Understanding crisis management

UNDERSTANDING CRISIS
MANAGEMENT
Dhiraj Lal
Executive Director, Continuity and Resilience
dhiraj@continuityandresilience.com - +971-52-9263933, +971-56-6902060

© Continuity and Resilience – Copyright 2013

Introduction to Dhiraj Lal
• Professional Certifications
• Fellow of the British Computer Society (FBCS)
• Member of the Business Continuity Institute
(MBCI)
• Certified Business Continuity Professional (CBCP)
• Certified Information Security Auditor (CISA)
• ITIL Foundation and Six Sigma Certified
• BS 25999 Lead Auditor
• BSI‘s First Technical Expert on BS 25999 in Asia
• Prior Corporate Appointments
• American Express
• Citibank NA
• Standard Chartered Bank
• Agilent Technologies (HP promoted)

AGENDA
• What is a crisis
• Terminology
• Criticality of crisis management
• Crisis Management Frameworks
• Crisis Communications


© Continuity and Resilience – Copyright
2013

Crisis- some definitions
PAS 200:2011 Crisis
Management Guidance
and Good Practice.

• An inherently abnormal, unstable and complex situation
that represents a threat to the strategic objectives,
reputation or existence of an organisation

NATO

• A national or international situation where there is a
threat to priority, values, interests or goals

UK Department for
Business Innovation and
Skills (BIS)

• 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

Seeger, M.W., Sell now,
T.L., & Ulmer, R.R. (2003)


• A specific, unexpected, and non‐routine event or series
of events that create high levels of uncertainty and
threaten or are perceived to threaten an organisation‘s
high priority goals

4

Are you prepared for these!


5

Some Crisis situations
Protests

Assault - of a staff
or visitor

Sexual
harassment

Criminal activity

Health
emergency

Fire or explosion

Accident

Bomb threat

Natural disaster
(flood,
earthquake, etc.)

VIP visit

Power outage

And many, many more!

6

Food for thought
In your personal life, have you ever
faced a sudden and unexpected
situation which threatens to derail your
plans?


7

Have you ever….
 Lost your wallet? Including credit cards, driving
license etc?
 Lost your phone (& the phone directory)?
 Not had internet access when you badly needed it?
 Been locked out of your house or your car?
 Had a flat tyre when you had some place to go
urgently ?

Could we call any of the situations above as a
crisis?

8

Possible impact of a Crisis
•

Lost reputation

•

Regulatory violations

•

Injury, loss of life

•

Loss of customer/stakeholder confidence

•

Re-work, damage control, frustration

•

Lost revenues and re-work costs

•

Business interruption costs


Financial Impact
Companies that did not have a crisis plan
performed poorly over time


10

Coming out stronger
Companies that had a crisis plan showed
an increase in price share after an event


11

Need for Crisis Management


12

Classification of a crisis
• May or may not
Natural

Manmade

be predictable
• Could have a pattern
• Likely to have high

Accidental

negative consequences
• Emotionally hazardous


13

Natural Crises
Earthquake

• More

Floods
Volcanic
eruptions

Wildfire

predictable
than others

Tsunami

Tornadoes

• Intensity

Heat/ Cold
waves

Blizzards/ Storms

Hailstorms

can vary
• Cascade

Droughts
Cyclones


effect
14

Manmade Crises
• Riots, Confrontations
• Strikes

• Workplace violence
• Misdeeds, fraud
• Rumours, Sabotage
• Sexual Harassment
• Slander, Reputational issues

15

Accidental Crises
• Fire

• Building collapse
• Explosions
• Leakage of hazardous
chemicals
• Damage to life and
property

16

Real Life Crisis


17

Some Other Real Life Crises
Event

Overview

Titanic

In 1912, the Titanic, a Trans-Atlantic ship on its maiden voyage, hit an iceberg
and sank. Though some people escaped by lifeboats, there were still 1,502
people killed.

Chernobyl disaster

In 1986, reactor number four at the Chernobyl Nuclear Power Plant located in
the Soviet Union near Pripyat in Ukraine exploded. Large areas in Ukraine,
Belarus, and Russia were badly contaminated, resulting in the evacuation and
resettlement of over 336,000 people.

Exxon Valdez oil spill

In 1989, the Exxon Valdez oil tanker ran aground, spilling 250,000 barrels, an
amount equal to more than 10 million gallons, of oil into Alaska's Prince
William Sound. Efforts to contain the spill were slow and Exxon's response
was even slower.

Halifax Explosion

In 1917, in the harbor of Halifax in the Canadian province of Nova Scotia, the
Mont Blanc, a French munitions ship, explodes 20 minutes after colliding with
another vessel. The massive explosion killed more than 1,800 people, injured
another 9,000--including blinding 200--and destroyed almost the entire north
end of the city of Halifax, including more than 1,600 homes.

