Kanthi BasnayakeManagement Consultant

MANAGING CRISIS FORBUSINESS SUSTAINABILITY

CRISIS

CRISIS is defined as situation that is unpredictable but it is not unexpected.

Crisis Management

• The art of dealing with sudden and unexpected events which disturbs the citizens, employees, organization as well as external clients refers to Crisis Management.

Crisis Management is..

Types of crisis

• Natural disaster• Technological crises• Confrontation• Malevolence• Crisis of deception• Crisis of

management misconduct

Common features of a crisis The situation materialises unexpectedly Decisions are required urgently Time is short Specific threats are identified Communications are increasingly difficult to manage Urgent demands for information are received There is sense of loss of control Pressures build over time Routine business become increasingly difficult Demands are made to identify someone to blame Outsiders take an unaccustomed interest Reputation suffers

Three Main Stages

6

PHASES

Pre crisis

Crisis respons

e Post-crisis.

Stages in crisis management Pre-Crisis Phase• The pre-crisis phase is concerned with prevention and

preparation. • Prevention involves seeking to reduce known risks that could

lead to a crisis. This is part of an Organization’s risk management program.

• Preparation involves creating the crisis management Plan, selecting and training the crisis management team, and conducting exercises to test the Crisis management plan and crisis management team.

Crisis Response

The crisis response is what management does and says after the crisis hits. Public relations plays a critical role in the crisis response by helping to develop the messages that are sent to various publics.

A great deal of research has examined the crisis response. That research has been divided into two sections:

(1) the initial crisis response and (2) Reputation repair and behavioral intentions

Post-Crisis Phase

• In the post-crisis phase, the organization is returning to business as usual. The crisis is no longer the focal point of management’s attention but still requires some attention.

• On the night of April 13, two Domino’s employees engaged in an act of food violation posted their acts on YouTube (putting cheese in their nose, blowing mucous on a sandwich etc). The videos went viral online, viewed by millions of people until blocked.

Toyota's recall fiasco (2010)

Toyota recalled a total of 8.8 million vehicles for safety defects, including a problem where the car's accelerator would jam, which caused multiple deaths

Key points to remember in preparing for crisis management plans

• Complete threat analysis• Review possible contingencies and follow

scenario planning• Identify critical preparations• Select crisis management team• Inform and instruct everyone• Support practice and continuous planning

improvements

contd

Develop crisis management team

Assign one leader for meeting communication crisis.

other members gather information and meet voulanteers and staff.

primary and secondary spokesman deal with media

After the crisis

Declare an end to crisis Follow up Perform an act of

goodwill Have a formal

debriefing

Communicating in a crisis is different

• In a serious crisis, all affected people . . .– Take in information differently– Process information differently– Act on information differently

• In a catastrophic event: communication is different

• Be first, be right, be credible

What Do People Feel Inside When a Disaster Looms or Occurs?

Psychological barriers:1. Denial2. Fear, anxiety, confusion, dread3. Hopelessness or helplessness4. Seldom panic

What the Public Will Ask First

• Are my family and I safe?• What have you found that may affect me?• What can I do to protect myself and my

family?• Who caused this?• Can you fix it?

What the Media Will Ask First

• What happened?• Who is in charge?• Has this been contained?• Are victims being helped?• What can we expect?• What should we do?• Why did this happen?• Did you have forewarning?

Individuals at risk—the cost?

• Demands for unneeded treatment• Dependence on special relationships (bribery)• MUPS—Multiple Unexplained Physical

Symptoms• Self-destructive behaviors• Stigmatization

Community at risk—the cost?

• Disorganized group behavior (unreasonable demands, stealing)

• Rumors, hoaxes, fraud, stigmatization• Trade/industry liabilities/losses• Diplomacy • Civil actions

Communicating in a Crisis Is Different

• Public must feel empowered – reduce fear and victimization

• Mental preparation reduces anxiety• Taking action reduces anxiety• Uncertainty must be addressed

Five Keys to Effective Communication in a Crisis

• Clarity

• Repetition

• Honesty

• Empathy

• Efficacy (Give them something to do)

How Do We Communicate About Risk in an Emergency?

All risks are not accepted equally• Voluntary vs. involuntary• Controlled personally vs. controlled by others• Familiar vs. exotic• Natural vs. manmade• Reversible vs. permanent• Statistical vs. anecdotal• Fairly vs. unfairly distributed• Affecting adults vs. affecting children

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