Avoid a Corporate Operational Crisis. Crisis management through risk assessment

1. OPERATIONS MANAGEMENT
Developed from writings related to
‘My little Black Book’
for New or Inexperienced Managers
© 2011 Ralph Bateman

2. OPERATIONS MANAGEMENT
…within fabrication and manufacturing Industries.

3. Part four:
Crisis management through risk
assessment.
A crisis situation can arise in any area and
quickly affect the entire operation. It can
also adversely affect how your customers
perceive you as a supplier, ultimately
affecting future business relations.
As the responsible person, It can possibly
end your career.
To better understand a crisis, the Merriam –
Webster® dictionary describe it as…
OPERATIONS MANAGEMENT
Coming to the realization and belief that the
business your managing is suddenly in crisis
will be shocking to you.
Your immediate feelings will include disbelief,
anger, frustration and even fear...

4. CRISIS MANAGEMENT
a: An unstable or crucial time or
state of affairs in which a decisive
change is impending; especially:
one with the distinct possibility of
a highly undesirable outcome <a
financial crisis>
or
b: A situation that has reached a
critical phase <the environmental
crisis>

5. CRISIS MANAGEMENT
On the subject of „Crisis Management‟, Let‟s begin by asking when was the last time you asked your
functional reports to identify the single greatest risk they see to Production operations within their
department?
I‟d guess you‟ve had more meetings than you‟d like or consider productive, but I‟d also guess that
the subject of risks to your operations was not specifically raised.
When the average crisis costs corporations tens of millions of dollars in repair and recovery costs
each year, I‟d suggest your ignoring one of the most important aspects of you‟re new found
responsibility… Risk Assessment.
As managers, it’s incumbent on us to regularly carry out risk identification and assessments
of all areas that can spawn crisis within our organization.

6. CRISIS MANAGEMENT
While there are volumes written on this subject, far and beyond the best way to manage any crisis of
course… is to avoid it.
If you haven't addressed the subject in a while, I‟d recommend that within the next few days, you
arrange a staff meeting with all your functional department heads and make a simple request of
each..
“Please give me the single most critical issue that you believe exists in your department that has the
potential to stop or restrict production due to a safety, operational or quality issue”
I‟d further recommend that this topic be included into your monthly staff meeting as a means to give
visibility to the current concerns that you or your staff has relative to areas of risk.

7. CRISIS MANAGEMENT
Knowing what crisis potential exist allows us to plan ahead and mitigate that risk before it develops.
Unfortunately, there are many situations that can blind side us to such operational negatives. These
can include periods of increased output, (production spike) periods of reduced production, rapid
unexpected growth, unexpected (key) equipment failure and loss of skilled resources etc.
In almost every case, its fair to say that the effects of crisis can be mitigated by proper planning.
As an Operations Manager, its incumbent on you to not only maintain an awareness of the potential
for crisis, but act to safeguard stakeholder interests by understanding the areas of potential risk and
how to mitigate them.

8. CRISIS MANAGEMENT
The onset of crisis is primarily a breakdown in Planning or Process.
It’s also a sign of disengaged management
Knowing the mechanics of the operation that you’re now responsible for will come through the experience
you brought to the position and the tenure you will achieve in this new role.
While your developing tenure, its important for you to use your experience initially to ensure that an
unexpected crisis does not arise and potentially cut short that tenure.
Whether you’re finding yourself in crisis, appointed to recover from an existing crisis or simply hired into a
new operations management role, get engaged by conducting an initial risk assessment.

9. CRISIS MANAGEMENT
Are we engaged?
Of course, we all believe we’re engaged, but are we really, or is that just our belief?
To be engaged we need to be:
Actively FOCUSED on the issues
Directly INVOLVED in their outcomes
Always DRIVEN to achieve positive results

10. CRISIS MANAGEMENT
Having asked your direct reports the question, you’ll find it enlightening to read the responses they give.
Without realizing it, your reports may have just given you one of their goals for the upcoming review period.
The goal of course being to mitigate the risks that each have identified.
Before turning the page, try it for yourself by noting what you consider to be the greatest risk to production
operations… then compare it to what your direct reports considered the threats to be..

11. CRISIS MANAGEMENT
If you found it a little difficult to immediately identify and write down what you see as the most critical threat
to your operation, then I’d suggest your operation is already at an elevated risk.
Multiple threats will exist that if not identified and addressed,
have the potential to jump out and bite you… more often than not when you least expect it!
So, let’s begin by identifying those areas where crisis causing threats, (CCT’s) can and do exist.

12. CRISIS MANAGEMENT
One of the top three areas where operational (and business) crisis arise is in the area of…

13. OK, so you probably guessed quality was up
there, but when was the last time that you really
did carry out a fact finding risk assessment like
this?
If you did so within the past three months,
Well Done!
But now its time to repeat the
exercise.
Determining that a potential for crisis exists
before it occurs is good management practice.
CRISIS MANAGEMENT
If you don‟t think quality issues can cut short
your career,
Think Again!
La right LLC.

14. Quality in many work environment is often used
as an off the cuff remark without genuine
substance.
However, you put yourself, your colleagues and
your company at risk by ignoring this important
area of operations.
During my many years experience involved with
steel production and processing, I’ve witnessed
four major $mm dollar hits companies have had
to endure due to poor quality arising from
careless, apathetic and disengaged management
…the most recent being at the end of 2012.
CRISIS MANAGEMENT
Note that quality does not simply affect product..
It‟s in the very processes we use, and the
disciplines we enact in maintaining those
processes.
right LLC.La

15. … and satisfy yourself that its sufficiently robust to
catch issues before a valued customer does.
Remember also..
Safety and Profitability
is a
Quality operation!
CRISIS MANAGEMENT
One of your first tasks as a new Op‟s Manager?
Check your Quality Management Program…
If you’d like to review the full PowerPoint presentation, just drop me a line and I’d be pleased to share it with you.
ralphbateman@laboright.com
La right LLC.