Developing a Crisis Consciousness

Crisis Planning

(First in a series of three articles on Crisis Planning, Crisis Management and Recovery from a Crisis)

Crisis management requires a proactive state of mind, an ability to accept that things can go wrong very quickly and the unchanging desire to stay alert.

A crisis is not in the first instance a communication problem. It is a corporate problem with technical and functional components that should have been anticipated. In very rare cases it is an occurrence beyond the control of the company. Crises that occur through lack of anticipation and are then mismanaged through lack of planning are misfortunes, which the company calls upon itself. Lack of crisis planning constitutes criminal corporate negligence. Anticipation of crises and planning in advance for their management are not one-time business activities. They need to be undertaken at least annually and ideally at quarterly intervals. The reason for this is that many types of crises are linked to changing external situations and shifting public expectations.

 Planning for crisis management begins with the anticipation of all possible risks that a business could face in the short and medium term. Significantly new thinking on crisis management indicates that all employees must be made aware of the vulnerabilities that business faces. The more aware and involved the workforce, the more committed it is to ensure that crises are avoided. 

The first step in planning for crises is to create a crisis management team that can be given the responsibility to lead the company through the entire process of planning, management and recovery. At the minimum this team comprises three persons: the CEO, Head of Legal, Head of Corporate Communications/Public Affairs. Others who should be involved on a regular basis are the COO, Head of Marketing, Head of Manufacturing and HRD. Other specialized functions can be invited to join as required.

The main responsibilities of the crisis team are to: conduct a risk assessment audit, create a risk impact matrix, prepare response strategies for all identified crises, arrange for senior management crisis training, including training to manage the media and to prepare and keep current the crisis management manual. These audits  are not just one-time activities. The crisis team must decide at what intervals they would need to be repeated. The danger here is that the more successful the planning and preparation process the higher the level of complacency that is likely to develop. 

Risk audits look at three things: the probability of an occurrence happening, how likely is it that this kind of a crisis can hit us; the severity of the occurrence, just how badly will we be hit if this crisis happens; and the company’s current ability to eliminate or handle the occurrence if it happens.

Broadly speaking risk assessment needs to cover situations under the following heads:

  • Top management: death, scandal, firing of top brass, sudden changes in leadership, management misdemeanors
  • Organizational: sacking of staff, controversial hires, employee unrest, employee death and accident, trade union activism, sale of facilities,  lock out, strike, government action, regulatory negligence
  • Financial: accounting irregularities, SEBI inquiry, bankruptcy, mergers, acquisitions, taxation issues, investor activism, poor performance
  • Technical: technology breakdowns, technical hazards, dangers posed to stakeholders
  • Environmental: pollution, mismanagement of effluents, ecological degradation, local community disregard

 This is not a definitive list and each company will need to decide areas to audit given the nature of the business and external challenges.

The second step in the crisis planning process is to sort out vulnerabilities into high impact and low impact. Experience has shown that there is a class of vulnerabilities that requires very high-level strategic business decisions to fix at a very high cost. There are others that need localized adjustments at minimum cost. And there are a host of others that fall somewhere in between. Each of the scenarios and worst case situations identified as posing medium to high risk to business must be given clear response strategies.

And this is where Communication enters as a key element in the strategic framework.

A well-prepared crisis plan identifies largely though not exclusively, the following:

  • Procedure to activate the crisis management team
  • Notification procedure for all concerned including external groups such as local and municipal authorities
  • Crisis phases for each scenario
  • Reporting procedure during each crisis, frequency
  • Communications flows for each crisis scenario
  • Communications statements and key messages
  • Media management plan for each scenario
  • Names of key journalists
  • Contact details for key personnel
  • Database of other authorities to be informed or approached

This information is consolidated into what is commonly called a crisis management manual. Its content run somewhat as given below:

  • Response flows – technical and communication – for each identified crisis scenario
  • How to set up a crisis center, if the crisis is likely to run for a period of time
  • How to keep a record of media enquiries
  • How to log the progress of the crisis
  • Contact databases for team members, media and other external agencies

We know that the worst fear companies have during a crisis is how the media will react and how aggressive or destructive they are likely to be. Much of this can be eliminated if there are open lines of communication with the media and the team is clear about the two or three key messages that need to be put out for any crisis. These should be determined in as much detail as possible in advance so that when the incident occurs no time is wasted in giving the media what they want. 

Companies that have good crisis plans are those that are willing to look at their weaknesses and vulnerability with brutal honesty. Remember that the public threshold for tolerance on these matters is narrowing fast. As consumer sophistication grows and the right to information plus the right to a fair exchange of value become entrenched, companies must know that they can get away with anything. And now with social media channel offering somuch more opportunity for comment litigation is the least of a company’s problems. There ispotential here for overnight destruction of reputation.

 Mahnaz Curmally Senior PR Counsel

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