CRISISCRISISMANAGEMENTMANAGEMENT

.…………………………………..…………………………………. Prepared By:Prepared By:

Jigar Soni Jigar Soni

Crisis ManagementCrisis Management

ReadinessReadiness

ResponseResponse

RecoveryRecovery

DefinitionDefinition

Crisis Management is the systematic Crisis Management is the systematic attempt to avoid organizational crisis,attempt to avoid organizational crisis,

or to manage those crises events that or to manage those crises events that

do occur. do occur.

What is crisis ?What is crisis ?

Crisis is major, unpredictable event thatCrisis is major, unpredictable event that

threatens to harm an operation, staff, threatens to harm an operation, staff, customers, reputation or the legal and financial customers, reputation or the legal and financial status of an organization.status of an organization.

Crisis can strike any time and during thisCrisis can strike any time and during this

Situation it tends to be __Situation it tends to be __

Confusion, Uncertainty, fear. Confusion, Uncertainty, fear.

Conti…Conti…

A crisis is an abnormal situation, or even A crisis is an abnormal situation, or even perception, which is beyond the scope of perception, which is beyond the scope of everyday business and which threats the everyday business and which threats the operation of an organization.operation of an organization.

Crisis is an unpredictable events but it is Crisis is an unpredictable events but it is not unexpected.not unexpected.

Crisis can affect all segment of society.Crisis can affect all segment of society.

Crisis

BusinessAnd

Government

Educationalinstitutions

Family

Three common element of crisis :-Three common element of crisis :-

A threat to the organizationA threat to the organization

The element of surprisesThe element of surprises

A short decision timeA short decision time

Types of CrisisTypes of Crisis

Natural disaster :-Natural disaster :-

Physical destruction due to natural Physical destruction due to natural disaster e.g. flood, tsunami. disaster e.g. flood, tsunami.

Industrial accident :-Industrial accident :-

Construction collapse,Construction collapse,

Fire, and Toxic release. Fire, and Toxic release.

Types of CrisisTypes of Crisis

Product or service failure :-Product or service failure :- Communication failure,Communication failure, System failure,System failure, Machine failure.Machine failure.

Capacity :-Capacity :- Faulty or dangerous goods,Faulty or dangerous goods, Health scare related to product of Health scare related to product of

industry. industry.

Types of CrisisTypes of Crisis

Public Relations :-Public Relations :- Unwelcome media attention,Unwelcome media attention, Adverse publicity in media,Adverse publicity in media, Removal of CEO or key management.Removal of CEO or key management.

Legal :-Legal :- Product liability,Product liability, Health scare,Health scare, Employee or other fraud.Employee or other fraud.

Types of CrisisTypes of Crisis

Business and management :-Business and management :-

Hostile takeover,Hostile takeover,

sudden strike by workforce or key supplier,sudden strike by workforce or key supplier,

Major customer withdraws its support,Major customer withdraws its support,

Competitors launches new product,Competitors launches new product,

Sudden shortfall in demand.Sudden shortfall in demand.

Examples of crisis managementExamples of crisis managementReadiness, Response, RecoveryReadiness, Response, Recovery

Reliance Power IPOReliance Power IPO :- :- Anil Ambani GroupAnil Ambani Group

Issue Price of share – Rs.450Issue Price of share – Rs.450 listed Price of share -- below offer price listed Price of share -- below offer price

Situation :-Situation :- 1. A threat to company1. A threat to company 2. The element of surprise2. The element of surprise 3. A short decision time3. A short decision time

Examples of crisis managementExamples of crisis managementReadiness, Response, RecoveryReadiness, Response, Recovery

Response :- Response :-

Anil Ambani announce bonus shares to Anil Ambani announce bonus shares to their shareholders within 7 days for build their shareholders within 7 days for build up confidence again in Reliance Power. up confidence again in Reliance Power.

Recovery :-Recovery :-

when he announce bonus shares, share when he announce bonus shares, share price go up smartly.price go up smartly.