Banqiao Dam Collapse

In 1975, catastrophic dam failure in western Henan province, China, caused by
a typhoon (tropical cyclone) caused more than 150,000 casualties, making it
one of the deadliest typhoon disasters in history.

Bradford City Stadium Fire

In 1985, the worst fire disaster in the history of British football occurred during
a league match in front of record numbers of spectators killing 56 and injuring
at least 265.


18

What can we do differently?

Minimize impact
by preventing
crisis situations
from arising

Plan response
and recovery
activities.

Rehearse and
keep the
organization
prepared if crisis
situations arise.

Deal with the
crisis in the
shortest time
possible, and so
minimize impact

CRISIS MANAGEMENT


19

Crisis Management
• Proactively identification
• Preparation
• Effective response
• Restoring business as usual
• Plugging gaps which triggered the
crisis
• Incorporating learning outcomes

20

What are we dealing with?

• Complex and dynamic systems

• Emerging risk and human actions
• Uncertainties – challenges of managing
the unknown or unexpected

Our only hope is widely embraced in
the concept of ― Resilience‖
Resilience is
the capability
of a social
system

Focuses on
expected and
unexpected
disturbances

It is mission
oriented and
an applied
science
21

Planning helps in:
• Preparing crisis plans in advance and ensuring that an
organization is appropriately prepared for a crisis.
• Rehearsing a crisis plan by crisis management teams via a

simulated scenario to use as a drill.
• Indicating how quickly each function should be performed as
the first hours after a crisis breaks are the most crucial.

• Preparing crisis communication statement for external and
internal stakeholders.
• Including information and guidance in the contingency plan

pertaining to short-term consequences and long-term effects
to help decision makers.


22

Common features of a crisis
• Situation materializes unexpectedly
• Quick decisions required
• Less time at hand
• High pressure situation
• Urgency of information seeker

• Interruption to routine business
• Difficulty in communication
• Attracts outside attention

23

Crisis Management Perspective
A range of emotions:

Denial

“This could not have
happened.”


Anger

Panic

Anxiety

“How could this have
happened?”

Panic
prevents reason and

“How do I tackle
this situation?”

“How could somebody
do that?”

logical thinking

“Will I be able to
get out of it?”

24

Strategies


25

Crisis Management Stages

Detection

Preparation
and
Prevention


Containment
and Damage
Control

Business
Recovery

Learning

26

The Publicly Available Specification (PAS)

was sponsored by the UK Cabinet Office,
to support top managers in executing
their Crisis Management responsibilities.

27

PAS 200:2011 – Contents
1 Scope
2 Terms and definitions
3 Understanding crises

4 Developing crisis management capability
5 Planning and preparing for crisis response and recovery
6 Communication in a crisis
7 Evaluating crisis management capability

28

PAS 200 summary
Development and maintenance of crisis
management capability
Emphasizes inclusion in the organization‘s
governance & strategy review processes
Prepares procedures for a coherent crisis
management and BCM response
Helps in implementing horizon scanning and
internal systems-based analysis disciplines
Addresses core communication needs of staff
and key stakeholders
Focuses on all the elements of an
organization‘s crisis management capability


Preparation and Prevention

• The diagnosis helps in assessing company‗s
state, define the symptoms of the problem and
features of the potential crisis.
• Diagnosis helps management in fixing threshold
for showing the uncomplimentary results
determining crisis situation appearance.
• The earlier crisis is diagnosed, the faster
particular anti-crisis means are chosen and the
loss is smaller.

30

Preparation and Prevention

• Pre crisis preparation involves planning and
creation of structures to deliver a crisis response.
• Implementation of a programme of training and

exercising.
• It is during this stage that crisis handlers begin
preparing for or averting the crisis that had been

foreshadowed in the signal detection stage.

31

Containment & Damage Control

• The goal is to limit the reputational, financial,
safety, and other threats to firm survival.
• Bring the crisis to an end as quickly as possible

to limit the negative publicity to the organization
• Early containment of Crisis helps to move

into the business recovery phase.
• Corrective & preventive actions to preclude the
recurrence similar crisis situation and business

recovery actions to restore public confidence

32

Business Recovery

•

Post crisis focus should be on rebuilding, which can be time-consuming and
expensive.

•

Organization has to make adequate financial arrangements beforehand,
should there be a threat of any such crisis occurring.

•

All damages and losses should be accounted for in detail, with photographs
and/or video proof maintained along with them.

•

Having an effective crisis management plan helps the organization or the
entity get back to normal without losing too much time or money.

