Chinese Journal Review: Crisis Management in the Internet Era

Greetings. In this edition, I’ve provided a summary of an essay published in December 2019, written by Xu Xianping, a Counsellor to the State Council, regarding best practices in crisis management, published in the State Council-affiliated Management World journal. Management World published this piece before the coronavirus would later so quickly spread, but the essay is relevant to events unfolding today. A translated summary of that essay is below.

Also, a couple of updates: Going forward, these newsletters will be shorter (maybe just 1-2 summaries per newsletter), but the frequency will increase from monthly to biweekly. If readers like that model, I’ll explore whether it then makes sense to increase to 1x/week or not.

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Finally, if you found this online or if someone forwarded it to you, please subscribe. This newsletter summarizes research published in top Chinese-language academic journals on topics in foreign policy, economics, technology, and international development. 

In this edition:

  • Crisis management in the Internet era

Title: Crisis Management in the Internet Era (互联网时代的危机管理:演变趋势、模型构建与基本规则)
Journal: Management World (管理世界)
Author: Xu Xianping (徐宪平), Ju Xuenan (鞠雪楠) 
Publication Date: December 2019

In December, Counsellor to the State Council Xu Xianping and Central University of Finance and Economics Researcher Ju Xuenan published an essay in the State Council-affiliated Management World journal to help decision-makers in government and business better respond to crises. (Note: This piece was published one month before the coronavirus outbreak.)

They write that the Internet has changed crisis communications. The Internet makes it faster for news (and rumors) to spread, easier for anyone to share information, and more possible for people to interact with their news and newsmakers. Major natural disasters, safety accidents, and social movements are often first reported through mobile phones, making ordinary people not just passive news consumers, but also collectors, producers, and disseminators of information. In the Internet era, news of one crisis can create a domino effect, triggering more crises. Internet portals, Weibo, WeChat, and other media give users the ability to reproduce news with commentary, as well as distort facts that can negatively affect public opinion.

In 2015, for example, in the immediate aftermath of major fires and explosions in Tianjin, officials responsible for crisis response did not address the public. The local media was also silent in its coverage of the fires. This fueled online speculation about who was responsible, triggering strong public condemnation and creating a new, second crisis: a lack of government credibility.

Crises are usually predictable, the authors write. Behind every major aviation accident, for example, there are usually many warning signs missed along the way. The best way to prepare for a crisis is to identify potential threats in advance, make personnel aware of them, establish internal crisis-warning systems, and have crisis-response plans ready. These plans should include information about who assumes overall command and control and who responds to which elements of a crisis. Crisis-response training should be the norm. Organizations should also consider the wide range of potential threats, including accidents, terrorism, social movements, environmental pollution, hacking, regulatory failures, and technology failures.

When responding to a crisis, leaders should make decisions quickly and decisively. This helps them control the narrative. They should also be sensitive to public opinion and the media, as well as be willing to make changes in their approach as the situation evolves. Temporary measures adopted during a crisis response can be socially and economically disruptive, so care should also be taken post-crisis to heal this trauma. For example, to learn from mistakes and regain the public’s trust, leaders should consider having authoritative third parties conduct postmortems, investigate a crisis’s root causes, and then recommend next steps. In this sense, leaders should seek to turn crises into opportunities.

The authors then list 12 rules for effective crisis management in the Internet era:

  1. Maintain calm and be resolute. During a crisis, the public is often in a state of shock as the amount of information on the Internet and in the media can be overwhelming. In spite of this, leaders should remain calm.

  2. Put people first. The first goal is to minimize loss of life, injury, and mental anguish. The second goal is to mobilize people. People working together can unlock initiative and creativity to solve problems. To mobilize the masses, leaders should assert full command and authority.

  3. Leaders must be visible. They should get to the front lines of the crisis to gather as much first-hand information as possible. Subordinates need to see leaders calmly in command. Crises are most worrying when there appears to be a lack of leadership or a decision-making vacuum.

  4. Remember the golden hours. In most crises, the first four hours are the most important for shaping public opinion (the authors write that before the Internet, this was 24 hours). The first 72 hours are the most important for saving lives during natural disasters such as earthquakes.

  5. Lead the media, don’t follow it. Information should be released to the media in a timely manner. This gives leaders more credibility. In the beginning of a crisis, especially during the first press conference, be honest and do not mislead the public. The goal should be to win the trust of the people. Every word, action, and gaze will be subject to public scrutiny.

  6. Listen to other key stakeholders. During a crisis, it will be essential to enlist the help of important stakeholders also affected by the crisis. Identify who they are, determine their core interests, and try to satisfy them. When there are conflicts of interest between two different stakeholder groups, collective interests should come ahead of individual ones. Good communication with stakeholders is paramount.

  7. Be prepared to use unconventional ways to address crises. For example, it may be necessary to abandon traditional, vertical leadership hierarchies to create more flat organizational structures.

  8. When one crisis creates new crises, proactively fight against those crises, too. In some cases, this may require a leader to fight fire with fire and, in other cases, to adopt a more accommodating approach.

  9. Remember that the goal during crisis response is not to pursue the best results, but to avoid the worst outcomes. Leaders should therefore prioritize imposing temporary measures to control the situation first, before they can solve the root problem.  

  10. Act within the law, even during times of emergency. Restrict behavior as needed, but do so fairly and within the bounds of what is legally appropriate. Adopt measures that fix the crisis, prevent future crises, reduce damage caused by the crisis, and safeguard social order. Absolutely do not invent lies or create false explanations to explain the causes of the crisis.

  11. Be flexible. Understand that, in times of crisis, leaders make decisions with what information they have available at the time. Crises are unique times when decision-makers have limited information and scarce human resources, so be open to change as information changes and the situation evolves.

  12. Always be alert. “Do not turn a blind eye to plumes of smoke.” When crises start at lower levels, many people may not realize that a crisis is brewing, and will be inclined to underestimate the problem. Leaders should take initiative to pay attention to small details, analyze clues, and prevent crises at the outset.

Note: The State Council publishes Management World journal. Xu was the former deputy director of the National Development and Reform Commission and a vice governor of Hunan Province. He is a professor at Peking University’s Guanghua School of Management.