CRISIS MANAGEMENT IN BUSINESS

AKANSHA AGRAWAL – ROLL NO 1AMIT SHARMA – ROLL NO 2

ASHISH DAHIYA – ROLL NO 3

Crisis Management Overview

Crisis Management Model

Crisis Management “Best” Practices

Crisis Communication

Case Studies

Conclusions

AGENDA

A crisis (from the Greek – krisis) is any event that is, or expected to lead to, an unstable and dangerous situation affecting an individual, group, community or whole society.

Crisis are deemed to be negative changes in the society especially

when they occur abruptly with little or no warning.

WHAT IS CRISIS?

Operational viability

Reputation

Credibility

Financial stability

Legal action

HOW CRISIS AFFECTS ORGANIZATION

Surprise◦ Quick onset – not expected◦ Normal operating practices do not apply◦ Puts us off-guard

Threat◦ To health and life safety◦ To business operations◦ To community, region, or globe

Quick response ◦ Communication may be difficult◦ Information is incomplete, inaccurate or difficult to obtain◦ Emotions are running high

CHARACTERSTICS OF CRISIS

Internal Events

CRISIS EVENTS THAT AFFECT BUSINESS

External Events

Business Contingenc

y Plans

Emergency Response

Plans

System Failures

People Unavailability

Cyber Attacks

Utility Failures

Fraud/ Sabotage

Building Not

Accessible

Severe Weather

Terrorist Threats

Fire/ Explosions

Utility Outage

Civil Disturba

nce

Environmental

Establishes structured protocols for managing and communicating in a crisis

Identifies potential risks which may prevent an incident from becoming a crisis

Gives team confidence and experience resulting in improved response time

Decreases severity of crisis by alleviating confusion

Provides high level knowledge and appropriate response actions

WHY PLAN FOR CRISIS EVENTS?

CRISIS MANAGEMENT MODEL

Antecedent conditions

Intrinsic crisis

Perceived crisis

Immature crisis

response

Mature crisis management

Review and Feedback

Intrinsic crisis: Total situation as seen by neutral observer with all the facts

Perceived crisis: As seen by individuals from particular viewpoints

Immature crisis response: Instant and irrational (denial/shock/panic)

Mature crisis management• Grasp of intrinsic crisis• Implementation of plans and procedures

Review and feedback:• Assessing success and failure• Feeding learning into future planning

1. Comprehensive Framework 2. Risk assessment & priority model3. Crisis strategy and communication plan4. Response action plans5. Protocols – simple and actionable 6. Relationships with internal and external parties7. Training and awareness 8. Practice

CRISIS MANAGEMENT – BEST PRACTICES

People – to respond and manage crisis◦ Define crisis team/s structure – members and alternates

◦ Establish clearly defined roles and responsibilities

◦ Develop “actionable” crisis response plans

Tools to communicate ◦ Staff, clients, regulators, and other interested parties

◦ Automated notifications, call trees, bridge lines, 1-800 lines, GETS, cell phones, Wireless, satellite phones, Internet, Emails

Processes to monitor, communicate and escalate incidents◦ Activate Crisis Management Framework

◦ Communicate to media, clients, and internal/external parties

◦ Establish and run the Emergency Operations Center

◦ Distribute one-page crisis/emergency response guides

1. Establish a comprehensive framework

Identify Risks and Threats◦ Consolidation of business impact analysis data at site level

◦ Identify internal and external threats for each location

◦ Categorize by probability of occurrence and impact

◦ Identify mitigation strategies and controls in place

Perform risk and vulnerability assessment◦ Establish classifications and weighting

◦ Calculate risk and vulnerability per site

Prioritize threats/vulnerabilities◦ Senior management agreement

◦ Create response plans for high risk threats

2. Conduct Risk & Vulnerability Assessments

Determine crisis strategy◦ Formulate, communicate, and document strategy

Develop communication plan◦ Media Strategy and Protocols

◦ Sample communications for emergency response

◦ Distribution lists for clients, regulators, and other parties

◦ Communication templates – local, regional, global

◦ Contact lists for crisis management, emergency response and business recovery staff

