Sunday, June 17, 2018

CRISIS IN OR OUT OF CONTROL


How often have we heard the expression “this is completely out of control”?



A crisis of any magnitude can hit an organisation where it hurts without a moment’s notice and it doesn’t take long to lose control.  The only protection is a well-rehearsed crisis management plan.

In a matter of minutes, a serious incident or emergency can run out of control and seriously disrupt a business with catastrophic effect.  In some cases, it takes years to recover.

The right response actions can minimise serious damage and can quickly put an organisation in control of its destiny.  Management needs to consider the organisation strategically and ask what is the worst thing that could possibly happen.  Fire, financial problems, lawsuits, cyber crisis, product defect, sexual harassment, act of violence, terrorism, security breach, technology collapse, executive misconduct or environmental issues to name a few.  With the most likely threats in mind, management can prepare strategies to avoid or manage a potential problem and control the agenda.

Reading between the lines in today’s media reports of crises, it is easy to see which organisations have anticipated the problem and have a planning process in place to deal with it.  If an organisation is ready, then there will be a clear message about what is being done and who is doing it.  

It is not just large organisations that need to have comprehensive and integrated crisis management plans.  All organisations need to anticipate crises.  It is so important that small and medium-sized organisations look at their worst case scenarios - the service industry, government, educational institutions, professional firms and research organisations.  They often face the greatest damage from a negative event because they may lack the financial and managerial support required to respond and recover efficiently.

Ownership of crisis management planning must come from the top because most crises end up at the top.  The top global executives recognise that crisis management is a corporate governance strategy and endorse its implementation.  They know that a crisis out of control is liable to lead to loss of profits, lawsuits, loss of market share,  serious loss of reputation and, in many cases, loss of senior jobs.  After writing numerous plans for organisations, I am totally convinced that unless complete support of the Chief Executive and top management is assured, the crisis management program will flounder and never reach its currency.  The day the Chief Executive or Managing Director endorses the organisation’s intentions to install a crisis management program is the day it really happens.





Wednesday, January 24, 2018

2018 – Are you ready to manage your crisis?

In a matter of minutes, a serious incident or emergency can run out of control and seriously disrupt a business or organisation with catastrophic effect.  In some cases, it takes years to recover.




The right response actions can minimise serious damage and can quickly put an organisation in control of its destiny.  Management needs to consider the organisation strategically and ask what is the worst thing that could possibly happen.  Fire, financial problems, lawsuits, product defect, sexual harassment, act of violence, terrorism, security breach, technology collapse, executive misconduct or environmental issues to name a few.  With the most likely threats in mind, management can prepare strategies to avoid or manage a potential problem and control the agenda.

Reading between the lines in today’s media and social media reports of crises, it is easy to see which organisations have anticipated the problem and have a planning process in place to deal with it.  If an organisation is ready, then there will be a clear message about what is being done and who is doing it.  

It is not just large organisations that need to have comprehensive and integrated crisis management plans.  All organisations need to anticipate crises.  It is so important that small and medium-sized organisations look at their worst-case scenarios.  The service industry, local government, educational institutions, professional firms and research organisations. 

The simple questions I would ask any organisation related to crisis management are:

  • what is the worst-case scenario that could hit your organisation?
  • what is the most inconvenient time for this to happen?
  • do you have a plan to deal with it?
  • who will lead your response?
  • can you contact your key stakeholders rapidly?
  • where will you manage the response from?
  • have you identified ways to continuing to run your business?
  • what are your short-term and long-term recovery goals?      
The keys to successful crisis management are fast, strategic response from top management, accuracy of information, putting people first and protecting brand and reputation. Credibility in crisis means being ready to handle the worst-case scenario.



Wednesday, October 25, 2017

Volcano Crisis


The potential eruption of a volcano in a popular tourist area is a crisis that require decisions of great consequence to be made on the basis of rapidly changing information, often under extreme time pressure and frequently under the intense scrutiny of the travelling public and social and news media.



This escalating threat is facing the island of Bali in Indonesia at the present time. Mount Agung has been in the initial stages of eruption since early September. Over 100,000 people have been evacuated. Mount Agung last erupted in 1963, killing 1,000 people. Millions of people travel to this idyllic tourist destination each year.