•

Once the crisis has passed, it is very important to review the effectiveness of
the crisis management plan to correct any shortcomings.


33

Lessons Learned and Evaluation

• Describes techniques and processes for
evaluating the organization‘s
preparedness and capability.

Evaluation

Training

Awareness


Exercise Design
Coordination

Planning and Preparation
SITE CRISIS RESPONSE PLAN

POLICY AND LEADERSHIP

CRISIS MANAGEMENT PLAN

Provides foundation, framework for
action

Provides structure, mechanisms for

Provides roles, responsibilities for

operational response

staff for coordinated response to
more frequently occurring incidents

CRISIS RESPONSE TEAM

Site level response personnel

COMMUNICATION

TRAINING

Foundation of any crisis planning,

Maintains preparedness and helps in

implementation, management and

knowing what to do is crucial

recovery effort


35

Crisis Management Plan
• The step by step plan procedures should address;

• Assignment of responsibility to staff members
• Special needs of affected individuals
• Notification of local emergency services

• List of emergency telephone numbers
• Provisions to shelter people inside the site
or identification of evacuation assembly areas outside of the

site
• Evacuation plans if it‘s necessary to leave the site and
aarrangements for transportation

• Protection of valuable records

36

Crisis Command
Crisis Leader/
Crisis Coordinator
Liaison Officer

First Aid Coordinator

Staff
Coordinator Safety

Staff family Liaison

Operations Officer

Documents
Officer

District Crisis
Response Team
Other Support
Personnel

Crisis Recovery
Coordinator


37

Crisis Management Centre
• The

Crisis

Management

Centres

(CMC) helps in management of crisis

and acts as a hub.
• The duties and responsibilities of
CMC involve setting direction.

• CMC

controls

coordinates

all

activities

information

from

and
all

sources.

• Communication centres may be set
up within or away from CMC


38

Crisis Leadership
Tactical and operational level teams.
Look at issues such as:
Crisis
Management
Tools

Understanding
relationships
and stress in
crisis teams
Decision
support tools
to support the
crisis leader

The critical
issues of
decision making
and timeliness

Practical
management of
crisis

The differing
roles of the
team and the
leader

Creating a
cohesive and
motivated team

Crisis Management Team
Key roles
• Executive/CEO–
responsibility & authority
• Team leader (may be CEO)–
keep team updated and
focused
• Spokesperson– public
relations, central source of
information,
communications, rumour
control
• Legal representative– legal
guidance & implications of
actions
• Researchers– gather facts &
compile information for
position statements

Typical team composition
• Crisis Leader
• Facility management
• Legal department
• Risk management
• Information technology
• Human resources
• Financial services
• Corporate security
• Public relations/
communications

40

Crisis Leader - Competences
Critical competencies required of a good crisis
leader are :
• Ability to lead a team of experts
• Crisis communication expertise
• Well connected and motivational
• Courageous and decisive

• Good Listener
• Awareness and good general knowledge
• Emotional but mentally strong
• Integrative thinker

41

Crisis Communications


42

Lack of communication could
• Lead to a perception that the
company is callous or guilty
• Damage company reputation

resulting in bad press
• Loss of stakeholder confidence,
including key investors
• Loss of customers as they move across to competitors
• Loss of staff confidence in their own organisations resulting in

de-motivation
• Negative impact on the bottom line


43

Communicating in a crisis
Discusses internal and stakeholder
communications, but also includes outline

guidance on preparing to communicate
with the media and the general public.

Communications
Strategy

Communication
Guidelines

Communication
Methods

Issues
Management

Formal and
Informal
Communication
Structures

Barriers to
Communication

Risk
Communication

Stakeholder
Engagement

Consistency in
Communication


44

Crisis Management messages
• The foundation of any crisis response is the message that is
communicated.
• When a crisis hits, the first thing you do is figure out what the facts are

• Among the messages that are invariably part of any good crisis
response:

A succinct
explanation of
what went
wrong


An expression
of concern for
the impact
that the
situation has
on
stakeholders

A sincere
apology and
accepting
responsibility

A commitment
to address
causes

45

How to communicate
Know your audience

• Employee
• Investors/board members
• Customers

• Opinion leaders in your
community
• Elected officials
• Media/press

46

Holding Statement

Time

One point contact
Sympathize

is of the
essence be quick
and try to
make the
initial
response
within the
first hour

Availability

5Ws
Provide
some
expression What happened?
of concern Where did it happen?
for what
When did it happen?
has
happened
Who was involved?

Why did it happen?


