Introduction to Crisis Management...

Organizations face problems all the time, and solve them one way or another. Sometimes one of these problems is difficult, at least at the time it occurs, and it becomes a public interest with the help of the press. This problem is then known as a crisis, where the company is faced with legal, political, financial and governmental impact on its business. The most serious property of crises is the element of surprise. The worst part in their handling is being unprepared.

Dealing With Crisis Management: Crisis Communications...

Considering the wide range of crisis situations that may occur in an organization, there consequently needs to be separate responses from different groups of people. These groups are primarily:

1. The operational people, who are responsible for keeping the disruption under control.
2. The top management people, who are responsible for allocating resources and for making critical decisions needed to resolve the situation.
3. The communications people, who are responsible for making sure that those who need to know are informed initially and are kept informed until the crisis is resolved.

There are several consequences to incidents associated with organizational crises. They include financial loss, increased security and insurance costs and faltering of the company's image in the customers' eyes. Additionally, costs may be staggering from an employment perspective. The psychological trauma following a traumatic workplace incident from both an individual and from an organizational standpoint, can result in decreased productivity, increased absenteeism and an increase in workers' compensation claims.

The goal of any organization should be to develop and implement crisis management protocols in preparation for a critical incident and to provide caring, effective and immediate intervention following a critical accident.

One of the steps that an organization could take is to provide pre-crisis dealing. The goal of pre-incident crisis management training is to identify where the organization can implement policies and procedures, which can be utilized during and following a critical incident.

Through preparation and education, management and employees can gain knowledge and understanding of the trauma response and the opportunity to rehearse emotional and behavioral responses to threats or traumatic incidents.

The expectation is that through preparation for such an event, the physically harmful effects of the traumatic event will be minimized. Such preparation might include identification of the "most likely to occur" crisis situation and the establishment of crisis plan. Additional factors to consider are how to respond to customer reactions and questions and how to respond to the media.

Associate Public Relations Guidelines...

All teams and employees should be aware of the following guidelines for public relations during a crisis. In all cases, any media personnel (TV, radio, press, etc.) should be directed to contact the designated public relations representative. If you do not know who the representative is, or how to contact them, contact your crisis management team for further instructions.

• A designated news briefing should be established AWAY from the disaster site. Reporters should be asked to gather at this Press Area and remain there.
• All questions regarding suspected criminal activity or criminal related activities would be referred to the appropriate police or law enforcement official for comment.
• Keep tabs on 'rumors' being circulated and address them immediately through verification of facts.
• If you don't know then don't guess or speculate. Questions that are left unanswered should be documented and addressed as quickly as possible with verifiable and accurate information.

Crisis Stages, Types and Lessons Learned...

A crisis can come from nowhere at any time; natural disasters, human error and industrial accidents can all cause a crisis. Sometimes the cause of a crisis is management itself. Managers may insist that they face no crisis, and they fall into the brink of lying and the rejection of its existence. When the time of the deadline comes, their answer to why the job is not finished will be: "We faced trouble and stopped the operation." Some managers fall into the crises fallacies, and they overdo their denial of its existence. With time, the problems accumulate, causing absolute failure.

We can categorize crisis according to the cause of their existence or in another way, based on the warning time. Crises, like any business activity, have life cycles. The length of each phase depends on the efficiency of the management in dealing with the crisis.

It is management's responsibility to try to solve the crisis using everything it can, beginning with self confidence, going through using all the skills and ending by having the ability to absorb the public's anger or fear without harming the firm's income or reputation. If a manager solves a crisis without the public hearing about it, the manager has proven his brilliant capability.

The five stages of a crisis life cycle are:

1. Pre-Crisis Stage: Here the conditions for a crisis to occur are waiting for a small error so that the crisis can step in. This "seed" that starts growing in this stage can be ignorance or neglect from a manager concerning some aspect of the company, such as: risky operations or lack of crisis planning.

2. Warning: This is considered one of the most important stages in a crisis if not the most important. In it, a problem is first recognized and it can either be solved and ended forever, or it can expand and lead the way to complete destruction. Crisis can easily occur after this stage because of fear of facing the "storm" or the "problem" by ignoring it. The general response in this stage is either shock or denial and complacency.

