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The Basics of Crisis Management
 
 



The Basics of Crisis Management
Introduction

All crisis management techniques, methods, and plans are based on the question, "What's the worst that can happen?" While many people don't want to think of worst case scenarios and only hope for the best, looking at the world through rose colored glasses doesn't help individuals, teams, companies, corporations, or governments to plan or prepare to meet an emergency.

A crisis may be triggered by a rogue employee, the death of a chief executive officer, mismanagement of funds, or a variety of other situations that may come totally out of left field for many business managers.

Developing, preparing, and training a crisis management team involves the cooperation and compliance of team leaders, managers, and employees, along with careful preparation, adequate training, and transparent flow of information on a daily basis.

Preparation

One of the best ways to prepare any company, entity, business, or individual for any type of emergency is to create what if scenarios or worst case models based on specific industries and industry needs. Ask questions such as:

  • In what type of environment could a certain situation develop?
  • Will someone be able to see warning signs that something is wrong?
  • What can people do to change the situation once they determine that something is wrong?

Additional questions may include:

  • Could a specific crisis escalate? How quickly?
  • How will a specific crisis interrupt or interfere with normal business operations?
  • If your company or business experienced a crisis, would national news media or government regulatory agencies be alerted? (While this is not to say that one type of industry, business, or corporation is more important than any other, bad public relations, media exposure, criticism, and damage to reputations can ruin a business overnight).
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Develop a number of scenarios that offer a variety of likelihoods. Sometimes the odds might be considered pretty high for something to happen, while others might generate a very slim chance. While it would not be conducive to plan for extremely unlikely scenarios, managers and administrators should carefully look at their industry, their company, the departments in their company, and access and analyze the potential risks.

If possible, assign numerical values to the impact or likelihood of a crisis or emergency situation occurring. For example, a scenario that is extremely unlikely to occur may be rated 1, while other scenarios that have a true potential or possibility should be rated 10.

Taking such steps will help prepare managers and supervisors to keep their eyes out for potential problems before they reach the crisis stage.

Preparation for natural disasters such as fire, earthquake, hurricanes, or floods require that managers and supervisors devise and create emergency or evacuation plans to protect not only employees but property, as well as preventing scenarios such as explosions, gas leakage, or other potential hazards that may develop as a result of a natural disaster.

Take the time to analyze damage estimates now. Don't wait for a catastrophe to happen.

Compliance

In determining potential crises that may occur in any environment, human response must be taken into consideration. For example, compliance with federal, state, and county rules and regulations must be understood and followed in order to maintain accountability and responsibility.

Employees must comply with industry, company, or business rules for the safety and benefit of all. For example, smoking in an environment where hazardous vapors or chemicals are stored may severely endanger not only other employees but the business itself. Managers and supervisors must ensure that employees are following safety regulations and guidelines in such situations. A company or a manager who is unable to maintain compliance with such regulations is in danger of facing a crisis that could result in damages, lawsuits, or loss of reputation sometime in the future.

Training and Information Management

Remember when you were in school and you endured fairly regular fire alarms, at which point you were required to get into a line at a certain door and then move with your classroom to a designated area on the playground or field? This is a prime example of crisis management training in one environment. The action is performed repeatedly to ensure that in the event of an emergency, students and teachers may experience the best outcome scenarios.

Training and information regarding evacuation and emergency procedures is essential in crisis management planning. Every individual, employee, manager, or supervisor, from the janitor to the CEO of a corporation should be provided materials regarding physical crisis management procedures and evacuation policies for his or her place of business.

The first order of business for any employer, regardless of how large or small, should be to offer at least the basics in emergency management planning. All employees should be offered an evacuation plan and protocols for emergencies or natural disasters.

Information managers, personnel supervisors, and human resources departments should be the leaders in the flow of information regarding crisis planning and its management.

Planning Basics

Crisis management means developing a plan of action ahead of time. While every possible situation cannot be anticipated, careful analysis should develop a list of potential issues and worst case scenarios. Planning for a variety of contingencies may take several steps including:

  • Organizing a planning or crisis management team.
  • Developing a plan of action.
  • Continually reviewing and updating the plan.

Planning means organizing the skills, experiences, and opinions of a variety of individuals who meet the needs of employees' security, community responsibility, and environmental safety.

Managers and supervisors should examine what if scenarios and explore the likelihood of various problems or issues to determine the impact that such events would have on their business.

