01/22/2013 10:57 am ET Updated Mar 24, 2013

Leading Through Diversity: Resilience in Crisis

I have found that corporate crisis leads to four principal emotions among all those involved. A sense of denial comes first -- the reasons ranging from conspiracy theories to false information. Then there is the shock: this is when the numbness and disbelief sets in. Third is shame, leading to withdrawal from co-workers, family and social groups. Last comes anger, when one is confronted by a sense of betrayal and shame. These are all areas I am familiar with, as today my organization has been successful in rebuilding its reputation, three years after large-scale financial fraud was perpetrated by its former chairman.

It also comes with the territory, then, that I should know a little about building resilience in organizations. As I see that Dynamic Resilience is the theme of this year's annual meeting of the World Economic Forum in Davos, now seems a good time to expand upon this.

So, how do companies augment human resilience to a level where malpractice is anathema? First, it's essential to create a corporate culture wherein ethical conduct is valued, and a working ambience in which employees and stakeholders can be in no doubt that management is acting with the utmost integrity.

Also important is to restore belief -- at all levels. Walking the straight and narrow path is not always easy, so a whistle-blower policy is essential to enabling stakeholders to raise actual or suspected violations and, once such a policy is shown to have substance, act as a deterrent.

Communication and training are also key. Broad-based, concerted campaigns (and research) become a bridge for employees to generate confidence and a sense of purpose for continuity, while simulated issues of conflicts of interest and other dilemmas in the workplace can provide black and white examples for those with lingering uncertainty on how to observe the code of conduct.

When we sought to rebuild our organization's reputation, we considered five principles to drive change. These are; to embrace the new normal; question the status quo, innovate at all levels; balance experience with experimentation; and encourage risks -- after all, failure is the currency of success.

By challenging the conventional thinking in this way and deploying resources, we have been able to drive positive change for our stakeholders. But while leadership, delegation, information networks, teamwork and strong public service are crucial to crisis management they can also lead to paralysis by analysis if they are not accompanied by strong decision-making.

Every company needs to build up a corporate structure and environment that fosters "strong and quick decision-making," sometimes after proper analysis, otherwise intuitive. Mishandling a 'reputational crisis' may have a serious impact, so we must all be prepared for the risks that the changing world and technology bring about.

It's not always easy. In today's world, reputational crises can occur with lightning speed, fed by the ease with which information travels, increasing the inter-connectedness of our global economy and a relentless 'more for every buck' ideology that is a challenge as much as an opportunity for organizations.

Above all, resilience is an individual's tendency to cope with stress and adversity. You may be surprised at what you can achieve. We certainly were: my organization, which was reeling only three years ago, today leads the Group A stocks at the Indian National Exchange and is back doing business, nationally and globally, with its head held high.