Building morale in a situation like this can be challenging, but is obviously a concern that needs to be addressed quickly before the mistakes become habits. The exact techniques you use will depend heavily on the personalities of the team members, the one thing that is absolutely necessary is a post-mortem of the event to find out why it happened, how the team reacted and what worked and what didn't in terms of the responses.
There are two prime opportunities here. One is to boost morale by highlighting what the team did well. The other, which is even more important, is to re-engage the team by taking the failure points identified in the post-mortem and working on solving them as a group. This is also a great way to boost morale as it demonstrates your confidence in their abilities and helps them see that their skills are useful and relevant despite the recent incident. Another added benefit: This kind of session demonstrates to upper management that the team is taking the incident seriously and is addressing the problem to prevent further occurrences.
Also, working on realistic, relevant drills of similar incidents can help the team regain confidence. Drills are a hallmark of any good incident response system as they not only keep the team's skills sharp, but they also proactively identify missing planning and execution elements before these elements come up in a real event. Likewise, sending all or some of the team to appropriate training (particularly if it addresses a need identified as a result of an actual incident) is a great morale builder. It shows that you as a manager/company have a vested interest in the employees and their future performance.
Sometimes, however, all it takes is getting the employees offsite to a restaurant or other fun location for a few hours to give them a chance to vent and burn off some stress.
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This was first published in December 2008