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Is your crisis management plan good enough?

Is your crisis management plan good enough?

Originally posted on Raconteur by Nick Easen.

The aftermath of a global corporate scandal is a very messy affair. Firstly, there’s the breaking news, then the media frenzy, the plummeting share price, the evaporating confidence, the damage-limitation exercises and finally the groveling executives. We live in a super-charged, hyper-connected environment, answerable to the 24-hour “churnalism” cycle and social media chatterati. Boeing, Uber, Nissan, Huawei, Airbus or Purdue Pharma, to name but a recent few, have all had to step up like Winston Churchill to their darkest hour. “Crisis management can be like dealing with an explosion,” explains Jo Willaert, president of the Federation of European Risk Management Associations.

Be quick, honest, open and, in such circumstances, be compassionate in communications, these are the key principles of crisis management

And with any explosion, corporate or otherwise, everyone ducks away from the line of fire for fear of getting hit. Damage limitation can trump open communication. Slow and myopic group-think can stymy a crystal clear, crisis management plan because the stakes can be excruciatingly high and the fallout unthinkable. No one really wants to spark the next Lehman or Enron crisis. It would be career suicide.

Why do companies need a crisis management plan?

“Be quick, honest, open and, in such circumstances, be compassionate in communications, these are the key principles of crisis management,” says Julia Graham, deputy chief executive of Airmic, the UK’s risk management body.

Yet time and again these messages don’t seem to permeate the rarefied air of boardrooms or the upper corporate classes, and it shows. Whether it’s Boeing’s chief executive taking a week to respond to the fatal Ethiopian Airlines crash or BP’s boss Tony Hayward making a quip during the Gulf of Mexico oil spill saying he “wanted his life back”. The rapid, heartfelt response to an incident is as crucial today as it was ten years ago.

“An actual crisis is a pressure cooker and no time to start working out roles, responsibilities, and processes for your management team. Yes, Mr. Hayward apologized quickly, yet the damage was done and here we are almost a decade later still talking about it,” says Marc Cornelius, founder of 8020 Communications, a specialist public relations consultancy.

At the heart of every response is an effective crisis response plan. Businesses are most resilient when they’ve already considered what to do if the worst happens and if all executives understand the roles they need to play. A risk manager co-ordinates decision-making teams that need to be multi-disciplinary, with all business functions represented, since they see situations from diverse angles.

“For instance, a classic tension can exist between legal and marketing perspectives: saying very little might theoretically limit your potential liability, but will the consequent damage to your brand end up costing you more long term? You can bet those functional tensions would have been going on recently within Boeing,” says Mr. Cornelius.

Why strong leadership is crucial in crisis management 

Time and again though companies are caught up in a crisis storm that is hard to weather. Facebook had its Cambridge Analytica moment, while Monsanto had to deal with a customer allegedly contracting cancer from its weedkiller, then there was Exxon’s reaction to the Alaskan oil spill, the list goes on. The lessons that can be learned are legion. Each event is unique and complex.

Rupert Younger, director of the Oxford University Centre for Corporate Reputation, thinks we need to go beyond our preparation manuals, rehearsals, box-ticking exercises, and well-documented crisis management plans, and instead, create more of a wider culture of being able to respond to crises.

“Smart companies should spend as much time listening as talking, empathy, and humanity are crucial. Each stakeholder has to feel well informed and properly looked after at all times, and internal teams need to be organized and focused on this,” says Mr. Younger.

One thing that a lot of crisis experts agree on is the crucial role that executive leadership plays in dealing with a crisis. Like the logjam over Brexit, markets and corporations look for certainty, any perceived loss of control, lack of solutions or uncertainty can cause real harm, especially in the early stages of an incident, and a lot of direction comes from the top.

A responsive C-suite is the new imperative, especially when key executives are increasingly being held accountable if their company is not able to respond to a crisis. Look at various governments’ response to the live-streamed mosque attacks in New Zealand and their crackdown on social media companies for showing harmful content, from Australia to the European Union, including the UK.

Sound risk management leads to greater trust

When management could be personally liable for these crises and fines could reach as high as 4 per cent of global turnover, as is the case under the EU’s General Data Protection Regulation, it’s enough to make any corporate board, from Twitter to YouTube, rewrite their crisis management plans and think twice about how they respond.

“Yet events usually outpace responses and without preparations or expertise at the table, leadership can find themselves frozen as they watch things unfold. The organization needs to be clear on who takes the lead in efforts to restore the confidence of the public, clients, employees, and investors,” says Erik Petersen, head of crisis management consulting in Europe at Control Risks.

