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CRISIS MANAGEMENT

Crises or disasters can strike at any time. They are most devastating when sudden, but slower events can be cumulative and just as damaging.When crises happen, there needs to be a practised plan that ensures a positive, focused and effective response. During a crisis there tends to be confusion, uncertainty and even fear. A crisis management plan generates order out of chaos. It needs strong leadership by well-trained and rehearsed individuals. Everyone within an organisation should know what his or her role is in a crisis.

Use this section to find out more on:

Crisis Management and Business Continuity

There is a common misconception that a business with a good crisis management plan does not need business continuity plans

Two key phases should be undertaken when responding to a crisis:

  • Immediate Response
  • Recovery

Crisis management deals with the immediate response to a crisis, but also ensures that business continuity plans can be invoked, executed effectively and managed. Business continuity plans deal more with the recovery phase. The subject, when including both crisis management and business continuity, is often referred to as Integrated Emergency Management. The two subjects are separate but interrelated, which have at their heart an assessment of risk. This section deals with crisis management.

What is a crisis?

A crisis is an abnormal situation, or even perception, which is beyond the scope of everyday business and which threatens the operation, safety and reputation of an organisation. Crisis management is the process by which the organisation manages a wider impact, such as media relations, and enables it to commence recovery.

What are the risks from a crisis?

What are the risks to your business when facing a crisis? The commercial world is becoming increasingly complicated and interdependent at a local, national and international level. It is also increasingly reliant on technology, changing customer requirements and pressure for competitiveness.

In this environment it is essential that businesses maintain high standards and high availability in order to ensure a quality service to their customers. The threats to your business can be many and varied. They may originate from natural threats such as flood or fire, or man-made causes such as deliberate damage caused, for example, by:

  • Terrorism or extremist activity
  • Industrial action
  • Failure of a third party supplier

Risks may manifest themselves as incidents or crises. Indeed, many business operation managers (and others) deal with unforeseen events on a daily basis, and still have to maintain their service. Some incidents cause nuisance and occasionally some cause chaos, especially if they are not managed effectively. There is no guarantee that a business will survive a major disruption to its service, even if it is caused by an incident outside its control. Some companies now fund crisis management from their sales and marketing budget, rationalising that good crisis management ensures a robust and resilient service which many customers demand.

Roles of the Crisis Management Team

The role of the Crisis Management Team (CMT) within a business is a straightforward management process. It should:

  • Establish what has happened
  • Assess the impact
  • Resolve any conflicts of interest
  • Identify and prioritise actions required
  • Retain control

The Crisis Management Team would also prepare a brief for the Board and for the rest of the business. This is often done with the help of a Corporate Communications or Public Affairs department (or equivalent), as the brief also forms the basis of a common message, communicated to appropriate external organisations (including the media).

Roles of managers within the crisis management team should be based on their everyday roles. In formulating a Crisis Management Plan, managers should state exactly what these roles and responsibilities are. This should ensure that nothing important has been omitted. Clarity and a focused response are essential to make sense of a crisis. Indeed, there is evidence that crisis management planning can actually clarify roles.

As with an emergency medical response, there is a principle called 'the golden hour' following the identification of a crisis. If the immediate response is professional, subsequent crisis management action is more likely to be effective. These actions will be based on the best information available at the time. If they are conducted in good faith and based on perceived best practice in accordance with your plan, (even if they are subsequently found to be wrong), your business will probably emerge with credit. Conversely, a business may be held more accountable if it does nothing and has made no provision for crisis management planning.

Acceptance that a crisis has occurred and making an appropriate response to it, is fundamental to crisis management. A gas explosion or a major incident is devastating, sudden and obvious. At the other extreme there may be a less obvious "creeping" disaster such as the impact of the 2001 Foot and Mouth epidemic on tourism.

Crisis Management Process

When responding to a crisis, managers are normally represented in the crisis management team. The crisis should be dealt with as an operational management  issue that is simply being undertaken in extreme circumstances. The crisis management framework for response is normally based on existing management structures and responsibilities. It must also reflect (or improve upon) existing lines of communication, both within the company, and with other organisations which may be affected. This approach, when developed in conjunction with the operational managers, will confirm ownership of plans and prepare the proposed framework for practical implementation.

The proposed framework is a simple three-tier structure, namely Strategic (for example, the Board), Tactical (the crisis centre) and Operational (for example, the location where the incident is being managed and recovery is taking place). This approach is also known as the 'STOP' model. Within the UK Emergency Services, it is often referred to as the Gold, Silver and Bronze Control Framework.In addition to this framework, a crisis centre should be identified with the necessary infrastructure - telephones, workstations, fax machines, conference-call facilities, television, whiteboards, etc. The crisis management team should consist of liaison managers from all key departments in the organisation. The manager of the crisis management team (commonly the Business Continuity Manager) co-ordinates the process, at least to start with. Where the crisis escalates, a more senior manager or director with required authority may take on the role.

One of the risks inherent in such plans is the constant change within organisational structures, staff appointments and responsibilities. The plan will only remain relevant and effective by a formal process of maintenance and frequent practice.

Crisis Management Plans

The plan documents  are key to success. Clear, well-indexed and consistently formatted documents all help, but the following must be included:

  • People involved and their tasks
  • Methods for identifying crises
  • Methods for involving management
  • Lines of communication
  • Mechanisms for reporting
  • Process for decision making
  • Equipment, facilities and occupation of crisis management centre
  • Levels of control and authority limits

Benefits of Effective Crisis Management

The benefits of effective crisis management are numerous and immediate. They include:

  • Enhanced safety for staff and customers
  • Compliance with regulatory and ethical requirements
  • Effective management of major incidents
  • Increased staff awareness of the organisation
  • Increased confidence and morale within the organisation
  • Protected and often enhanced reputation
  • Reduced risk of litigation
  • Levels of control and authority limits

Conclusion on Crisis Management

By definition, crisis management deals with incidents of major impact. The subject is separate from (but integrated with) business continuity. A good crisis management plan without sound continuity planning is like building a house on clay.

There is also something of a balancing act in crisis management planning. The best plans are the simplest and yet the attention to detail remains extremely important.

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

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

To remain competitive, business continuity and crisis management must form part of your overall business strategy.