How do you handle a crisis in government? Start with contingency planning, then get ready to take your blinkers off

By Richard Bolt

Monday June 24, 2019

Richard Bolt

RICHARD BOLT: THE COALFACE Readiness is essential to managing a crisis, but there are limits to its effectiveness — and history shows we often fail to anticipate events that haven’t happened before

A crisis inside a government can have devastating results. Regardless of its cause — usually some adverse combination of nature, politics and administration – there can be terrible consequences.  Families, businesses and even economies may fail. Property can be destroyed. Lives can be lost. Governments can be brought down. Officials’ careers can be prematurely ended.

With this range of potential outcomes, it makes obvious sense to plan to prevent or at least mitigate crises. But no matter how sensible that sounds in theory, the daily demands of work can crowd out preparations for these events because they are so unlikely to happen — even if, logically, they could be catastrophic. Which is precisely why it’s critical to build them in to your schedule.

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In one portfolio I have led, the department prepares thoroughly for emergencies as core business. The threat of animal and plant diseases to agriculture has spawned a strong system of people, facilities, plans and exercises to ensure we are vigilant and proficient in dealing with outbreaks. Foot and mouth disease has never infected Australia’s livestock herds, yet that scenario is periodically rehearsed. There are so many pathogens in nature’s catalogue, and so much economic value at stake, that generic arrangements to tackle them all is unquestionably a good use of public funds.

But while readiness is essential, there are limits to its effectiveness. History shows that we often fail to anticipate events that haven’t happened before, or haven’t been as severe before. The result is often the most damaging crisis. And we don’t have to look back very far to find some awful examples: the Global Financial Crisis was sparked by the cavalier growth of a new class of financial instrument, while Black Saturday set new benchmarks for the ferocity of a wildfire.

When an unanticipated crisis happens, responses have to be invented. And sometimes they have to cut across the normal operation of government. The floods which hit Victoria in early 2011 had no precedent in collective memory, so the standard disaster recovery arrangements had to be augmented. New partnerships were formed across State departments together with the three levels of government and the community, to deliver assistance to farmers and regional communities.

“I learned the hard way that reform-induced crises can be avoided with serious engagement with affected parties.”

From 2006 to those 2011 floods, crises became the new normal of my working life. These included the millennium drought, an abalone virus which moved slowly along the Victorian coastline, a collapse in the Yallourn open cut coal mine, equine flu which forced a national horse standstill, a fire in the Hazelwood coal mine which subjected Morwell to a month of smoke, power shortages in the 2009 summer, controversy over Victoria’s smart meter rollout and, most devastatingly, Black Saturday – a painful personal experience given my oversight of powerline safety.

This extraordinary succession of crises rewired me to expect the unexpected and to design solutions from first principles instead of reverting to a conventional response. If there are organisational boundaries or program rules that prevent you from helping people affected by a crisis, then improvise and figure out how to take the barriers away and get it done.

It’s critical that you lead from the front — and from the start. If agencies need to refocus suddenly on a new challenge, leadership must drive that. Executive teams must get together and get their hands dirty in mobilising a new effort and troubleshooting the multifarious issues that inevitably arise. As we all know through experience and observation, early mobilisation creates confidence among stakeholders and elected officials, not to mention the media and the public..

Importantly, crisis management should not be a Wild West exercise based solely on the ends justifiying the means. Consultation is essential and decisions must be properly authorised. The goodwill and dedication of the various organs of government has always made this possible in my experience. And the collaborations forged in these watershed moments can have a lasting benefit when the crisis is over.

An example of this arose from the 2011 floods, when the northern wall of the Morwell open cut coal mine became risk of collapse, which would have taken a section of the Princes Freeway with it. The cause of the instability was a long groundwater drain that was leaking water into the wall. A dispute between the mine owner and the local government over who was responsible for the drain threatened to cause a dangerous delay in fixing it. I negotiated that the repairs be done by the mine owner and that the dispute over responsibility be resolved afterwards. A fundamental difference of view was set aside to protect a vital public asset.

A crisis that results from shortcomings in administration is, in some ways, more challenging than one caused by nature. The rollout of digital and remotely-read (‘smart’) electricity meters before the 2010 Victorian election became controversial due to cost increases and opposition, mainly from elderly householders on health and privacy grounds.

The lesson was that we should have better communicated the rationale of the rollout, and given unwilling customers the right to opt out even though there was no evidence for their fears. It took a change of government for that lesson to be absorbed and acted on. The taint remained, even though the rollout was completed and the right results, including saving lives from electrocution, were achieved. I learned the hard way that reform-induced crises can be avoided with serious engagement with affected parties. This doesn’t just mean listening, it means acting, particularly by giving people agency and compensating benefits.

This lesson was applied to an emerging community concern that about the ‘Skyrail’ project in the summer of 2005/6. Skyrail involved the removal of three adjacent level crossings in south-east Melbourne by elevating rail tracks for more than a kilometre. A concerted engagement program was set up to communicate the project and work out how to help its neighbours at reasonable cost. A voluntary purchase scheme for homes next to the line meant that families who wanted to sell were not trapped by the unwillingness of the market to buy during the construction period.  A fund was established for recreational facilities under Skyrail, chosen by a community committee to make the new open spaces inviting and useable.

Perhaps the reason that Australia has avoided the worst of the northern hemisphere backlash against globalisation is that careful management of the impact was the hallmark of policy, particularly under the Hawke government. It will be vital to take a similarly pragmatic and adaptive approach to the decades-long transition to a low-carbon economy. But whatever approach is taken, Australia’s political oscillation between naïve optimism and cynical denial is a recipe for repeated crises.

In summary:

  • Public service leaders must regularly make time to prepare for emergencies.
  • Leaders need to involve themselves early in a crisis to mobilise and coordinate the response.
  • They should be prepared to implement novel and collaborative solutions that cut across the normal operations of government.
  • Early engagement with communities can avoid or reduce the severity of crises, as can affording compensation and/or agency to affected parties to mitigate adverse impacts.

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Chris Johnson
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