Examples of crisis managementExamples of crisis managementReadiness, Response, RecoveryReadiness, Response, Recovery

Cadbury India in the year - 2004Cadbury India in the year - 2004 Some worms were found in a few bars of Some worms were found in a few bars of Dairy Milk Chocolate. Dairy Milk Chocolate. That time demand for the dairy milk chocolate sharply That time demand for the dairy milk chocolate sharply

decrease and consumer loose their confidence in it. decrease and consumer loose their confidence in it. But Cadbury India search the reason behind this incident But Cadbury India search the reason behind this incident

and they find the problem of poor packaging.and they find the problem of poor packaging. Temper proof packaging launched within 90 days.Temper proof packaging launched within 90 days. New two commercial launched, featuring brandNew two commercial launched, featuring brand ambassador Amitabh Bachchan.ambassador Amitabh Bachchan.

Stages of crisis managementStages of crisis management

Three mainStages

Pre crisis Planning

The crisisitself

Post crisisOr

Recovery

Stages of crisis managementStages of crisis management

1 . Pre crisis planning1 . Pre crisis planning:-:-

managers plan how to managers plan how to

respond to crisis respond to crisis events that may events that may occur.occur.

Stages of crisis managementStages of crisis management

2. The crisis itself :-2. The crisis itself :-

Managers respond Managers respond to crisis in hopes of to crisis in hopes of reducing its impact.reducing its impact.

Stages of crisis managementStages of crisis management

3. Post crisis or 3. Post crisis or Recovery Recovery :-:-

Managers assess the Managers assess the damage and attempt damage and attempt to return the to return the organization to at organization to at least its pre-crisis least its pre-crisis stage.stage.

Crisis Management ProcessCrisis Management Process

It is a process that requires guidelines It is a process that requires guidelines resources, analysis, communication, and resources, analysis, communication, and decision making that go beyond a single decision making that go beyond a single organizational function.organizational function.

Conditions that produce a crisis are normally uncontrolled and spontaneous;

however, steps can be taken to mitigate the effects of the Crisis by:

Anticipating areas of concern.

Establishing response guidelines to these perceived concerns.

Responding in a timely and organized manner.

Planning ProcessPlanning Process

Prevention:Prevention:

It It is the application of management

principles and systems to the identification, understanding and control

of process hazards to prevent process related injuries and accidents.

Preparation:-Preparation:-

Develop a policy that specifies the role of corporate organizations in managing an

incident, such as: providing field support resources to the site, role of executives, providing a buffer for the site so they can address the emergency; site reporting requirements.

Crisis Management TeamCrisis Management Team

A management structure, authority for decisions and responsibility for implementation.

The CMT should include:

Team leader

Environmental, Health and Safety (EH&S)

Public RelationsPublic Relations

Human ResourcesHuman Resources

Legal Legal

SecuritySecurity

Team CoordinatorTeam Coordinator

Crisis Command CenterCrisis Command Center

Implementation:-Implementation:-Managing The CrisisManaging The Crisis

Initial response to a crisis – Phase 1Initial response to a crisis – Phase 1

• What happened?

• Has a cause been identified, e.g. accidental or intentional?

• Who is affected and what is known about those affected?

• What response is underway and who is involved in the response?

Managing the response – Phase 2Managing the response – Phase 2

It has two purpose :

To develop and maintain awareness of the crisis or emergency situation for critical decision makers.

To coordinate support and assistance for crisis and emergency responders.

Crisis management team process – Phase 3Crisis management team process – Phase 3

If there is a critical aspect to the management of a crisis for both immediate support of the site or incident scene team and long-term recovery for the company, it is communication.

Your audience may be one or all of

the following:

Employees and their families Customers/Clients Contractors/Vendors Boards of Directors Media Onsite Contractors/Vendors Government and Regulatory Agencies Local law enforcement Emergency responders Investors/Shareholders Insurance Companies

MEDIAMEDIA The media is likely to be your first and most

persistent audience. They will react quickly, en masse and relentlessly. The incident scene should designate a single primary spokesperson, with back-ups identified, who will manage/disseminate crisis communications to the media, responding government agencies, and others. This individual should be trained in media relations prior to a crisis. All information should be funneled through a single source to assure that the messages being delivered are consistent.

Communication Plan Should Have :-Communication Plan Should Have :-

The initial release should be developed and distributed quickly. Consider using

the internet and intranet. Communications should be timely and honest.

Regular, detailed situation update information sharing is critical. Let the

audience know the timing of the next update

Responsiveness to regulatory agencies and government officials is critical.

