Crisis security for business abroad

The worst nightmare for a company is knowing that its people and assets are under siege in another country. And as anyone who has been in this situation can confirm in the midst of an escalating incident, it is the most emotional time for affected individuals and families.

Ironically, some of the methods of doing business in foreign countries designed to save money can actually put an organisation’s whole presence in that country at threat. For example, setting up a plant in an area where labour is plentiful but transport is difficult, can put security pressures on executive staff who are managing the project. They can be at risk from local criminal and political instability or their families can be at risk from the problems they may face travelling on dangerous roads.

The key to crisis management in this foreign business environment is the development of a plan that adds local knowledge and expertise to help manage the threats. Coming to terms with the most efficient response to a crisis or emergency will depend, to a great extent, on the reliability of the planning and preparation that takes place beforehand.

In a recent experience in an Asian country going through severe political change and instability, a large transport company had attempted to set up an emergency evacuation structure for their people. They were working to deal with the threat of terrorism or the possibility of politically motivated kidnapping. In certain parts of South America and Asia, there is a continuous problem with short term kidnapping for fast financial gain.

In some Asian countries, there is rarely a day that goes by where there is not some reference to a financial deal done with terrorists related to a kidnap situation.

In this case, the company was slow in putting together guidelines for protecting the organisation against potential problems. A number of employees at the company had decided to take a plan into their own hands. They decided that if their families were the victims of kidnap for ransom or any form of terrorism, they would create their own group of negotiators and deal directly with the kidnappers.

Their fear was exacerbated by an incident where the wife of one of the employees was threatened by a chauffeur driving their children to school. She fortunately was able to take control of the vehicle and drive her family to a safe situation. Her husband, with other expat friends, formed a local response group to deal with the situation, which led to a violent retaliation that involved company, government, police and consular officials. The situation did get out of control and the company was the loser. If they had a tested response plan there in the first place, the security threat would have been easier to deflect and control.

Finally, management stepped in and set up a formal crisis management plan that prescribed a security policy and offered guidance to ensure a state of pre-emergency readiness.

They worked with a private international security company to reduce the risks through a security program that identified the company’s exposures to problems in that region. Greater intelligence was gathered to ensure an understanding of the threats and appropriate measures were taken to protect the management and staff, but also to ensure continued operations.

Doing business in countries with unstable political structure calls for proactive crisis management.

Product recall crisis fatalities

Not planning for a product recall escalating to crisis leaves a corporation, its brand and reputation extremely vulnerable. We have seen this in massive pharmaceutical, automotive, food, children’s toys and even pet food recalls.

No-one can forget the shockwaves that came out of the Tylenol Paracetamol cyanide poisoning in Chicago back in the 1980s when two mothers, two sisters, a bride, a 12 year-old girl and a stewardess all died from deliberate poisoning. The product crisis was immediate and tragic. Johnson & Johnson recalled Tylenol and, working with the Federal Drug Administration, developed a tamper-proof package for redistribution at a cost of $150 million.

Globally, there is a tightening of product safety controls. Regulators are looking for thorough, fast response to recalling a faulty or contaminated product in terms of consumer contact and recovery of products. The fact is, incidents of product recalls escalating to crisis are occurring with greater frequency than ever before.

Corporations need to establish crisis teams that can respond fast to a critical product recall. Threats need to be identified in advance. Product recall processes need to include a crisis trigger.

Deliberate contamination or threats to a product that might kill or injure are crises that require the immediate involvement of law enforcement agencies.

Running regular product recall and integrated crisis exercises will anticipate and deflect or reduce the impact of the worst case scenario.

Demise of crisis management planning in top corporations

BP's massive oil spill in the Gulf of Mexico; the deaths of leading mining executives, all on one plane in Africa, and the resignation of a major retail CEO in the wake of sexual harassment claims - the crises keep coming. And the management of these critical events is under the microscope. What is the brain of these corporations doing to ensure crises will be managed?

BP continues to struggle with the crisis management of, and recovery from, one of the world's worst environmental spills. This is long after the global learnings that came from the Exxon Valdez oil spill in Prince William Sound, Alaska, and the devastating Piper Alpha explosion in the North Sea. The BP oil spill carries with it major safety concerns related to response capability, ongoing communication problems, particularly from the CEO, and an early loss of stakeholder trust from the general public to the US President. An extraordinary response from a company that in 1989 was at the forefront of international crisis management planning.

The deaths in a plane crash of the Sundance Resources mining executive Board in remote Africa is a tragic crisis. Debate continues regarding the gigantic risk of so many key personnel flying together on one aircraft. Not only a loss of life but a serious loss of intellectual capital and corporate leadership. This event occurring only months after the catastrophic Polish air crash that killed 96 VIP passengers, most of whom were part of the Polish Government, including the President. Both these disasters needed to have been mitigated against in pre-crisis planning.

Sexual harassment, another high-level threat to corporations, is at the centre of the shock resignation of retail giant, David Jones CEO, Mark McInnes. He acknowledged that he committed "serious errors of judgement". The resignation led to $81 million being wiped off the market value of David Jones. As The Australian newspaper reported: "The resignation and the reasons given are unprecedented in corporate Australia". A parallel to this is the recent top-profile resignation of the CEO and President of Penguin Canada, David Davidar, who quit his post and later admitted that the publisher had sacked him after a sexual harassment case was filed against him by a former female colleague.

High impact, low probability critical events are a reality, and high-performing corporations must be prepared to face these events with a proactive and well-rehearsed strategic crisis management response. This requires a continual review of best-practice crisis management planning and should be an essential ingredient of an organisation's corporate governance.

Cutting crisis management chaos

Deciding on the structure and composition of a crisis team on the day of a crisis simply does not work. Effective performance during a crisis relies very much on team members' prior understanding of their roles and responsibilities in responding to an escalating event.

Organisations that know what to do, who is going to do it, and in what sequence, are more effective during a crisis. A prepared organisation can respond faster and better with reduced decision making time. Cooperation between team members enhances effectiveness and this experience through pre-training, discussion and planning will increase response.

A crisis team that is used to working together under clear leadership moves into their operational function with a more positive approach particularly in chaotic situations. Shared knowledge of the team organisation produces a capability far greater than the sum of individual members.

Crisis prevention is not enough

In an ideal world, most crises can be prevented and there are many risk-based solutions in place to achieve this. Some crises can be prevented through better warning systems, improved safety standards, regular risk and threat analysis, strategic issues management, best practice emergency and security standards and efficient product recall.

But certainty seldom exists. Crises will erupt to disrupt and destabilise an organisation. Prevention is not the only cure, and one thing is for certain - a strong, tested crisis plan can control the chaos when it happens.

It takes years to build a successful organisation and only minutes to pull it apart. Containment is the key and with a crisis plan, you can.