“The issue is that leaders will often be required to make decisions with insufficient information. It can take days or sometimes longer to get facts or understand the nature of the problem, while stakeholders will demand immediate answers and response.”

The fact is most of us trust corporations around the globe without knowing what kinds of systems they have in place to deal with risk, safety, and incidents that involve people’s lives, health and wealth. We eat, fly, drink, drive and consume various products from countless companies that we put our utmost faith in. The question is, can we really trust them?

“Companies that manage risk well tend not to face crises of their own making,” says Sandra Sucher, professor of management practice at Harvard Business School. “In my research, I’ve found a close association between sound risk management and being trusted. Risky actions lead to mistakes of many kinds, and we mistrust, with good reason, companies which don’t seem to appreciate the consequences of their mistakes and fail to anticipate the risks that things could go wrong.”

Why you cannot ignore crisis communication management

Another aspect that’s crucial is crisis communication and the language used. “It is arguably becoming one of the most important elements of damage limitation in an era where harm to brand and reputation is the greatest part of the impact,” says Mr. Petersen.

Increasingly, big corporations value the role of crisis communications, they also understand that it’s a specialized skill either to be cultivated in-house or via an outside consultant who knows the business well and is on call. “Those organizations that don’t value communications, do so at significant risk,” says Kelli Matthews, senior instructor at the School of Journalism and Communications, University of Oregon.

Many crises that whip through the media are hardly binary affairs, they are infinitely complex. The key is to make these issues simple and communicate in plain, unambiguous language. “This can be really challenging,” says John Martin McDonald, founder of Caeli Communications. “As Mark Twain once said: ‘I didn’t have time to write you a short letter’. But you must make the effort and do it throughout the crisis.”

Reputational damage may be significant, if not permanent 

All this underplays the role of the risk manager, yet they are a crucial go-to person in any crisis. They have a pivotal role to play since the impact of a crisis can touch many facets of a business from customers to shareholders, affected communities to supply chains.

“The professional risk manager serves as a coordinator across many functions that need to be involved in a situation like this, both for the manufacturer and the airlines in the case of the Boeing crisis,” says Typhaine Beaupérin, chief executive of the Federation of European Risk Management Associations. “The risk professional will also play an important role in managing the complex insurance issues that will inevitably arise as a result of a crisis.”

It’s not all doom and gloom. Many businesses can be resuscitated over time. “A company’s reputation is not earned overnight and, usually, not lost overnight,” says Marc Szepan, a lecturer at the University of Oxford Saïd Business School.

But beware, a recent study by The Economist of the eight most notable corporate crises since 2010, including those at Uber and Wells Fargo, found that the median firm was worth 30 percent less today than it would have been had the scandals not occurred. Ouch.

Risky business: Keeping employees safe in a world of emerging threats

Risky business: Keeping employees safe in a world of emerging threats

Recently, I had the chance to spend some time at Walt Disney World in Orlando, Florida, when I attended the NAMIC conference in February. One session included a presentation by Barry Dillard, director of claims for Walt Disney World, where he shared the company’s approach to handling a wide variety of claims.

I sat down with their vice president of risk management to learn about some of the strategies they employ, and I had the opportunity to tour Walt Disney World itself to peek behind the curtain and see how this massive theme park creates the magic for its guests and cast members while keeping everyone safe.

Believe it or not, the Walt Disney World Resort covers 40 square miles and is twice the size of Manhattan. Within its confines, this world-class attraction employs 75,000 cast members, each of whom plays a critical role in spreading the Disney magic. Their emphasis on safety is both taught and caught, which is especially important when serving the millions of guests who visit the Disney attractions around the world.

The Walt Disney Company is extremely proactive in their risk management strategies — it truly is everyone’s responsibility — not just the realm of those at the corporate level. As is often the case in life, the simplest things can make the biggest difference. Merely walking the parks, hotels, shops, and restaurants can yield valuable information, allowing cast members to identify small issues before they become larger ones. Even in one of the most magical places on earth – reality tends to intrude.

Unexpected risks arise every day and training plays a key role in mitigating them. Hackers are constantly devising new ways to access company information or hold it for ransom. The use of ransomware is expected to increase 350% this year, so being vigilant and backing up data has never been more important.

The number of shooting incidents in businesses and other settings is increasing at an alarming rate. Knowing what to look for and how to respond in these situations can literally be the difference between life and death.

For better or worse, new risks are changing our behavior — how observant we are in open spaces of our surroundings, what we post on social media, where and how we protect our personal information, what we open online and how we train our staffs. It really is the smallest things that can make the biggest difference in keeping people safe.

