Corporate crisis exposure in turbulent times

With the turbulent unrest in the Middle East - from Tunisia to Egypt and reaching Jordan, Lebanon, Sudan and Yemen and the current situation in Libya - international corporates and governments become intensely aware that doing business in these countries does require proactive crisis management planning.

As an organisation sends more of their personnel onto dangerous ground, so the security threats, as well as business threats, widen.

Some companies work with international security organisations to monitor security issues in overseas countries and to maintain a watch on evacuation readiness. Many of these security organisations can provide emergency assistance in the event of civil or political unrest. Some even provide specialist services in hostage negotiation and security supported evacuation.

The fact is, as the threats change or escalate, so they need to be prepared for. Assessing the threat and its response is a priority.

It depends entirely on the kind of business you do and where you do it and, to some extent, how you do it, that predicts the threats that may need to be considered in the dynamics of your crisis response.

There is no doubt that damage can be minimised to overseas offices if those offices take their threat identification seriously and review what things could go wrong.

Some of the most common crisis threats at overseas locations are:

• disruption to operations
• change of government attitude or policy
• industrial action
• economic collapse and devaluation
• lawlessness and hostile demonstration
• transport accident
• fatality
• fire or explosion
• environmental damage
• serious bad weather (hurricane, typhoon, flood, tidal wave, fire storm)
• medical emergency
• epidemic

Less common threats, but those that might affect the short and long term prospects of the company, are:

• terrorist activities
• sabotage of plant and operations
• kidnap for ransom
• violent assault
• confinement or imprisonment of employees and families
• extortion
• contamination of product
• drug trafficking
• murder of expatriates
• cessation of commercial international flights

You cannot have a plan for every crisis. You cannot create a plan for ever threat. But preparing a set of basic plans and training for dealing with the most likely problems gives you a chance to get ahead of the problem. Having the decision making checklists to make sure you have covered off the things that have to be done could save lives and protect your brand and reputation internationally.

Anna Bligh - world leader in crisis management

In Australia's worst floods in living memory, unique crisis leadership inspired a nation. The performance of Queensland's Premier, Anna Bligh, represented a global benchmark in managing and controlling the urgency of the crisis response against a background of a devastating, escalating statewide emergency.

Delivering an informative and compassionate performance that leapt ahead of leadership responses to recent crises such as the Gulf of Mexico oil spill, New Orleans Hurricane Katrina and even Australia's own Beaconsfield mine disaster, Anna Bligh stepped forward as the steadfast face of the flood. She led with a message strategy that clarified what was happening and how people would be affected. Rudy Giuliani delivered a similarly focused performance during the response to the 9/11 terrorist attack on New York.

Anna Bligh's response, supported by her senior police and emergency services heads, was much more than spin and her audience knew that. Confronted with a rapidly changing and terrifying environment, she showed understanding of the situation and delivered strong motivational messages to take the high ground and stay there. "The weather may break our hearts, and it's doing that, but it will not break our will, and in the coming weeks and coming months, we are going to prove that beyond any doubt," she said.

Her insightful leadership delivered an orderly and efficient transition from normal to emergency conditions. In the regular two-hourly press conferences, she showed consistency in action, and importantly, what she said under-promised and over-delivered. The internet chatted and twittered with praise and admiration for her as she presented a true picture of the situation to Brisbane and rural Queensland. Virtually every television and radio network suspended regular programs and went live and on the spot as they broadcast the depth of the deadly flood waters destroying people's lives, livelihoods and homes.

There was a strange, uneasy similarity between President Bush during 9/11 and the Australian Prime Minister, Julia Gillard, in this crisis. So many of their stilted appearances during the crisis high points were wooden, robotic and lacking sensitivity and vision. The lesson here is there is room for only one clear leader, and once that post has been established, presidents and prime ministers have to be comfortable with second place and show it.

Now as the waters subside and the recovery starts, Anna Bligh displays a new phase of her leadership, focusing on recuperation and revival. She appears to be deliberately avoiding a political media circus and rules out an early Queensland state election to capitalise on her now popular position. "My commitment to the people of Queensland is this: 2011 is a rebuilding year. 2012 will be an election year, not 2011," she said.

Future recovery will be a telling time for Anna Bligh, who may well be judged now on how successfully the state of Queensland is revived and rebuilt. Britain's inspirational war-time leader and Prime Minister, Winston Churchill, lost the election in 1945 as Britain struggled to recover.

