What is a crisis?

• A management crisis as an immediately unexpected event or action that threatens the lives of stakeholders and the ability of the organization to survive.
• Loss of life or threat to life should certainly be considered a crises when the lives of employees, customers, members of the community, and other who have a relationship with the organization and stage in its actions are threatened.
• Events that threaten the survival of a firm include product failures and plant explosions. Some events, such as weather storms or volcano eruptions, are uncontrollable, but other crises are deliberate, accidental and irrational acts of those involved with the organization.
• No specific crisis can be precisely predicted or prevented.

What is crisis management?

Crisis management has dual meaning.

• The management of operations during the actual crises in the midst of the event- be it fire, evacuation, plant shutdown, or product recall- to the degree that the events can be managed.
• Crisis management also means the management of the organization before, during, and after the crisis.

The dual management concept recognizes the importance of a well-structured operations program to be executed in the midst of a crisis in order to reduce the effects of a crisis and the importance of planning all aspects of a corporate response to a crisis.

Managed from the outside-in and the inside-out by a modern management team. Crises management can include the management by the organization of the perception of a crisis.

A fully developed plan includes:

The corporate response to rumors, false or misleading media information, or misunderstood information. Manage the corporation’s response immediately so that the perceived crisis does not threaten the survival of a firm.

Crisis management is not a mechanistic actions of rules, procedures and physical actions by a firm. It consists of a full range of thoughtful processes and steps that anticipate the complex nature of crisis real and perceived.

You don’t leave finances to chance..why would you not plan for a crisis?

Crisis does not occur frequently, when it does, it occurs with sometimes fatal and disastrous results.

Plan, execute, and then evaluate the events and activities connected with the function.

Organizations should have given prior thought to developing a plan with a team of managers expected to carry out the plan and then to evaluate their performance during the crisis. Even if the particular management activity only occurs once a year, once every three years, or once in a company’s lifetime, the existence and the execution of the crisis plan can be just as important, or more so, to the survival of the organization as the marketing, financial, production, of human resources plans and management.

An approach to crisis planning

Basic framework to stimulate managers to develop a plan.

The following outline the basis of the crisis plan.

I. Mission/Approach

A. Company’s Mission Statement

A brief version of the company’s mission statement.
Restating goals ensures the plan is on track.

B. Company’s Philosophy/Behavior Standards

Unwritten insights about additional company philosophies and accepted codes of conduct.
Corporate conscience section the place to mention a company’s devotions.
From employees up.

C. Key Messages (not crisis-related)

• Messages to stakeholders
• Value thoughts
• Explain your “caring”

D. Objectives

1. To determine

• What’s important
• What does the plan achieve.
• What should be attended to first

2. What/who are we protecting?

• Company’s good name
• Customers safety
• Product quality
• Shareholder’s return

E. Performance Standard and Benchmarks
Describe how performance during a crisis will be evaluated.

F. Rationale for This Plan

1. Need for crisis team
The crisis team’s mission will be outlined so that all employees will be familiar with the teams important function in managing a crisis.
2. Need for walk-through and evaluation
Explain why both segments are vital to crisis training and why they appear in the plan.
3. Brief list of past crises

II. History of Crises and Potential Crises

A. Review of Crises

• Within the organization
• Competitors
• Similar organizations

B. Potential Crises

List the potential…big and small list preventable and non preventable.

C. Survey Results

Do an audit to find the weaknesses

D. Definition of Crisis and Different Levels of Reaction

Level of crisis

E. Crisis Stages

Most but not all crises evolve.
The stages include:
1. Pre-crisis: Warning signs/acknowledgment/resolve
2. Post-Crisis: Rebuilding/recovery/reform

Describing how crises might escalate will provide insight on how to plan for particular crises.