3. Acute Crisis: Beginning here, the crisis begins to occur and the press (with the people) starts to know about the problem. Managers may try to avoid or ignore the problem, but the crisis has already reached a stage where it must be dealt with because actual losses have already started. This is the time where the documents and modules for facing crises are taken out and put in effect and it is shown whether the crises' management staff are well prepared or not. If not, then it is too late for the management to hide the problem.

4. Clean-Up: When the problem passes the warning stage without being solved, then it has struck the company and damage has happened. It is then time to recover the losses or at least save what is left of the firm's stock price (if applicable), reputation and production line. In recovering, a company must deal with legal cases, the press and people's pressure and litigation. From all this, a company can see and determine the reasons for such crisis to occur and to make sure that it never happens again.

5. Post-Crisis: This is the stage mentioned before which a company should reach when the warning of a crisis occurs. It is where a company finds remedy for the damage caused by the crisis (if not stopped from the beginning). If the company wins back the peoples' trust and work is back to normal, then the crisis has officially ended.

The most dangerous thing in a crisis is not knowing about it or not being prepared for it, whether it is natural, mechanical, human error, or a management problem. The natural causes are hard to control as they happen unexpectedly. For other causes, they can be faced with the proper planning and sometimes, the plans are well-designed enough to suit and deal with even the natural causes.

Any action is better than nothing and it is surely better than the denial that some managers tend to do with the public and the press. Still, a bigger mistake is lying to cover for the crisis. If this is the case, then the company has dug its grave as people will lose faith in the firm's honesty, and the crisis is doubled. A better action is to choose a well-trained spokesperson that can give the bad news in a "sweet" way in order to gain the respect of the people and at the same time not expose every detail that is harmful. Then, investigation for the causes should take place to find the proper precaution to avoid the same crisis in the future.

Types of Crises According to the Cause of Their Existence Crises are divided into nine categories, based on their causes, which are:

1. Natural Disaster Crisis: The most relevant type of crises is the one that happens because of a natural disaster. This natural disaster happens in the environment and the human beings have nothing to do with it. Examples of a natural disaster include: earthquakes, volcanoes, floods, and fire.

2. Industrial Accidents Crisis: Industrial accidents may vary from fires to machine dysfunction, to electrical short-circuit. These crises lead to a full-scale emergency. Other crises lead to a limited local response. The danger in the industrial accidents is that they are termed as a "Media Magnet" because these accidents can cause serious casualties.

3. Product Failure Crisis: This type of crises is a potential crisis for the company because the product may fail even if appropriate research and development techniques are followed. The magnitude of this crisis depends on the speed of decision-making in the company and their resistance to any kind of escalation for the problem.

4. Public Perception Crisis: During a crisis, a company may fall into another crisis because of failure in dealing with the crisis in a public way. This may lead to confusion, along with financial and personal losses due to a poor public image. This crisis is a kind of consequence or a "satellite" crisis for an emergency crisis. Dealing with this crisis reflects the quality of the organization response to a crisis and the efficiency of their decision making process.

5. Industrial relations Crisis: Poor industrial relations between the workers and the administration may lead to a major crisis. This crisis may lead to serious disorder in the operations. Sometimes business is forced to react aggressively. Sometimes the labor force may force the industry to stop. The relationship between the labor and the management should never reach this level of animosity.

6. Business Management Crisis: The real danger in this crisis is that it is subtle and non-predictable. The real cause is hidden within a plan followed by the organization that is proved to be erroneous later on. This happens due to a sudden market shift that the management did not plan for. However, management is responsible for this crisis because they did not foresee the potential market threat. There are other causes, such as: The consequences of other crises; failure to adjust to the market regulations; international events that have indirect impact on the business.

7. Criminal Events Crisis: These events are currently becoming more frequent. They are considered a major threat for some industries, such as tourism, banking and the airlines' industry. Common examples are hostage taking, terrorism, hijacking, and theft. This crisis requires a very precise response because this type of crises is a "Media Magnet."

8. Management Turnover Crisis: Sometimes change in the organization management is considered as a type of crisis. Some companies think about their CEO's as indispensable, or as a figurehead and their leaving is a real crisis. Some companies follow succession plans to ensure that such a crisis will never happen.

9. Hostile Takeover Crisis: This type is becoming more frequent because of tough competition between companies. Some companies that monopolize the market may lead other companies into a hostile takeover crises that would direct them to losses and cost the management it's name and reputation.

All these causes fall into four general categories:

1. Acts of God(storms, earthquakes, volcanic actions, etc).
2. Mechanical problems (ruptured pipes, metal fatigue, etc).
3. Human errors (wrong calculations, miscommunication, etc).
4. Management decisions/indecision.

