4 Examples of Management By Crisis

John Spacey, April 18, 2020

Management by crisis is a style of management whereby a manager is disengaged until a problem happens at which point they aggressively manage the situation. This is generally viewed as a poor practice but may have some defenders, particularly as it applied to risk taking enterprises such as startups. The following are illustrative examples of management by crisis.

Management by Exception

Management by exception is the practice of putting in place processes, systems and procedures to reduce the work of managers to handling exceptions. Such exceptions are viewed as too obscure and random to systematize. For example, a hotel that has standard operating and customer service practices whereby a manager only steps in where something is going wrong to handle things such as customer complaints. This is a reasonable approach to management that implies a high degree of organizational maturity.

Mushroom Management

Mushroom management is the poor practice of failing to support employees but then strictly disciplining them when something goes wrong. For example, a hotel that fails to implement training and processes for customer service but then harshly disciplines staff when a customer is dissatisfied.

Reactive Mode

Reactive mode is when an organization or team is constantly flooded with problems such that they have no resources to work on preventative measures to reduce the flow of such problems. This typically stems from structural problems such as broken systems, processes and culture. Such structural problems result from poor management but once they occur talented managers may also have trouble correcting the situation.

Last Responsible Moment

Last responsible moment is the practice of delaying decisions and actions until they need to be committed. This is typical of an aggressive risk taking environment such as a startup whereby a team is always working on their most important opportunity or pressing problem. Such teams never waste resources on theoretical risks that might occur 10 years from now. However, they tend to be extremely productive, creative and high throughput such that they can fix problems quickly nonetheless.

Management by Crisis vs Crisis Management

Management by crisis is the practice of dealing with problems only after they occur. This should not be confused with crisis management, the practice of managing large scale problems such as disasters. Crisis management includes a planning and preparation phase whereby a firm builds up resilience to potential crises.

Overview: Management By Crisis
Type	Management By Exception
Definition	A style of management whereby a manager is disengaged until a problem happens at which point they aggressively manage the situation.
Related Concepts	Management By Exception » Management Style » Mushroom Management » Negative Culture » Last Responsible Moment » Risk Taking »