The focus of any crisis response is to contain or neutralize damage or potential fallout from an emergency or crisis situation. In such scenarios, communication is vital to success.

The best plan in the world will not do any good if information regarding the plan, what to do in emergencies, or how to handle difficult or potentially damaging situations is not shared with crisis team members, managers, supervisors, and even employees.

Plans should be updated regularly, as well as approached from different angles. It may be difficult to anticipate every situation, but when a team comes up with some sort of crisis management plan, its participants should envision situations that may derail planned responses. This helps to ensure the success of a crisis response and helps individuals prepare for even more unexpected details or potential situations.

Individuals involved in creating crisis response plans or those designated as part of a crisis management team must be able to show flexibility, quick thinking skills, authority, and the ability to make split second decisions.

Conclusion

Some crises happen immediately, while others may take longer to develop and form. Being able to recognize various stages of a crisis is essential for crisis management teams, managers, and supervisors.

Crisis Stages

Introduction

In most situations, a crisis is precipitated by warning signs. It's up to individuals to detect these signs, which may be overt or subtle. Basically, there are four stages of a crisis, and while given different names, they define the same situations. Warning signs, the crisis itself, recovering from the crisis, and actions taken following a crisis are also known respectively, as the precursory crisis stage, the acute stage, the chronic stage, and the crisis resolution stage. Regardless of terminology, they all mean the same thing. A crisis may even be thought of as a sickness, with early warning signs being symptoms, followed by fever, a struggle to overcome the sickness, and finally the recovery period.

Warning Signs

Warning signs of an impending crisis may be likened to the symptoms of an illness. In the body, a pain here, a twinge there, may be ignored; but if pain becomes constant, individuals usually pay attention. A person suffering a 24-hour bug is less likely to be alarmed than an individual who notices increasingly worsening symptoms as time goes by.

Unfortunately, there are times when a person who believes that he or she has a 24-hour flu bug may very well be developing something worse, such as appendicitis, a blood clot, stroke, or heart attack.

As you can see, identifying, recognizing, and paying attention to warning signs for possible illness are the same steps that individuals should take in their place of work. Warning signs give us a heads up to potential problems down the line. They should not be ignored, no matter how minor they may seem.

Warning signs may take a variety of shapes, some expected others not so obvious. Learning to understand what potentially signals a crisis and knowing how to react to such signals depends on the industry, business, or situation. Some signals of impending danger are obvious, such as smoke from a fire, hurricane or tornado warnings, or potential floods.

Warning signs may also be found in disgruntled employees, missed deadlines, interruption of workflow, technical problems that disrupt delivery schedules. Even warnings and notices from building inspectors, health officials, or regulatory organizations such as the Occupational Safety and Health Administration (OSHA), rumors, complaints by employees or customers, and more.

Managers, supervisors, and business leaders must keep their ears to the ground and their fingers on the pulse of customers, employees, and the internal workings of a business environment to be aware of warning signs that convey a lack of concern, indifference, apathy, resentment, or even sabotage.

A sign of an impending crisis for any business is a lack of consumer interest in a product or service. For example, let's say a company devises a chemical to help extend the shelf life of produce. While the chemical isn't inherently dangerous to human health or safety, knowledge of its use may alarm consumers, so the chief executive officer decides not to reveal that the company is making use of this chemical.

The potential for catastrophe in such a situation may be obvious to some but not to the CEO. Failure to offer full transparency regarding a product may very well endanger the reputation, trust, and loyalty that consumers feel for the company.

Public opinion and consumer trust placed in any business or social environment should not be underestimated. It doesn't matter whether the chemical used to preserve the produce was safe or not. The fact that the CEO didn't reveal use of this chemical is enough to damage the public's concept of trust for the company, leading to a drop in stock shares, orders, consumer confidence, purchases, and eventually, the future of the company itself.

Following are some signs that may suggest impending issues.
Warnings from Safety or Health Organizations
Most business environments, including hospitals, long term care facilities, factories, and assembly lines, regularly receive visitors from OSHA, union representatives, and accreditation or certification organizations that ensure the safety and protection of employees and the general public.

A long term care facility that receives low scores regarding procedures, care, or protection for its residents may soon find its doors locked, its employees let go, and its revenue severely diminished. A restaurant that experiences repeated visits or low scores by safety, building, or health inspectors may soon find itself out of business.