Most of the crises fall in the last category and this is a result of management response to crises and the efficiency of their decision-making process.

Another type of crisis classification is based on the amount of "warning time" as shown below.

Types of crisis based on the time of the warning time:

1. Sudden Crisis: This is a disruption in the company's business that occurs without warning and is likely to generate news coverage that may adversely impact employees, investors, customers, suppliers, and other publics. It will directly harm the company's reputation, offices, franchises, and revenues.

The sudden crisis may happen because of the following reasons:

1. Natural Disaster, which endangers the employees and puts obstacles in front of operations.
2. Industrial accident, which disrupts normal operations.
3. Industrial relations, which may lead to workplace violence or demonstrations by the workers or any kind of disruption.
4. Management turnover, due to the death of a key executive.

2. Smoldering Crisis
This is any serious business problem which is not generally known within or without the company; which may generate negative news coverage if or when it goes "Public"; could result in more than a predetermined amount in fines, penalties, legal damage, unbudgeted expenses and other costs. The smoldering crisis may happen due to any one or more of Smoldering Crisis causes.

1. Internal problems within the organization that were not previously discovered.
2. Investigations by a government agency and the indications of some judicial actions against the company.
3. Customer problems because of poor management planning. The smoldering crisis falls into four levels, depending on the severity of the problem. The classification recommends a way to treat these problems to minimize the danger of disclosure to the public.
   

The findings from the NJBIA seminar and client interviews are summarized in these "Six Lessons Learned from Sept. 11." In all, the survey reflects the insights and ideas of about 80 crisis managers and corporate executives from a range of industry sectors.

The Threat Is Real Companies in the survey identified the reality of the threat and the need to prepare as the primary lessons learned from Sept. 11. They said terrorism must be taken more seriously, that every business is vulnerable and that companies need to act now to protect their operations and their people.

Conduct a Threat Assessment - Ask department heads, employees and even customers for their perspectives on threats to your business. Consider terrorism, natural disasters, fires, bomb threats, neighborhood emergencies, technology failures, security threats, and reputation crises. Consider financial threats, investigations, employee morale, and lawsuits. For each threat, consider the likelihood of occurrence and the potential impact.

Begin with Employee Safety - The most important aspect of every business is the people. Consider actions that can have an immediate impact on saving lives such as fire safety, evacuation planning, security, and emergency information for employees and their families.

Develop a Comprehensive Crisis Plan - This one is obvious but the plan is a must. Maximize resources by focusing on common consequences of disaster such as denied access to facilities, missing employees, disrupted supply lines and stressed communications systems. For example, building redundant communications systems prepares you for all types of crises.

Re-Think Locations for Backup Facilities - Some companies in New York discovered their back-up facilities were too close to the main office. On Sept. 11, neither location was accessible. One approach is to have one backup location in the area but not in the same neighborhood as the main office, and another backup location farther away. Consider employees' ability to travel before picking a location.

Decentralize Resources - Businesses can lose everything when resources are in one location. Identify suppliers for backup services. Maintain redundant media services. Have an off-site facility for data storage. E-mail important data to different computer networks.

Test Your Plan - Hold briefings at the unit or department level to familiarize executives with their responsibilities. Tabletop exercises bring executives together in a conference room setting to talk through a crisis scenario from beginning to end. Tabletops are an efficient way to identify problems before conducting more demanding training activities.

"We test the information technology section of our disaster recovery plan annually, but I'm troubled that we haven't tested managers' participation in the program." - Financial Services

Find A Way To Locate Your Staff - On Sept. 11, every company faced the same question: "Where are our people?" Are you able to locate staff in an emergency? Would you be able to determine who's in the office, who's off site and who's on vacation? Are you able to communicate with off-duty employees and their families?

Establish Redundant Communications Systems for Contacting Employees - Expect cellular telephone systems to be overloaded. Consider broadcast voicemail, fax, and e-mail systems that reach employees' homes and offices. Consider pager and beeper systems, instant messaging, automated call-out systems, and public address systems.

Establish Redundant Communications Systems for Employees - Set up a toll-free hotline for recorded messages. Establish points-of-contact for employees to call. Know the procedures for posting information quickly on the company's Web site and intranet. Lesson #3

Take evacuation seriously - Better evacuation planning and enforcement were the primary lessons learned from Sept. 11th. We all tend to be complacent when the fire alarms sounds, but waiting to evacuate can prove fatal.

