Despite nearly 10,000 crises occurring annually costing hundreds of billions, just one in 20 companies and organizations have created a crisis preparedness culture where they routinely assess and prepare for crises. Why so low? Perhaps they don’t understand that crisis management is far more important than just mopping up after an unfortunate event. People watch companies very closely in times of crisis. If they can be trusted to do the right thing in the depths of despair, they assuredly can be trusted to do the right thing during normal business conditions.
The greatest impact of a crisis occurs in the first 24 hours. If handled quickly and effectively, it becomes a distant memory in less than a month. If not, you could become fodder for Leno, Letterman, Colbert, and your own community and industry.
Here’s how to prepare:
Executive Mandate –Engage your executive team to commit to crisis preparedness as a core value or discipline. It requires the active involvement of virtually every corporate function. Either name a crisis preparedness team or anoint the executives to serve as your crisis team. Designate a spokesperson and backup.
Groundwork –Develop the necessary groundwork so you can respond quickly. Begin with a current mail, email and phone list of VIPs, suppliers, partners, customers, investors and media. Ideally, they should hear of any crisis from you first, and be updated periodically.
Vulnerabilities Assessment – Engage a cross-functional team to build a list of potential issues and crises. Keep in mind that 80 percent of issues are triggered by the organization itself, two-thirds of crises smolder before they become white-hot. Score them based upon probability and impact. Focus initially on those most probable and most impactful.
Mitigation Plans –Assess each potential crisis, outlining the sequence of events that occur, and how they would be handled if that crisis became a reality. By working through a number of examples, you will see a pattern of roles and responsibilities emerge. Explore possible ways to mitigate each potential risk through operational changes.
Active Planning – Nothing prepares an organization better than simulating actual crises. A table top crisis drill simulates real-life conditions, and includes the typically chaotic environment where the situation evolves with new information, along with actions by employees, inquiries from VIPs, media interviews and customer calls.
Best practices suggest that companies complete vulnerabilities assessments at least quarterly, and complete some kind of active planning at least yearly, or whenever a member of the key team changes. The team also should review how the company endured any actual crises that occurred as lessons for refining the process.
In a matter of months, your organization will no longer fear crises, but instead recognize them as just another way to demonstrate your commitment to excellence. And, chances are, your business will grow as a result of handling crises well.
Ron Arp is president of Amplify Group Inc. He can be reached at 360.601.2991.