Schools, night clubs, restaurants, and other places where the public relies on owners or administrators to provide safety are under constant scrutiny. Failing to observe basic safety or health standards or consistently receiving low or mediocre marks in such areas is an obvious sign that things need to change.

Rumors

Rumors, suspicion, or doubt regarding the loyalty, honesty, or transparency of a business may weaken consumer faith in that organization, as well as engender distrust and suspicion of its employees. Rumors have a way of traveling the grapevine in most environments, from schools, to hospitals, to global corporations.

While some rumors dissipate quickly, others are often founded in a kernel of truth and offer warning signs of potential or impending issues that may lead to a crisis. For example, consider a CEO who has heard a rumor that the president of a partner corporation is under suspicion of embezzlement. The CEO, a friend of the president for decades, refuses to believe it.

Unfortunately, while the CEO ignored the situation, the president had been taking steps to hide the embezzlement and even started rumors of his own regarding the honesty of his friend, the CEO. By the time the CEO heard about it and decided to take action with members of the board, the reputations of both had been tarnished. The media heard about the rumors and reported them in local newspapers. Bad news travels fast, and it was not long before national papers were picking up the story.

As a result, stockholders sold shares, business partners hesitated to invest in the company, and within a year, the CEO realized he had lost many of his major investors. Within another year, the CEO filed in bankruptcy court.

Rumors unsubstantiated or not, carry with them the power to destroy. If the CEO had paid more serious attention to the rumors regarding embezzlement, he may have prevented the eventual collapse of the company.

Complaints

Ongoing or persistent complaints from employees or customers are also warning signs that should be heeded in any environment. Complaints of customers or employees who believe that products, services, or a work environment are hazardous or poorly designed should be heeded seriously by team managers, supervisors, and CEOs.

These days, reputation, transparency, and obvious concern for customer or employee satisfaction are the bulwark of a successful business. Lax management standards or those that fail to follow regulatory rules regarding practices, sales, hiring, or safety may very well find themselves facing an emergency or crisis situation in the future.

Failure to heed the warnings, complaints, or concerns of low ranking employees may also prove dangerous. For example, the explosion of the U.S. space shuttle Challenger in the late 1980s is an example of upper management ignoring lower management. In this situation, a major contractor responsible for the construction of the shuttle ignored internal memos demanding attention to potentially dangerous engineering issues. Unfortunately, ignoring these complaints may well have been partly responsible for the disaster and loss of human life that followed.

Crisis Point

Dealing with an emergency or crisis requires immediate decision and action on the part of a crisis management team. The first consideration in any crisis or emergency should be the safety and security of human life. Crisis managers should maintain a visible presence in the event of emergencies or in the handling of any crisis situation and communicate with those required to take action.

Management, crisis team personnel, and even CEOs, administrators, and superintendents should, whenever possible, be present during a crisis or crisis containment scenario to send the message that they are serious about the situation and are on hand to offer help, support, information, or direction.

For example, after the Exxon Valdez accident, Exxon's CEO didn't appear at the scene for several weeks, leading many to believe that he was more interested in distancing himself from blame than offering information at the scene or efforts to deal with the crisis.

Communication with the public and with shareholders or stockholders, employees, suppliers, and other business partners in such situations shows that while the news is bad, the situation, including pain, anger, loss of life, responsibility, or resolution, are being addressed immediately and as efficiently and effectively as possible.

Resolution

The resolution part of a crisis may also be called the recovery or post crisis stage. This stage is the period of time after the incident has occurred and damage control measures have been initiated. The objective at this point is to gain control of the situation as quickly as possible and determine the most efficient methods of achieving the resolution of the crisis.

This stage may also offer the turning point for a situation, leader, or CEO, as well as the reputation and future of a company or business. Actions and decisions during this period will be carefully examined and analyzed by the public, the media, and other business or industry associates. In a way, the resolution stage may be likened to shoring up a mine tunnel that has partially collapsed. The job repairing the tunnel should prevent future cave-ins. Failure to do so may result in another crisis situation.

Conclusion

Murphy's Law and expressions such as "bad things happen in threes" and "waiting for the other shoe to drop," suggest the possibility of a single crisis expanding into something like a domino effect. Because it is extremely important for individuals responsible for establishing control to take action during a crisis, it is extremely important to choose members of a crisis management team that are efficient, effective, and able to give their best in such situations.

 
 
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