III. First Steps

A. Notify Internal (and some External) Publics That Crisis Exists

1. Notify crisis leaders/team members
2. Inform board of directors, CEO, CFO

B. Crisis Team

1. When to pull team in. After the crisis leaders have briefly defined the problem, the crisis team should be pulled in.

2. Responsibilities of all members

a. One gatekeeper is established to oversee all incoming and outgoing materials
b. all members previously have been informed of their duties and been provided an organizational chart describing their duties

3. Furnishing a crisis room

• sufficient electrical outlets
• computers with modems that access company files and online system; laser printerportable computers with modems
• fax machine, blast fax, fax cover sheets
• pre-programmed telephones with a separate line for each member of the crisis team and voice mail and call interrupt
• cellular phone with listed numbers and voice mail and call interrupt connections
• telephone directories for organizational sites
• organization chart
• diagram of a "phone tree" for calling
• media directories, governmental directories, business and professional directories
• televisions with cable to receive
• radios including short-wave
• photocopier
• VCR and audio tape play back and copying ability
• risk area maps in hard copy or software
• legal pads, pens, pencils, paper clips, staplers/staples
• corporations stationery, envelopes (some pre-labeled with employee of other names)
• extra stick-on labels for mailing to stakeholders
• Federal Express of other rapid delivery materials
• lists (see IV Audiences)
• tables and chairs
• trash receptacles
• clocks
• restrooms/shower facilities nearby
• refreshments

4. Stocking a crisis kit

• cash
• lists
• portable phone
• portable computer
• still and video cameras
• tape recorder and extra tape cassettes
• beeper
• corporate credit card
• fax machine/blast fax
• laminated wallet size listing of all phone numbers for crisis team and top management

5. When and how to pull in outside advisors or experts Experts should be used for third party endorsement (for example the FDA during the Gerber baby food tampering scare)

6.References to other departments operational plans

• descriptions of how other departments function
• organizational structure of the company

C. Establishing a Media Center

A media briefing room should include:

• General press kits: background of safety record, fact sheet
• Refreshments
• Telephones
• Podium, microphone, and portable PA system
• Chairs, tables, desks
• Computers, modems, printers
• Photocopiers

D. Collect a Plethora of Information on the Crisis

• Go to the scene of the crisis
• Listen to the radio, TV
• Wire service
• Call police, government, hospitals

IV. Audiences

A. Define and Identify Audiences

1. Comprehensive list of key stake holders. This differs for each company, but may include:

• Board of directors
• Community and civic leaders
• Media
• Customers
• Shareholder
• Clients
• Neighbors
• Financial partners
• Government agencies
• Regulatory agencies
• Vendors
• Suppliers
• Certain competitors
• Family members
• Analysts
• Legal groups
• Media
• subsidiary heads
• Employees
• Plant managers
• Union officials
• Retirees
• Pension holders
• Sales/marketing personnel
• Agencies

2. Prioritize list of key stakeholders for contact order under several scenarios.

3. Identify communications channels/vehicles

• press releases
• letter
• personal visits
• telephone calls
• meetings
• advertising
• internal publications
• news conferences
• interoffice memos
• faxes
• e-mails
• overnight mail

4. Determine who is responsible to reach each audience and how

• Prioritize communication channels
• Ensure you can use various channels
• Ensure that communication is two way

C. Know your Audiences

• Track stakeholders
• Be sensitive to needs
• Know the key contacts in each stakeholder group

D. Know Government rules

V. Media

A. Identify Corporate Media Policy

• Open
• Honest
• Proactive

B. Identify Spokespeople

• Level and type of crisis dictate spokespeople
• Gatekeeper and function
• Media training
• Must be available
• Monitor

C. Media Database

• Deadlines
• Priorities
• updating
• Crisis kit

D. Third Party Resources

• Credible
• Trusted
• On-going relationship

E. Standard Operating procedures

• Disclosure

F. How to Handle Media Inquiries

• Fact checking
• Walk-through

G. Evaluation After the resolution of the crisis it’s time to analyze all of the elements to determine the effectiveness of the plan. The evaluation should begin immediately, be reviewed at three months, six months and at one year. Bear in mind that anniversary dates are important and that the media will often look to you on those dates. The evaluation should include:

• Interviews with external publics
• Interviews internal publics
• Survey media
• Analysis of clippings
• Feedback
• Clippings
• Bottom line analysis
• Appreciation
• Crisis management against benchmark
• Modify plan if necessary
• Case study
• Awards to employees

H. Outside Counsel

You may want to consider outside counsel. There are many professional firms who specialize in assisting firms during a crisis. While outside help can be important the purpose of having an organization develop a plan is because no one can manage a crisis better than the organization experiencing the crisis.

With special thanks to:
Crisis Response by Jack A. Gottschalk and all my clients who have had a crisis.

May you never have one.

Marlie Oden, Bridge Communications