have made us dependant on Virtual Communication instead of Physical Chain of Command interactions.
Employees need to know whom they should contact in case of emergencies and hence, the present crisis is a Clarion Call for Leaders of all Stripes to delegate as well as decentralize decision making.
When crises erupt and decisions need to be made within seconds, there is no time to waste thinking who is the Decision Maker.
This means that quick thinking and flexible leadership models are the need.
Despite our Technological Advances, Leadership is Human
Last, while we can talk about the wonders of the Digital Age, one also needs to remember that Chain of Command is essentially a Human Construct and as such, depends on human nature to make it successful.
So, despite all our advances in technology, Crisis Leadership is as old as human history and hence, what we need are excellent People Managers in all organizations who can Rise to the Occasion.
To conclude, Chains of Command can break under pressure and hence, what corporates need to do is to build effective Second Line and Third Line leaders who can step up.
Authorship/Referencing - About the Author(s)
The article is Written By Prachi Juneja and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.
- Crisis Management - Introduction
- Types of Crisis
- Crisis Management Model
- Crisis Management Plan
- Crisis Communication
- Crisis Management Team
- Ways to Overcome Crisis
- Managing Stress during Crisis
- Role of Employees in Crisis
- Role of Leaders in Crisis Management
- Why Organizations need to Communicate Effectively During Crises
- Chain of Command, Business Continuity Planning, and Crisis Leadership in Corporates