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Fall Crisis Preparedness Advantage

Fall Crisis Preparedness Advantage

For many businesses, Autumn is the time when you press forward to accomplish everything you’ve missed or, better, give yourself an advantage next year. Most Americans call the season Fall, which evokes another meaning of the word that is closer to failure or collapse. None of us want to fail or even think about a great Humpty Dumpty fall, That’s why it’s wise to occasionally consider and prepare for major corporate issues. To help, let’s take a few minutes to walk through giving yourself a Fall crisis preparedness advantage.

Fall crisis preparedness advantage

As with a fall, a crisis is usually rather sudden, unexpected and difficult to correct while it’s happening. If you don’t want to crack open like an egg, it helps to prepare, practice ways to minimize damage and respond as the situation demands. Ultimately, those efforts will ensure a more thoughtful, coordinated and effective response; a crisis preparedness advantage. The need is evident from the host of business, professional, societal and environmental calamities suffered over the past year. Do yourself a favor and press forward with a Fall crisis preparedness program, before it’s your downfall.

Why bother with Fall crisis preparedness?

The operations functions of most organizations recognize the risks from an operational emergency. They’ve had enough exposure to past emergencies to understand the great financial and operational cost if the emergency is not effectively addressed. That why they require serious attention to emergency preparedness, including planning and training. Sadly, less attention is given to preparing for corporate crises, even though they carry the greatest risk to organizational survival. That’s why Fall crisis preparedness planning and drills are so important. If not now, when?.  No crisis suffers fools with a corporate death-wish.

Last year, we wrote that “2017 ‘gave’” the energy and chemical industries, pipelines, railroads, and other businesses the following:

  • Workplace violence with fatalities
  • Employee theft and embezzlement
  • Sexual Assault and harassment
  • Explosions, fires, and spills
  • Hurricanes, floods, and earthquakes
  • Kidnapping of employees
  • Internal and external industrial espionage
  • Extortion of compromised employees
  • Executive misconduct
  • War, civil unrest and insurrection where we do business

 Do you see any similarities this year? Have you considered whether it might get worse next year and hit your business directly? These things happen more often than any of us want to admit. They’re also happening with greater frequency and severity.   The only real questions are when and how much. In other words, will you be next and what will be the uncontrolled damage to your organization.

crisis

Avoidance isn’t the answer

Few would have expected Houston to encounter three 500-year floods in as many years or that the latest would be a 1,000-year flood. This created corporate challenges for some companies that went well beyond the operational response. Many others would have missed the global attention spawned by the Me-Too movement. Obviously, it would have been better to resolve these issues before they became a crisis for many. However, most organizations will do well to prepare to identify and address such issues effectively, once they are known.

Don’t beat yourself up if you haven’t already prepared. It has been human nature throughout history to discount risks and expect to overcome perils. The ancient Greeks recognized the risk of arrogance and excessive pride, by making hubris the common failing in most Greek tragedies. Even so, if you’re not already in a crisis, there’s still time to initiate Fall crisis preparedness. Anything you do to overcome inertia will help you achieve a crisis preparedness advantage.

The odds of a crisis confronting a company are infinitely greater than the odds of winning the lottery. So, it’s hubris to feel immune to a crisis and/or intentionally dismiss the importance of preparation for a worst-case scenario.  The rational investment is to dedicate the time and resources needed to prepare for and prevent a crisis. Doing that could easily save your company far more than you could ever win in a lottery.

Operational vs. Corporate/Reputational

The big question is whether you will be prepared when a crisis strikes. Most companies have emergency management programs in place to address the inherent risks in their physical operations. These are important and are often institutionalized much like safety and regulatory compliance have been ingrained in their processes and are a component of company culture. Testing those programs regularly and subjecting them to external assessments creates a good and solid foundation for the basic components of Crisis Preparedness that include Emergency Management, Communications, Corporate Security and Emergency Response.

emergency management

The problem comes when it’s something unanticipated or bigger than the company’s routine operational capabilities; in other words, a crisis needing a crisis management plan, crisis management team, crisis management policy, procedure, and processes, all integrated with crisis communications and public affairs. If you have these capabilities working in full coordination, you are doing well and should have an effective and comprehensive crisis preparedness program.  If you include annual training through organized exercises, you will have a crisis preparedness advantage.

