Crisis! - What Crisis?
As a director, or executive of a company, nothing will keep you awake at night like a good crisis!
A crisis can take many forms. Read your favoured newspaper or electronic media source on any given day and you’ll see reports of organisations in some form of crisis.
There’s no perfect template or standard one size fits for when a crisis takes hold. It could be white-collar crime, or workplace health and safety, or appalling corporate culture, or product liability, or natural disaster, or a privacy breach, or a host of other foreseeable and unforeseeable events.
It doesn’t really matter what the source of the crisis is – the end result is at least a disrupted night’s sleep! But usually it’s much more.
Depending on circumstances, civil and criminal penalties for both the company and individuals may be possible, reputations will certainly be on the line, and possibly even the continuing viability of the organisation itself will be at risk.
So … what do you do?
If you’re responsible for managing a crisis there are some actions which you should take to help mitigate the impact, irrespective of the source of the problem. A good place to start is well before the crisis event occurs.
There are really three distinct phases in good crisis management:
Pre-crisis phase
Crisis response
Post-crisis phase
Pre-Crisis
Planning is the luxury you can afford before a crisis arises. Use the time well!
An effective risk management system can identify many of the events which can become a crisis. Systematic risk identification and mitigation action can minimize the potential for a risk to crystallise. For example, if there’s a risk of public liability claims and criminal charges if a piece of equipment fails and someone is injured or killed, then it’s prudent to have an appropriate maintenance schedule for that equipment and effective training for its operators. Such controls would help prevent a crisis because catastrophic failure or human error is less likely to occur.
One important aspect of risk management to be considered is insurance. It may be possible to consider crisis management insurance for risks or events which the company would not otherwise be able to survive. There should be at least one company representative who understands the full range of insurance cover available for the company, and the circumstances in which claims can be made.
However, it is also wise to assume that something unforeseen could occur. This is where a Crisis Management Plan will be invaluable. Assume that a worst case scenario does occur and develop a plan to address that scenario. Identify a crisis management team with appropriate skills and experience, ensure that they have suitable delegations to deal with a crisis if and when it occurs, and train them on what to do in the event of a crisis. To take the above example of a crisis arising following a failure of a piece of equipment resulting in injury or death, assign responsibility for dealing with first responders and the victim’s family, for communicating with staff and other stakeholders, for reporting to authorities, for managing the business implications, for addressing media interest, for dealing with social media etc.
Once you have a crisis management plan you’re happy with, conduct regular exercises to test the plan and familiarise your team with their responsibilities. Be prepared to update the plan in light of experience, changing staff roles, new risks etc.
It is also prudent to use the time before a crisis to prepare things such as policies, procedures, statements, template content material etc. This type of preparation would ideally involve input from professional advisers such as insurance and legal representatives. This reduces the risk that technical problems arise when the crisis is underway, such as, for example, the content you develop leads to an inadvertent admission of liability. Depending on available internal resources and the types of risk identified, there could be a need for professional media and public relations advice, so it’s a good idea to have trusted relationships in those types of services. It also saves you the number one resource you will be unlikely to have, time.
It’s good practice to have your crisis management team e.g. lawyers, crisis consultants, public relations advisers etc. noted on your insurance policies or approved by your insurer. Should a conflict arise, you want to make sure you can use your people, that know and understand your business.
Crisis Response
Initial response to a crisis is critical. When you can rely on a good crisis management plan it’s much more likely you will have an effective response.
Irrespective of the type of crisis which has arisen, it is important to respond quickly, accurately and consistently. Have a priority hierarchy clear in your plans – in the example referred to previously it’s more important to focus on the victims and their families rather than revenue! In general terms, safety is the top priority, followed by reputation, then revenue.
Good planning will give you the benefit of being able to control your messages and communication channels. Depending on the incident, you may need to work closely with Government Authorities, organisations like ambulance, police and WorkSafe, and there will potentially be external interest from news channels. In regulated industries, there may need to be a reporting function to the regulator within specified timeframes.
In the changing social media world today, it’s becoming increasingly important to control your messaging. This includes content and the channels you use to get your message out. If you’re caught flat-footed without a coherent response and message, you and your organisation will be exposed to a risk that significant reputational damage can be done without your involvement.
There are both proactive and reactive aspects to managing the crisis. For example, there may be social media interest, so it’s important to keep all information accurate and consistent:
Proactively, you need to ensure that statements are correct; and
Reactively, it’s important to correct any misinformation or inaccuracies.
Post-crisis Phase
As the dust settles it’s an important aspect of crisis management to begin reputational repair. Continuing empathy and care for the victims and their families would be a good first step!
Any promises given in the course of the crisis response must be met. To take the example used throughout this paper, if a promise is made to retrain staff in the operation of a machine you must make sure that training is given.
There may be further external investigations e.g. WorkCover, and it’s an important part of crisis management to co-operate with such enquiries. Obviously participation by legal advisers would be part of that process.
It’s important to deliver information and content to stakeholders in a timely and consistent way. Update stakeholders in recovery efforts, such as investigations, corrective actions and system improvements. How this is delivered will be dependent on circumstances, but thought can be given to using the company’s social media platforms.
As time goes by, critical root cause analysis of the circumstances and events leading up to the crisis can be undertaken. The company’s risk management system can be reviewed to incorporate any lessons which have emerged from the crisis. It will also be an ideal time to review the crisis management plan, and adjust as necessary to pick up the lessons which emerged from the actual crisis.
Summary
Burying your head in the sand is not a feasible strategy in crisis management!
Some forward planning can help identify problems before they emerge and mitigate their impact. Time spent preparing for any potential crisis before the event will pay dividends when responding to the crisis.
Learning lessons and incorporating them into the organisation’s operations will help improve performance and protect its reputation.
As the person responsible for managing all of this, you will be able to get a good night’s sleep!