Help agencies or officials communicate to media and public:

~ Set up daily briefings at a designated location

~ Consider joint news releases or media interview opportunities

~ Consider community meetings

Speak directly to the public whenever possible

Roles Of The Crisis Management TeamRoles Of The Crisis Management Team

1. Establish what has happened.1. Establish what has happened.

2. Assess the impact.2. Assess the impact.

3. Resolve any conflicts of interest.3. Resolve any conflicts of interest.

4. Identify and prioritise actions required.4. Identify and prioritise actions required.

5. Retain control.5. Retain control.

Immediate Aftermath & Recovery – Phase 4Immediate Aftermath & Recovery – Phase 4

1. The assessment and business recovery begins as soon as the emergency is

stabilized.

2. Recovered the pre situation.

Training & MaintenanceTraining & Maintenance

Training :-

The Crisis Management Teams should be educated about their responsibilities and

duties. Checklists of critical actions and information to be gathered are valuable tools in the education and response processes.

Maintenance :-Maintenance :-

A plan is only effective if it is current and practiced. Keeping a plan current is an

ongoing task that needs constant attention. Obviously phone numbers require the most vigilance and could be tied to a database for easier maintenance, but there is other information that must be tracked. Contact information for external contacts and procedures are likely to change.

Benefits of Effective Crisis Benefits of Effective Crisis ManagementManagement

Enhanced safety for staff and customers.Enhanced safety for staff and customers.

Increase staff awareness of the organization.Increase staff awareness of the organization.

Increase confidence and morale within the Increase confidence and morale within the organization.organization.

Protected and often enhanced reputation.Protected and often enhanced reputation.

Reduced risk of litigation.Reduced risk of litigation.

10 Crisis Mistakes10 Crisis Mistakes1. Don't fall apart. Unraveling is no way to hold things 1. Don't fall apart. Unraveling is no way to hold things

together. If you become a basket case, everyone else together. If you become a basket case, everyone else will, too. will, too.

2. Don't freeze or become immobilized. CM requires 2. Don't freeze or become immobilized. CM requires action, not paralysis. action, not paralysis.

3. Don't run away -- physically, mentally or emotionally. 3. Don't run away -- physically, mentally or emotionally. The first keys to recovery from mishap are presence The first keys to recovery from mishap are presence and visibility. and visibility.

4. Don't ignore the problem. Pretending bad things didn't 4. Don't ignore the problem. Pretending bad things didn't happen won't make them go away. It will only make happen won't make them go away. It will only make you look like a fool on top of everything else. you look like a fool on top of everything else.

5. Don't deny the obvious. Denial is a form of 5. Don't deny the obvious. Denial is a form of lying.lying.

6. Don't attempt a cover-up. It usually makes 6. Don't attempt a cover-up. It usually makes things worse.things worse.

7. Avoid blaming and finger-pointing. These are 7. Avoid blaming and finger-pointing. These are excuses, not solutions. excuses, not solutions.

8. Don't procrastinate. Delaying action only adds 8. Don't procrastinate. Delaying action only adds to the problem. to the problem.

9.9. Don't just keep on doing what you've been Don't just keep on doing what you've been doing. When something goes wrong, more doing. When something goes wrong, more

of of the same is not an antidote. the same is not an antidote.

10.10. Don't give up. Once you surrender, there is Don't give up. Once you surrender, there is no possibility for triumph. During the dark no possibility for triumph. During the dark hours, avoiding costly mistakes can give hours, avoiding costly mistakes can give

you you a leg up on out-lasting disaster.a leg up on out-lasting disaster.

ConclusionConclusion

Crisis management deals with incidents of major Crisis management deals with incidents of major impact.impact.

Failing to plan for incidents may result in Failing to plan for incidents may result in casualities and poor safety procedures,casualities and poor safety procedures, with with many potential losses including money, many potential losses including money, equipment, reputation, staff morale, market equipment, reputation, staff morale, market share and ultimately loss of the business itself.share and ultimately loss of the business itself.

So, it is the one that saves lives, So, it is the one that saves lives, property and other assets.property and other assets.

The issue is not whether to have crisis management The issue is not whether to have crisis management or not, but to apply it to best suit your organization.or not, but to apply it to best suit your organization.

How Well You RespondHow Well You Respond Depends On How Well Depends On How Well You Are Prepared.You Are Prepared.

THANK YOUTHANK YOU