Protect brand and reputation◦ Appoint media spokesperson per site

◦ Provide appropriate training

3. Crisis Strategy and Communication Plan

Develop crisis response plans for high risk/threats

◦ Consult experts or leverage knowledge of internal resources

◦ Obtain a good understanding of risk or threat

◦ Create checklists for specific threats (i.e. hurricane, earthquake)

◦ Create one-page actionable response plans

◦ Identify resources and contact information of experts

Establish a central repository of crisis response plans

◦ Use as a basis for actual crisis event

◦ Update with lessons learned

◦ Share plans and knowledge locally, regionally, and globally

4. Response plans and resources

5. Establish protocols

Managing the crisis and command centre Structured agendas, roles and responsibilities and analysis tools Pre-defined rooms/bridge lines for crisis meetings Standard equipment for the Emergency command centre

Activating the crisis management framework Integrated with major incident handling process – BCP triggers Local, regional, global support – follow the sun approach Clear communication and update process for senior management

Communicating in a crisis Keep informed – media, industry, local authorities Templates of media and external party communication

Internal◦ Form partnerships with Corporate Security, Communications, and

HR – build joint response plans◦ Leverage knowledge and expertise within your firm◦ Perform site visits and establish relationships with other locations

External◦ Build relationships with emergency response agencies◦ Get involved with industry forums and committees◦ Know your supply chain and critical vendors◦ Establish relationships with Regulators and other authorities

6. Establish Relationships

Establish a comprehensive program

◦ On line E-Learning

◦ Briefings

◦ Workshops

◦ Full simulations

Regular communication to staff

◦ Keep them informed of basis crisis management activities

◦ Distribute guides, newsletters, and updates

◦ Document lessons learned – update response plans

7. Training and awareness

Build a championship team

◦ Regular drills and participation by team members

◦ Role play and simulate high risk threats as a team

◦ Involve senior management

◦ Use all tools, processes, and protocols during exercises

◦ Run evacuation, fire, and emergency response drills

◦ Involve as many staff as possible

◦ Combine tabletops scenario exercises with off-site

◦ Validate the actions in the crisis response plans

8. Practice your crisis teams

Core elements are: Identifying audiences (Who?) How communication is to take place (How?) What messages are to be communicated (What?)

Core process is: Active, two-way communication

CRISIS COMMUNICATION

Message Options: (What?)

1) Full apology2) Corrective action3) Ingratiation4) Justification5) Excuse6) Denial7) Attack the attacker

Process of Crisis Communication

GatherIntelligence

Complete arisk

assessment

Produceplans to

address risks

Promotecrisis- ready

culture

Publish plansand conduct

training

Test, reviewand practice

Risk assessment

Identification◦ define and describe

Estimation◦ likelihood and consequences

Evaluation◦ acceptability of risk

- Perpetrator was never identified- Future attempts cannot therefore be precluded

- Swift reactions reinforced Company reputation for integrity- Stakeholders reported high degree of trust- Product did not suffer in long term

TYLENOL TAMPERIN

G

- Long term costs were transferred to public- Delays in implementing clean-up leading to loss of wildlife.- Image management failed to fully recover the Company’s reputation in wider community

- Financial losses were bearable - Costs relating to clean-up were less than pre-emptive costs- Image management recovered the Company’s reputation in business community

EXXON VALDEZ

FAILURE OUTCOMES

SUCCESS OUTCOMES

INCIDENT

Be prepared for the “unexpected”

Implement a framework to enable a crisis management capability

Identify risks and threats – build response action plans

Establish protocols to ensure effective activation and management of a crisis

Establish and build relationships

Become a championship team by practice, practice, practice

Conclusions

Shrivastava, P. Mitroff, I.I., Miller, D. and A. Miglani, "Understanding industrial crisis". Journal of Management Studies, 1988, 25, 4.

Seeger, M. W. Sellnow, T. L. & Ulmer, R. R. (1998). "Communication, organization and crisis". Communication Yearbook 21.

Fischer, Robert. P., Halibozek, Edward., & Green, Gion, (2008) “Introduction to Security”. 8th Edition

Emergency Management Institute Home Page

REFERENCES

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