Bali emergency authorities and the Indonesian Government have worked to reduce the risk of the eruption on residents and tourists through effective emergency and security response. Clearly they have developed policies and procedures necessary to resolve the problems related to an imminent disaster.

I was on the island a few weeks ago and was impressed by the knowledge locals had about plans and preparations for evacuation response. I was highly impressed with the polite and well-prepared updates on dampening down the fear and concern visitors to the island may experience.

This is one of the communications delivered to my hotel room not long after my arrival:

Dear Guests,

Bali is still safe for tourism.

The volcano has not erupted and there is no volcanic ash.

Mount Agung is 72 km. from Seminyak and 32 km. from Ubud. Flights in and out of Bali’s international airport remain normal.

Even if the volcano erupted, it would not affect aviation unless there is volcanic ash.

Nine alternative airports have been prepared for diverted flights. 300 buses will be available to transport travellers to ferry ports.

Bali tourism is safe.  Do not trust misleading news.”

This crisis could arrive at any time:  and it could come at any speed.  It can strike without warning and destroy people and property. It is through planning that an island like Bali can anticipate and reduce the impact of that crisis and hopefully preserve its tourism identity and brand as being a safe place to be or to come back to. Bali is prepared.


“BY FAILING TO PREPARE YOU ARE PREPARING TO FAIL" – Benjamin Franklin.                                                                    

Thursday, July 13, 2017

CEO Action Checklist

During the Second World War, Britain's Prime Minister, Winston Churchill, took constant naps at the peak of his performance in the War Room, deep beneath London. Leadership in a crisis can only be achieved if a leader is prepared to keep a flexible and rested mind. 

Having a single-minded sense of purpose from a leader signals an organisation that is ready to deal with the worst. So what does the CEO need to consider in the face of a major crisis?


·     The primary role is to provide corporate oversight and direction on resolving the problem and to minimise the impact on the corporate reputation, the community, employees, assets and share value. 

·     Immediately, it is important to confirm the real situation.  Getting accurate facts is sometimes difficult when the pressure is all around, however analysing the facts and identifying objectives has to be a key corporate consideration in the early stages.

·     Two streams of action are needed - one to manage the crisis response and one to manage the daily business.  Life goes on, and although a crisis can stop an organisation in its tracks, business resumption is essential and part of the immediate recovery process.

·     Take into consideration at all times the corporate position. Confirm the message strategy and make sure that one spokesperson is giving a clear, consistent message right across all stakeholder audiences. The CEO should take the role of spokesperson if the situation is critical.

·     Research how the crisis is affecting the company’s audiences.  Qualitative research can be very important here.  Engaging research to monitor attitudes to the response can be invaluable on the road to recovery.

·     Be prepared to lose business and market share initially to gain maximum results in your response.  (Johnson & Johnson withdrew the Tylenol product in the US after the extortion poisoning, initially losing market share.  They repackaged in tamper-proof packs under government supervision and quickly regained brand reputation and market share.)

·     Take the initiative.  Be prepared to tell it as it is.  Show the stakeholders what you are doing and why you are doing it.  Emphasise and speak in language the community understands.  Clarify information rather than promise results.

·     Don’t let lawyers slow down the crisis agenda.  Take good legal advice but avoid being gagged on disclosure.

·     Importantly, don’t lose control of yourself or your temper.  Overreaction can cause confusion in the response process and a lack of confidence in the direction.  There will be dramatic changes in information and they have to be dealt with responsibly.

·     Keep a close eye on your competitors.  They will use your crisis time as an opportunity.

·     Get on top of your financial audience before they are lead by business analysts, academics and financial journalists.  Help the financial analysts, the banks and your insurers understand that you are on top of the issues and controlling market vulnerabilities.

·     Enlist industry and government support.  Make sure your industry and the government understand the seriousness of your problem and do all they can to support your recovery.
  
·     Most of all, think ahead.  Use lateral thinking to both interpret unintended consequences and how the business may finish up.  Direct your recovery team to start building bridges and repairing reputation now.