Qantas explosion communication

Qantas has just come through one of the toughest critical events in the airline's history. The airline has handled a mid-air explosion with professionalism, speed and sensitivity. One of Qantas' Airbus A380's four Rolls Royce engines failed in flight, not far from Singapore, on the way to Sydney. "I just heard this massive bang like a shotgun going off," a passenger said on Australia's Nine Network news. "Part of the skin had peeled off and you could see the foam underneath. Pieces of broken wire sticking out." The aircraft landed safely in Singapore and all 459 people on board were unhurt.

A strong message of incident control was delivered rapidly across the media about the escalating situation, first by the aircraft's Captain, and then by the CEO to qualify the facts. Qantas made sure the passengers got a chance to tell their story.

Qantas Captain, Richard Champion de Crespigny, was given accolades for his communication skills and the way in which he explained the incident on board. When the engine exploded he spoke to the passengers immediately. "I do apologise. I am sure you are aware we have a technical issue with our number two engine...I am sure you are aware we are not proceeding to Sydney at this stage...the aircraft is flying safely at this stage...thank you for your patience."

In fact part of the engine had come away and torn through the left wing. Indonesian media showed Facebook pictures of debris that had fallen from the aircraft onto an island. Qantas has grounded its fleet of A380s as safety regulators and investigators from Rolls Royce and Qantas carry out tests to determine the cause.

Alan Joyce, Qantas' proactive CEO, moved forward with the company's response. "This was a significant engine failure," he told a press conference. "We are not underestimating the significance of this issue."

Earlier this year, Alan Joyce told Business Review Weekly: "We have a fairly refined crisis management team and crisis management process, probably more so than many other companies. It’s what my predecessor, Geoff Dixon, calls the ‘constant shock syndrome’. We plan on a steady state and then we plan scenarios and risks around that.”

Qantas has never had a fatal accident and there have been no fatal accidents involving the A380.

Chile rescue crisis high ground

The Chilean miners are safe on high ground after one of the most intense rescues in modern mining history. Thirty three men safely recovered after 68 days of critical and dangerous recovery. The government of Chile can stand proud in the knowledge that it achieved a dynamic process of crisis management response and leadership. In short, they under-promised and over-delivered.

Chilean President, Sebastian Pinera, and the Minister for Mining, Laurence Golborne, took the high ground in taking control of rescue operations and leadership. They delivered the status of the rescue accurately and transparently. A very different result to mining disasters like Sago in West Virginia where a tired, washed out CEO gave the news that 13 miners were alive, and a short time later it was announced that 12 people had died and only one had survived. The Chilean example of crisis leadership also differs greatly to the confusing response to the devastating Hurricane Katrina and more recently the BP oil spill.

The keys to the success of this crisis outcome relate very much to the Chilean government having a focused crisis plan and communicating proactive, clear messages to essential stakeholders. The first and most important audience were the miners and the community, and the government placed them at the centre of their communication strategy. The government's candour with the mine's employees and community increased its credibility with a massive number of global media. Credibility translated into fair treatment and respect for the rescue process.

Key points in handling crisis interviews

After 20 years of orchestrating, rehearsing and attending media interviews at real or rehearsed crises, I am convinced that spokespersons delivering media interviews in times of critical events need to be prepared to deliver concise answers quickly and effectively. They need to show leadership and agenda control. In these days of the instant news grab, long-winded statements are useless.

Here is my hit list for handling crisis interviews and taking the high ground:

• Take time to rehearse your key messages.
• Do the interview sooner rather than later.
• Avoid sit-down interviews. Stand up and deliver.
• Give the right facts before they suggest the wrong ones.
• Start with a statement of sympathy and understanding.
• Link your actions with those of the authorities.
• DON’T TELL LIES.
• Stay calm and positive. Show you are in total control.
• Get your main points across at the start - live interviews are fast.
• Be brief in all your answers.
• Correct any introductory misinformation or negative statements.
• Don’t respond to rumour or innuendo.
• Finish the interview before it finishes you.
• Tell them you will return soon and give them more.

Managing crises overseas

The growing interest in investment abroad means that many of the world’s largest companies are continually moving into new areas offering a broad range of opportunities.

Growth for US and UK companies in oil, gas, mining and construction continues, as do the areas of manufacturing, telecommunication, retail and financial services. The fastest growing new development areas are China, South America and Eastern Europe.

As companies go global, the threat to the security of people, technology, information and assets gains in impact. Doing business in foreign countries does have crisis connotations and can mean a life or death difference for an organisation.

Dealing with the problems of a changing political arena, threats of bribery, sabotage, vandalism, theft, having to deal and negotiate with irrational customers in distant locations, being faced with problems of armed intrusion or trespassers and the growing international problem of drug abuse, are all threats that need to be recognised and planned for.

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

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.