Many of the examples listed above constitute a bigger corporate crisis that could seriously damage a company’s reputation and its market value. These bigger and more complex situations require elevated crisis preparedness capabilities with crisis management plans involving executive management and more sophisticated crisis communications capabilities. Here, dispassionate wisdom and experience can make all the difference.

Crisis preparedness advantage

Crisis preparedness requires thoughtful planning and the discipline to follow through. It’s what separates great companies with staying power from those with short-term focus who won’t make it through the next downturn. Even when companies have strong, well-established crisis preparedness programs, they can easily create new vulnerabilities. Some examples are when 1) they rotate inexperienced people through supervisory responsibility for crisis management, 2) crisis management team members change without experienced replacements or trained replacements, or 3) the rate of those changes exceed the frequency of the team’s group practices.

Without strong coaching and support, an inexperienced crisis management or crisis communications professional can unintentionally expose a company to extraordinary risks. These are not only career limiting for the professional, but also for the executives overseeing the function.  Unfortunately, it may take a major accident, catastrophic event or highly visible issue for these mistakes to become apparent.

Institutional knowledge and culture are key to successful and repeatable response management. If you want to avoid these issues, then at the very minimum, arm those employees or leaders with an experienced consultant and mentor to guide them through the minefields of the risks, corporate exposures, and liabilities.

To lose what you already have in crisis preparedness and organizational resilience is a terribly expensive waste.  Readiness and preparedness for a crisis are part of a larger recipe for success.  Since few investors will tolerate a preventable loss of share value, basic measures of crisis preparedness and capability maintained to specific standards are core expectations of owners and stockholders.  Make the call and get ahead of this, while there’s still time.

Aspirational Reputation – Institutional Inspiration

Aspirational Reputation – Institutional Inspiration

Businesses have a challenge. Fortunately, they can fix it and increase their competitive advantage at the same time. The solution is to create an aspirational reputation for your company. Simply help your stakeholders believe in the great potential of your business and you will both benefit. Stakeholders who are enthused about your business will help it thrive. Likewise, you can help your stakeholders aspire to greater things by connecting them with the aspirations of your business. You can accomplish all this through authenticity and by creating institutional inspiration.

institutional inspiration

The Challenge

The challenge is that many American’s have lost confidence in a better life for themselves and their children. This has been reflected in recent elections and is felt despite remarkably low unemployment. Interestingly, you can see this in many other parts of the world, as well. This is both a societal problem and a real concern for businesses.

A disaffected population can constrain the economy and increase costs to society. Concurrently, disaffected populations are gravitating toward stronger political leadership to guide and protect them in more difficult times. This phenomenon was seen in the rise of fascism following the disruption of World War I and during the global depression of the 1930s. Significantly, some analysts see a parallel in the current dislocation of the tech revolution and globalization.

With large segments of the population feeling abandoned or even betrayed by elites, the risks to businesses are real. As businesses respond to growing technological and competitive challenges, the gulf between business elites and the have-nots widens. Businesses need to bridge this gap before they become the target.

Why Business Should Act

If the problem is frustration and resignation, the best defense may be to provide opportunities worthy of enthusiasm. Remember, businesses need consumer confidence, an engaged workforce and enthusiastic stakeholders to do well. Fortunately, developing an aspirational reputation builds enthusiasm and makes stakeholders want to associate with your business. The key is to advance institutional inspiration in communication programs and as a priority for both leaders and employees.

aspirational reputation

Most businesses do much better when public sentiment is positive. This is particularly evident when sentiment about an individual business is favorable. When a business encourages its stakeholders to see the business as a positive force that improves conditions, it builds an aspirational reputation. This is a reputation that facilitates a positive outlook and a belief that association with the business makes those associated with it better.

