Crisis management

Mark Ostow

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Y: You’ve been through many crises at Yale. Could you pick one and talk about the key steps you took?

L: In 2006–7, there was an extensive federal investigation of our management of scientific research grants. It followed an earlier small-scale audit that raised a concern with cost transfers—expenses billed to one grant but transferred to another. This practice is often innocent, but it can sometimes be an effort to spend government money on purposes not authorized by the particular grant, rather than return a balance to the government at the end of a grant period.

In response to the first audit, we began a major effort to strengthen our grant administration. But a year later the university was served with subpoenas on behalf of three federal agencies. I realized from the beginning that my role was to set the right tone. Working with our vice president and general counsel, we assembled two dozen leaders within 24 hours: the provost, the dean of the medical school, and those responsible for finance, auditing, compliance, legal affairs, and public relations. I made it crystal clear that we were to cooperate fully with the government, identify all problems, and take remedial action to accelerate and complete our upgrade of practices and systems right away. The provost, the vice president and general counsel and I then met with the remaining deans and department chairs to indicate that we intended to use this crisis to develop best-in-class practices. Everyone responded positively.

After thorough investigation, we were able to negotiate a very reasonable settlement with the government. I believe that we were able to do this in part because of our vigorous response. For example, our software had required that a single grant be charged for the initial purchase of a piece of equipment or a shipment of chemicals, even if the equipment or material was to be used by more than one project. So we changed our software, making many cost transfers unnecessary.

Y: SOM professor Thomas Kolditz, a retired brigadier general, says good leadership in crisis does not include motivating. Everyone is already very motivated, and trying to motivate may just scare them.

L: You need to remain calm and straightforwardly describe the task at hand. Hitting the panic button is not helpful. This is true of very different crises also—such as extreme weather events. We have to make all kinds of adaptive arrangements, assess damage, and make quick repairs when health or safety is threatened. In emergency management, Yale is best in class.

In anticipation of Hurricane Sandy, for example, we set up an emergency operations center at the Yale police station. We took over the training rooms on the second floor, where a team of about 40 people worked on questions such as: how do we protect scientific experiments from power outages? How do we protect library materials from flooding? How do we make sure that students have enough food in their rooms, in case they cannot go outside?

Y: What have you learned from crisis?

L: That my role is to state strongly what our values are, and to set the tone for how we tackle the problem. Many crises could become public relations disasters—and some of them do. But, in my view, we have to do the right thing regardless. Yale must be a beacon of good behavior, a place that stands for light and truth.