Author: Patricia L. Harman

Source: PropertyCasualty360

6 Essential Tips for Getting Through Any Nonprofit Crisis

6 Essential Tips for Getting Through Any Nonprofit Crisis

Is your nonprofit ready to be tonight’s breaking news?

You don’t even have to be guilty of something to become the daily news. Bad things happen even to worthy nonprofits.

During my nonprofit career, organizations I have worked for have experienced a client’s death; a product tampering that threatened the biggest fundraiser; an athletic scandal; and a mass shooting on campus.

We learned the hard way to be prepared or prepare to suffer more than necessary.

Here are six suggestions for better crisis management by your nonprofit.

01. Don’t Wait

Many organizations only get their crisis plans underway once a disaster has struck.

Instead, brainstorm possible scenarios or types of disasters that could happen and start planning for them.

Educate yourself about nonprofit crises and talk to those who weathered them. Invite a veteran of disasters to speak to your staff and your board. Assign your public relations staff to draft a crisis plan and give them a deadline.

Advocate for real emergency preparedness. Many people in nonprofits, especially small organizations, don’t think anything bad will ever happen. They don’t want to think about it. They don’t believe that they have the time to prepare.

And they might even resent staff who push on this topic.  Speak up anyway. If that crisis happens, people will appreciate your forethought.

02. Realize That Crises Take Many Steps

Crises come in all flavors. Some are high profile. Others might be more low key. But, in a time of 24/7 news, thinking you can keep the situation out of the public eye is a fantasy. If nothing else, local media will likely be all over it. Have you built up good relationships with local media outlets?

Like a fire, quickly getting on top of a crisis can make a huge difference in the outcome.

Your crisis might be an accident involving a volunteer, the death of a client, embezzlement by your chief financial officer, a lawsuit by a former employee, or a hack attack that threatens the privacy of your donors and clients.

They all require different responses. Prepare for as many as you can imagine, and do your best to put plans in place to minimize the damage to your nonprofit’s reputation.

Even if something happens that you didn’t think of, your preparation for other types of emergencies will help. The planning may reveal gaps in security, insurance coverage, inadequate human resource policies, or the shortage of people with particular skills.

Practicing any emergency response is likely to make your organization better prepared for others.

03. Develop a Logistical Plan and a Communications Plan

A logistical plan has to do with getting everyone out of the building in case of an earthquake, texting staff and clients that a gunman has been spotted in the building, or handling a medical emergency.

Develop a risk management program to deal with the loss of life, property, and insurance issues. Identify point people who can go into action quickly, notify appropriate help, and manage evacuation plans.

A communications plan involves identifying spokespeople, assigning someone to gather the facts as they emerge, writing press releases, and locating a place to have a press conference.

04. Get Your Social Media House in Order

Social media can be a blessing during a crisis IF it you handle it well.

Almost all nonprofits use some level of social media. Decide now who will manage that media during an emergency situation. Set up a dashboard (here are nine to consider) where you can monitor all social media platforms and respond quickly.

Because of social media, there is little chance of controlling information in a way that used to be possible. So don’t try. But you can give useful information, fight rumors with fact, and express concern.

Don’t just let your social media pages sit there. Use them. One study found that nonprofits often do not respond to social media questions or complaints.

However, social media may be the best way to show the human face of your organization and shore up its reputation for being kind, sympathetic, polite, accurate, and a source of unbiased information.

05. Prepare to Speak

Every minute counts after a crisis. Don’t waste any of them. Silence is deadly. Get out with appropriate statements and messages immediately, even if it is only to say that you know about the situation, you’re working on it, and that few facts are known at the moment.

Then keep it up with updates as events develop. For many situations, you may have already prepared statements.

In all communications, be concerned, show concern, speak concern, and always tell the truth. Don’t be afraid to say, “We don’t know.” That is better than guessing. Add that you are working as quickly as possible to get all the facts.

Far more is lost by refusing to speak to the media than is risked by doing so. A vacuum of information breeds media hostility and public loss of confidence.

06. Provide Media Training

Media training will be your best friend during a crisis. Don’t risk a media meltdown.

Put together a media training program before disaster strikes. Train anyone who might need to be a spokesperson. That might be your board chair, your CEO and other key staff, such as a media relations person.  Also, consider your top fundraiser, your volunteer coordinator and, where applicable, your security person or facilities manager.

Media training need not cost a lot if you have someone on your board who works in public relations or someone who is a member of the media. The key is to do it regularly so new people become trained, and others don’t grow stale.

 

Author: Joanne Fritz

Source: The Balance, Small Business