Develop an Evacuation Plan - Evacuation needs to be achievable and procedures should be communicated in a meaningful manner. Have clearly defined assembly areas, and procedures for accounting for employees, contractors and visitors. Remember to identify any special needs employees may have.

Strictly enforce evacuation policies - Hold employees and senior executives accountable for complying with procedures.

Play It Safe - Survey participants emphasized the need to take evacuation seriously.

Conduct evacuation drills - Require employees to physically go to the designated assembly area.

Never Stop Communicating - Communications are always critical. Make sure employees and families know what's going on, how the company is responding and how events are affecting them.

"You need to be decisive, act quickly and in the best interest of employees." - Automobile Company

Communicate Across the Company as Soon as You Can - Important topics:

• How the company is responding to the situation and why.
• What the company is doing to help people affected by disaster.
• What employees should do, how employees can protect themselves.
• Updates on office closures and use of backup facilities.
• News about what's happening in the community (community disasters).
• Information about victims.
• How employees can help the company or community recover.

Prepare Information Ahead of Time - Organize and format information so it can be used right away. Include:

• Information about the employee assistance program, company policies and health insurance.
• Procedures related to security, evacuation, facility lockdown and use of backup facilities.
• Information about on-site hazards.

"A steady flow of communications is important, even when you have nothing new to report." - Government Spokesperson

Know How to Access Communications Systems:

• Who has authority to approve information for public release?
• Do you have systems for communicating with all employees?
• Who is responsible for communicating with key audiences?
• How would you post information on company Web and intranet sites in an emergency? Who is responsible for these assignments?
• Are key telephone numbers accessible and current?

"It's critical to communicate with staff and the community about what the organization is doing. Use a central command center as a hub for incoming and outgoing communications." - Healthcare Company

Have your CEO or president make a statement - Major crises require a voice from the top. You don't need to say a lot, but you need to show you care and that you are taking action. Acknowledge the problem, show empathy and state when more definitive information will be available.

"The Internet is a good way to show leadership and pull people together internally." - Energy Company Lesson

Employees' Concerns, Emotions - Companies we surveyed often cited the emotional impact of Sept. 11 and their heightened sense of responsibility to employees. Try to deal with employees from where they are emotionally for their well-being and the good of the company.

"We learned the importance of meeting the emotional needs of employees. Our facility wasn't directly threatened on Sept. 11, but there was much fear of the unknown and concern for loved ones." - Manufacturer

Provide forums to encourage employee interaction - Following Sept. 11, many companies organized informal gatherings such as brown bag lunches to give employees a chance to share stories.

"Grief counseling during and after an event is extremely important to the business continuity and recovery process." - Healthcare Company

Ask for employee feedback - Ask them what information they need. Ask for advice on how to handle emotional issues. Be sensitive to their expectations on how the company should respond.

"I learned that every crisis has victims and we need to be human in how we respond to them." - Oil Refinery

Help employees prepare for disaster - Recognize that their first concern will be their own families. They won't be emotionally ready to help the company until they know family members are safe.

Provide employees a way to help - Empower them to work together to solve problems. Involve them in decision-making about corporate donations. Allow ideas to come from the bottom up. While writing a corporate check to the community is always welcome, some question whether it should be company or employee-driven. Recognize that employee-generated activities help the employees and the community. Lesson #6

Help The Community - Companies are extremely generous in disasters. Unfortunately, a lot of potential support is never realized because of the logistical issues involved. Disaster relief organizations ask companies not to show up at the disaster scene with truckloads of supplies because they don't have the resources to organize and distribute the material. Resources should be specifically requested by a disaster response organization or arranged for in advance.

Establish relationships with local emergency services and state police - Know the services they provide. Know how to communicate with them in a disaster.

Identify disaster resources before disaster occurs - Talk to emergency management and disaster relief organizations about the best use of your products, services, and human resources in a disaster. It is important to do this now while there is sufficient time to work through any logistical issues.

Consider public relations - You don't want to be perceived as taking advantage of a crisis situation to advance your company's name. Involve the communications team in all aspects of crisis response. One of our clients that actively assisted in the Sept. 11 response turned down opportunities for media coverage. Others found ways to provide assistance or support that would be perceived as valuable but not self-serving - holding a company meeting in New York, for example.