Subject: What to do when employee mistakes threaten an organisation's survival?

My first reaction to this episode is that it is perfect demonstration of chaos theory. Chaos theory is the mathematical theorem that is often explained by the analogy of, ‘The beating of a butterfly’s wings in Africa sets off a typhoon in California’. Chaos theory operates all around us and trying to pin down every eventuality in a charity’s rules and processes is a self fulfilling recipe for disaster; mathematicians and economists try to propose all embracing theorems to explain organisational behaviour with spectacular failures at the national and micro-economic level. Mercedes is guilty of over confidence in her organisation, she’s proud to “Start the new year shipshape!” and fails to predict that some ‘butterfly would beat its wings’.

Inevitably it happened and the butterfly’s wings were beaten by Jocelyn muttering: “It was something about her weight” that was overheard by Camilla and the typhoon is the loss of 65% of Millcaster Aid’s income at a stroke.

So what should Mercedes do? I would do the following in her shoes;

1. Tell Jocelyn she’s been incredibly stupid and then get her to help put things right. Refuse her resignation, don’t get her to write to Camilla but put her to work to prepare a special report for ReadyBix about the fantastic influence that their support is having in Africa.

2. Remember her own strengths. Mercedes is popular with Clive who is the ReadyBix Chair, “We’re the flavour of the month with Clive”. Use this relationship.

3. Telephone Clive and invite him to join her for a cup of coffee to ask him for some advice.

4. When face to face with Clive explain the critical nature of the ReadyBix donations to Millcaster Aid and ask him if he’s ever had to deal with a ‘butterfly’s wings’ type of problem. He is sure to have had them.

5. Then ask him how to ‘sooth’ Camilla’s righteous indignation; he is her husband after all.

6. Jocelyn’s report will be the icing on the cake when Clive can tell Camilla just what a lot of good ReadyBix are doing; no apology will be needed from Jocelyn.

7. Remember chaos theory; no organisation can be ready for all the knocks it will get.  Chief executives must build organisational resilience and this takes leadership and not endless processes and rules.

PS there is some pretty good theory on how to build organisational resilience out there. Can anyone reading add some references?

What a great answer Patrick -

I think it is great credit to the writers that I found myself being annoyed about Mercedes defeatism in the light of the email from ReadyBix - had to remind myself this was only a story.

Of course Camilla should start using this great relationship that she has with Clive to recover the situation,  and if he is personally sponsoring another project then surely he would not jeopardise the success of that too.  

If the email was curt then Mercedies may not know from ReadyBix the reasons for them cutting the relationship and it might be worthwhile treading carefully rather than assuming.

There was a good charity talk last year about working with Major donors and I would recommend the videocast and especially Jeff Shear's talk:

http://www.cass.city.ac.uk/cce/newsevents/CharityTalks/video1.html

One thing that strikes me is the point raised by DeniseFE  is that we are not told what was in the "curt email". Let's  suppose it is not actually explicit at all about the cause of the grant withdrawal. Jocelyn has immediately assumed it is about the overweight comment. Surely part of any manager's job (and especially a CEO)  is not to jump even to the most obvious conclusion. It is not unknown when a serious problem occurs for middle or junior managers to build up, under personal stress, a picture of what has gone wrong that bears no relation to reality. For all we know the company and/or Clive may have some profound crisis of their own? 

So Mercy has to get on the phone or fix a meeting soon with Clive to establish the facts.

Even if Jocelyn did make the ill advised comment and even if the company cite this as the major cause of withdrawing their sponsorship (and I have to accept that they may be unlikely to cite it in reality), not sure there are sufficient grounds for dismissal; not sure that recklessness in gossip is quite the same as gross misconduct.

Agree then with MAKEADIFFERENCE's list.