Crisis Management

Crisis Management


This week’s blog is going to explore what Crisis Management is and why you might want to give it some thought. It was inspired by a business owner I know who manufactures men’s skincare products. I asked him what he would do if someone claimed that his product had injured them. He replied that it was a source of worry so I thought I would write my blog this week on the subject of Crisis Management.

I guess the first thing to decide is what a crisis is in the context of business resilience.  Crisis Management is defined as the process by which an organization deals with a major event that threatens to harm the organization, its stakeholders, or the general public and is an important part of any organization’s communications function. How your business communicates may be key to the very survival of your business.

Unlike risk management, which tries to avoid threats Crisis Management is concerned with dealing with the threat while it is occurring and likely for some time afterwards.

Crisis Management Plans also need to be able to cope with so called ‘Black Swan’ events. These are events you never saw coming. The cloud of ash from the Icelandic volcano Eyjafjallajökull (go on, pronounce it) during April 2010 was a Black Swan event.

eyjafjallajokull volcanic eruption causes widespread crisis

icelandic volcano eruption 2010

No one anticipated the far reaching effects this would have on travel and the world economy and certainly no one had a response plan marked ‘Volcanic Ash Incident’.

Crisis Management Plans need to be agile and the focus here is on ensuring there are clearly understood roles, responsibilities and processes. You need to think about this in advance so that everyone in the organization knows their role and the roles of everyone else. Additionally, there needs to be forethought into who in the organisation does what during a crisis. The positions in a Crisis Management Team may not be best filled by the job title that first comes to mind. Crisis Management is about people being able to respond in adverse circumstances and making good decisions with sometimes limited information and almost certainly time constraints. If you are running a small business and don’t have the people you might need to run a Crisis Management response then you may want to think about out-sourcing some aspects of it.

So to the question of why you might need to do some work now to plan a response to a crisis?

What would you do if your product injured someone, or was accused of injuring someone? The recent Johnson and Johnson law suit over baby powder is a good example. Not only did it cost the company $72 million in one law suit, with 1200 others in the waiting it may well be the end of the company and not just because of the financial hit. Johnson and Johnson, reportedly, didn’t behave very well. ‘The jury in the trial was distressed by the company’s conduct’. (Nora Freeman Engstrom, a Stanford University law professor). This is poor crisis management in action. On a smaller scale but no less damaging for the business we frequently see owners of hotels and restaurants becoming involved in social media arguments over a bad review. In at least one case I have personal knowledge of the small B&B went out of business. It only takes one ill thought out response to destroy a business once it is in the public domain.

Good, well prepared and exercised Crisis Management on the other hand can even improve a company’s reputation but you need to be ready to respond instantly, there really isn’t time to think about what you are going to do once it happens.

The speed at which social media moves can be seen in the analysis of the social media events during the Lee Rigby murder. There were an average of 800 tweets per minute during the first 24 hours. One series of tweets from a single subscriber was retweeted 11,000 times and appeared in other posts 34,000 times in 24 hours. You can’t delete your first ill-considered posts and hope it will all go away, it will get worse, very quickly.

You need to plan now, before the event!

Luckily there are lots of sources you can find on the internet to help you.  Harvard University has a good one that you can adapt. You can find it here.

I hope this is helpful but if you have any questions please post them below.

Iain

 

 


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