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Crisis & Risk Management

Introduction

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Crisis happens more thanwe imagine.

They are not always easy to seeunless they affect our own lives.

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Crisis: A working definition

Definition of crisis is subjective, based onperception of:

threat to one or more of an individuals or

organizations basic values or missions,

finite time to make decisions and take action, and

lack of standard operating procedures - SOP orinability to implement SOP to address thesituation

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What is a crisis?

In general?

For an organisation?

For government or

Authority?

For a privatecompany?

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What is a Crisis?

Home here or homethere

Physical or emotional

May involve anIndividual or many

Death or seriousillness

Natural disaster

Health Concerns

?????

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What is Crisis?

A crisis is anything that

has the potential tosignificantly impact anorganization..........

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Is a Crisis Plan Needed?

Does anyone reallybelieve a plan is notneeded?

In time, you will dealwith a disaster. Willyou be ready?

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After the Crisis

Take some time

Review and revamp procedures Be prepared for the next crisis!

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A Crisis Management Plan is like aninsurance plan- you hope you never

have to use it,

but if you do, you want the plan to

be the best plan possible!

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What is Crisis Management?

The overall coordination of an organization'sresponse to a crisis, in an effective, timelymanner, with the goal of avoiding or minimizing

damage to the organization's profitability,reputation, or ability to operate.

Crisis management involves identifying a crisis,

planning a response to the crisis and confrontingand resolving the crisis.

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Crisis management objectives

Crisis management has four objectives:

Reducing tension during the incident; Demonstrating corporate commitment and

expertise

Controlling the flow and accuracy ofinformation

Managing resources effectively

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The Crisis Life Cycle

Stage one: The Storm Breaks

Stage two: The Storm Rages

Stage three: The Storm Passes

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1- The Breaking Crisis

Control seems to be slipping out of the system(company).

Lack of solid detail about the crisis. Hard-to-provide information demanded by the media,analysts and others.

Temptation to resort to a short-term focus, to

panic and to speculate.

For a period of time, everyone loses perspective.

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2- Spread and Intensification of Crisis

Speculation and reports develop in the absenceof hard facts.

Third parties- regulators, scientists and otherexperts add weight to the climate of opinion.

Corporate management comes under intenseinspection from internal and external groups.

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3- Rebuilding Needs

To manage reputation. There are opportunitiesin a crisis to build positive perceptions thatremaining beyond the crisis period.

The system embarks on a long-term programmeto tackle management issues andcommunication problems that worsened thecrisis.

T f C i i

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Types of Crisis Non Physical Damage Crisis

a. Product Issue: Credibilityb. Product Issue: Defective

c. Product Issue: Safety

d. Product Issue: Tamperinge. Negative Public Perception

f. Market Shift

g. Financial or Cash Problemh. Industrial Relations Problem

i. Adverse International Event

j. Workplace Violence

T f C i i

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Types of Crisis

Physical Damage Disasters

a. Earthquake

b. Tornado

c. Flood

d. Hurricane

e. Fire

f. Leak

g. Power Outage

h. Bombing

i. Arson

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Problems and Challenges in CrisisDecision-Making

Surprise and hesitation. The shock of a crisis can createa delay in response that allows your critics and themedia to fill the gap with negative comment andspeculation.

Pressure and stress must be channelled by the disciplineof a crisis strategy.

Mistaking information distribution for communication.

Treating key audiences as challengers.

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Good crisis management is essential, but

never a substitute for daily riskmanagement processes.

Risk management processes should applyto all stakeholders, although depth anddetail may depend on the transaction and

stakeholder.

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Crisis management

Despite a solid risk management process,there will be problems because we cannotpredict all crisis events and protect against

them.

Be prepared to deal with a crisis event andtake action immediately identifying and

assessing issues and options and obtainingexpert advice as needed.

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Crisis Communications

Good communication is the heart of anycrisis management plan.

Communication should reduce tension,

demonstrate a corporate commitment tocorrect the problem and take control of theinformation flow.

Crisis communications involvescommunicating with a variety ofconstitutes: the media, employees,neighbours, investors, regulators and

lawmakers