As Winston Churchill said - "we know it will be hard; we expect it to be long, we cannot predict or
measure its episodes or its tribulations".





Wednesday, April 12, 2017

Managing Bad News to Employees in Crisis

Employees and families must be told of a crisis first and fast.  Responsible crisis planning requires management to report on the importance of a critical situation to every level of the organisation quickly and efficiently.  

Rumour and innuendo need to be controlled with the same efficiency that an emergency crew uses to deal with a fire.  And it means a level of communication that many managers may not have applied before.  Sensitivity and strength of message will produce positive results.

In a world of social media, “tell ‘em nothing” or “we’ll let them know later” is a certain recipe for disaster.  Addressing employee issues first will enlist an army of support.  In the case of a company that is going through a major accident with fatalities in the workplace, the first people the media will seek out for information are employees.  If employees have a clear idea of what has happened, then facts lead the story instead of scandal and hearsay.

Employees form their own opinions quickly.  Will the crisis destroy the organisation and will they have a job?  Is the company responsible?  Having a plan of action in place to address employees’ concerns enables a company to move the message to its other stakeholders with the confidence that the whole organisation understands the situation.  It also assists in the recovery and business resumption process because employees are more willing to return to a normal work environment.  Also, if people are better informed, they are considerably more willing to assist in getting the company back on track again.

This is a highly sensitive communication area, and should be handled by company executives where company personnel are involved. 

Certainly there are trained counsellors who understand exactly how to approach the sensitive problem of communicating bad news.  This tragic and sensitive job is often handed to a young police officer who is usually ill-experienced and ill-prepared to present the bad news to a family. 

Neither is the police officer prepared to cope with what might follow in terms of a serious emotional response, physical collapse or at worst, an asthma or heart attack.

A lesson from a woman in a distant mining town who tells the story about a policeman waking her from a deep sleep in the early hours of the morning. 

Upon opening the door and recognising the local officer, he presented the news to the half-awake recipient: “Sorry to tell you that your daughter’s been killed in a road smash near the town and I’ve got to get back there fast”.  

The policeman had his job to do and couldn’t be in two places at once so he left the highly distressed and shocked woman to deal with this tragedy on her own, alone. 

She waited for the morning to come, and after pulling herself together, walked through the local supermarket looking for some contact with the people of the town. 

The few people in the supermarket avoided her with deliberation.  They had heard about the story but did not have the ability or the strength of mind to face this woman.  It wasn’t until later that day that real help arrived on her doorstep - some of the wives of the mining community got together and gave her the support that should have come hours before. 
 
It is law in most countries that the police are required to notify families regarding a fatality first. But this should not be left only to emergency services personnel, or, even worse, by way of news broadcasts, to deliver the bad news.  Companies need to send their own management team to employees' homes or the hospital to support police and emergency services regarding an accident in the workplace. Management training on counselling techniques should be undertaken.  Qualified counsellors should assist in the training process.  The following are suggested guidelines:

·                 Develop the message so that it is delivered sensitively.
·                 Two people should attend when delivering bad news.
·                 Deliver the message as quickly and concisely as possible.
·                 If possible do not allow the receiver of bad news to go to the scene of the incident.
·                 Arrange as soon as possible, monetary, welfare and counselling assistance. 
·                 Stay in contact with victims after the incident.

Remember employees and victims’ families must be told about crises first and fast. The first question media will ask is – “have you informed your employees’ families”? What will be your answer?



Wednesday, February 22, 2017

Readiness for global office crises

A crisis in another country often does not fit into any known framework.  The organisational response, therefore, has to deal with the problem of finding people to manage the problem at the same time as anticipating the escalation factor and providing support for the most exposed aspects of the business.

There is simply little time for planning, organising, equipping or training once the crisis is imminent. 

Importantly, the crisis management approach needs to ensure that the various operations and projects of an international operation are in a constant state of readiness and that crisis teams know what to do and how to do it.

Basically, the objectives of any plan should be to protect the company’s people and assets.


