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).

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 atastrophe
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.