Content

Make public
safety the
number one
priority

Tell if and
when the
spokespers
ons of the
company,
will be
available to
address

Do not have
multiple
spokespersons,
this could lead
to
contradictions

47

Social Media & CM
Using social media to get the news
Pros and cons of Social Media news and Crisis reporting

Pros
Immediacy, Anyone
can report news,
News is dissipated
quickly, Cell Phones
can reach virtually
anywhere


Cons
Limited space,
Inaccurate
information, Potential
lack of journalistic
integrity, Citizen
journalists putting
themselves in harm’s
way to get story

48

Successful Crisis Management
Tylenol (Johnson and Johnson)

•

In the fall of 1982, a murderer added 65 milligrams of
cyanide to some Tylenol capsules on store shelves, killing

seven people, including three in one family.
•

Johnson & Johnson recalled and destroyed 31 million

capsules at a cost of $100 million.
•

The affable CEO, James Burke, appeared in television ads
and at news conferences informing consumers of the
company's actions.

•

Tamper-resistant packaging was rapidly introduced, and
Tylenol sales swiftly bounced back to near pre-crisis
levels.

•

When another bottle of tainted Tylenol was discovered in
a store, it took only a matter of minutes for the
manufacturer to issue a nationwide warning that people
should not use the medication in its capsule form.


49

Mattel
•

•

•

•

•

•

Mattel Inc., the toy maker, has been plagued with
more than 28 product recalls and in Summer of 2007,
amongst problems with exports from China, faced
two product recalls in two weeks.
The company "did everything it could to get its
message out, earning high marks from consumers
and retailers.
Though upset by the situation, they were
appreciative of the company's response.
At Mattel, just after the 7 a.m. recall announcement
by federal officials, a public relations staff of 16 was
set to call reporters at the 40 biggest media outlets.
They told each to check their e-mail for a news
release outlining the recalls, invited them to a
teleconference call with executives and scheduled TV
appearances or phone conversations with Mattel's
chief executive.
The Mattel CEO Robert Eckert did 14 TV interviews on
a Tuesday in August and about 20 calls with
individual reporters. By the week's end, Mattel had
responded to more than 300 media inquiries in the
U.S. alone."


50

Pepsi
•
The Pepsi Corporation faced a crisis in 1993 which started
with claims of syringes being found in cans of diet Pepsi.
•
Pepsi urged stores not to remove the product from shelves
while it had the cans and the situation investigated.
•
This led to an arrest, which Pepsi made public and then
followed with their first video news release, showing the
production process to demonstrate that such tampering was
impossible within their factories.
•
A second video news release displayed the man arrested.
•
A third video news release showed surveillance from
a convenience store where a woman was caught replicating
the tampering incident.
•
The company simultaneously publicly worked with the FDA
during the crisis.
•
The corporation was completely open with the public
throughout, and every employee of Pepsi was kept aware of
the details.
•
This made public communications effective throughout the
crisis.
•
After the crisis had been resolved, the corporation ran a
series of special campaigns designed to thank the public for
standing by the corporation, along with coupons for further
compensation. This case served as a design for how to
handle other crisis situations.

51

Unsuccessful Crisis Management
Exxon
•
On March 24, 1989, a tanker belonging to
the Exxon Corporation ran aground in the Prince William
Sound in Alaska.
•
The Exxon Valdez spilled millions of gallons of crude oil into
the waters off Valdez, killing thousands of fish, fowl, and sea
otters.
•
Hundreds of miles of coastline were polluted and salmon
spawning runs disrupted; numerous fishermen, especially
Native Americans, lost their livelihoods.
•
Exxon, by contrast, did not react quickly in terms of dealing
with the media and the public; the CEO, Lawrence Rawl, did
not become an active part of the public relations effort and
actually shunned public involvement;
•
The company had neither a communication plan nor a
communication team in place to handle the event—in fact,
the company did not appoint a public relations manager to
its management team until 1993, 4 years after the incident;
•
Exxon established its media center in Valdez, a location too
small and too remote to handle the onslaught of media
attention; and the company acted defensively in its response
to its publics, even laying blame, at times, on other groups
such as the Coast Guard.
•
These responses also happened within days of the incident.

52

Thank you!!
 Address

Continuity and Resilience, a division of
CORE MANAGEMENT CONSULTING
PO Box 127557, Abu Dhabi, UAE

 Phone

+971 2 8152831

 Fax

+971 2 8152888

 Email

dhiraj@continuityandresilience.com
pb@continuityandresilience.com

 Address

Continuity and Resilience
CORE Integrated Management Systems Pvt. Ltd.
Level 15, Eros Corporate Towers, Nehru Place, New
Delhi 110 019 India

 Phone

+91 11 4105 5534

 Fax

+91 11 4105 5535

 Email

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www.continuityandresilience.com


Understanding crisis management

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