International operations crisis management objectives:

1.      Protect the life of employees and their families.
2.      Protect assets and earnings by restoring normal operations rapidly.
3.      Protect the local community and environment.
4.      Minimise damage to corporate reputation.
5.      Retain effective relationships with government of the country

Because international business management and employees could be cut off for long periods from the parent company by failure of communication lines, it is important that teams are trained in advance to follow prescribed guidelines in their crisis response. The way in which the crisis is tackled will depend on the quality of training and briefing for the crisis teams before the event. 

The plan needs to clearly establish authority and responsibilities at every level.  It is useful here to define mobilisation actions and list contact points with details about communication links and notification procedures.  

Interfacing with external agencies is an essential part of crisis planning in other countries because the crisis management response may well include support systems from embassies or law enforcement agencies. But this interface with expected support from your embassy or consulate may not be reliable and needs to be confirmed well in advance of an incident.  Setting these communication links up in advance is vital to the success of the plan.                 

The plan should contain details of the organisation's team roles and responsibilities, setting out the core action group at each location who are responsible for managing the problem.  It will be their responsibility to assess the situation and respond accordingly with the necessary resources required.  They will also need to contact and communicate other teams in the region and the necessary stakeholders affected, including Head Office in the home country.

In some cases, the crisis management team may only be one or two people. This is particularly the case for small offices, exploration, research or transport teams working in far distant locations.  It is still important that these teams have an understanding on how to pinpoint a crisis and what on-the-spot actions they have to achieve to protect life and ongoing operations.                   


Tuesday, December 20, 2016

How to Lead in a Crisis

In this borderless world, crisis events escalate within minutes and threaten the most complex companies and organisations. Whether it be an exploding phone, fraud at one of the world’s largest banks, a disaster in an amusement park or an act of international terrorism - high level management preparation, through a Crisis Management Plan, is vital, particularly for CEOs, corporate boards or government administrations. 



If crisis management is to be taken seriously and installed efficiently, it must come from and be part of the people who run the business.  After all, in the end, it is those people who will have to manage the crisis when it reaches its most ferocious point.

The corporate crisis plan has to be part of company good governance and policy and those who are involved in its creation, instalment, and ongoing delivery, need to have their accountability listed in their job description.

A crisis plan must be simple and easy-to-use.  People have less time and less attention span to be confused by long-winded, long-worded, jargon written instructions.  The plan needs common language that simply and easily identifies the goals and objectives, the methods of delivery and implementation, and the ongoing evaluation and continuity.  

Accountability is essential.  Senior management personnel must be given the time and the authority to be accountable for the ownership of this plan.  Once a senior manager is given the responsibility of validating a crisis management plan, he or she should be supported and assisted in the review by a dedicated, professional outside crisis management consultancy.  This should not be a PR or emergency management consultancy but more a provider focused on delivering a strategic process.

A crisis management budget needs to be set and approved.   Some organisations may prefer to link the crisis management budget with the legal or risk management function.  Others may associate it with good corporate governance and build it into the corporate affairs and public policy area.  Some may prefer it to be associated with company secretary or corporate finance. Manufacturing companies may link their crisis management plan with their marketing and product recall function. 

The crisis management plan must be capable of application at every office, branch, site, and location.  Just as Head Office has a role to play in managing corporate and business crises, so do divisional offices, branches, plants, and major sites in managing the same responsibility on the spot.  When a crisis happens, it must be handled quickly where it happens.  If the location or site is not given the authority to act, valuable time will be lost and ultimately the control and the agenda may move to another negative party.

Every crisis plan needs to have a maintenance process.   It must be acceptable to internal auditors, outside auditors, senior management and endorsed by the Board of Directors. 

Education of team members and support groups needs to be an ongoing process.  Once the Team Leader and core team members have been familiarised with their roles and responsibilities, it is necessary to test and review these functions regularly.  Most teams are tested at least one or two times a year with either a desk-top exercise or full-scale simulation. 

Every crisis team at every location will rely enormously on resources.  Control room facilities such as whiteboards, IT connections and telephones, are all part of the resource kit.  

At RCA, our professionals are recognised experts at installing, developing, and maintaining corporate crisis management teams. We are routinely asked to provide counsel on escalating issues and crises.