Aspirational Taglines

Advertising can be a very effective tool for capturing the sentiment of an aspirational reputation. Consider these slogans and you should see what we mean:

  • We bring good things to life
  • Be all you can be
  • I think, therefore IBM
  • Just Do It
  • Think Different
  • We Try Harder
  • The Few. The Proud. The Marines.
  • Don’t be Evil

Of course, there’s much more to a company’s reputation than a slogan or tagline, but they help illustrate the concept. In addition, when a company with an aspirational reputation moves on from a specific slogan that can also indicate a shift in focus that will ultimately change the culture and reputation. Some might argue that GE dropping We Bring Good Things to Life coincided with a challenging period of change for the company.

In most cases, great taglines come long after a fundamental philosophy and culture are formulated by leaders and influencers. In some cases, the actual terms are formulated by leaders and influencers.  For instance, Thomas J. Watson first used the slogan Think in 1911 before IBM was formed and three-quarters of a century before the slogan “I think, therefore IBM” was coined.

Impact of Aspirational Reputation

Similarly, Google’s Don’t be evil manifesto was put forward nearly two decades ago by influential employees. This employee engagement is consistent with its more open and participatory style. Of course, some might argue whether the manifesto is controlling, but you can still see how it affects decisions. Interestingly, their willingness to forgo expediency and short-term gains in the early years may have helped deliver long-term success for Google.

These examples reflect the aspirational reputations of world-class companies, but they are important for emerging companies too. Ultimately, finding ways to inspire stakeholders can yield great value. Motivated employees are more productive, and often more innovative and engaged. Investors are more enthusiastic about the company and less likely to create distractions by finding fault. Customers find products more desirable and show greater brand loyalty. Communities welcome those who bring opportunity and elevate the region’s status.

Institutional Inspiration

How do you inspire stakeholders? Often it starts with the leader of the enterprise. Leaders inspire in many ways and the choices often reflect the leader’s individual style. They can inspire through principles, actions, ideas or even art. If that inspiration causes stakeholders to see the potential greatness of the enterprise, then that will begin an aspirational reputation. The leader may be essential to the effort but is rarely able to do it alone.

institutional inspiration aspirational reputation

Even a cursory study of change management demonstrates the importance of coordinated and consistent efforts to promote change. Since communication and motivation are so important, here are ten steps to help establish institutional inspiration:

  1. CEO presentations to all employees and various stakeholder groups, through video, blog, speech or announcement
  2. CEO discussions with executives to reinforce messages and secure buy-in
  3. Management team presentations to their reports and group meetings
  4. Town hall meetings
  5. Stories in internal publications, video or intranet
  6. Messaging in public speeches, analyst and community meetings
  7. Incorporate messages in web and promotional materials
  8. Consider updating boilerplate, vision and values
  9. Awards and recognition for those who demonstrate the inspirational change
  10. Incorporate in advertising and branding

Comprehensive Aspirational Reputation Program

Reinforcing the message across several channels is important in creating institutional inspiration, which will lead to an aspirational reputation. Furthermore, to resonate with audiences and seem authentic, you should go further than repetition. For instance, appeal to different styles by incorporating several genres into your communication programs. Corporate communications, advertising, and marketing can be important partners in these efforts.

Imagine the president of your company speaking from the heart about your organization’s potential for greatness and then positively reinforcing this with people throughout the enterprise. Now add uplifting theme music such as Classical Gas and people will start associating your positive messages and the uplifting music. Now create visual design and carefully researched slogans that reinforce culturally authentic messaging. The result could be a truly aspirational reputation that makes stakeholders want to be associated with your company.

Crisis Assessment Team – Emerging Concern

Crisis Assessment Team – Emerging Concern

The best prospect for overcoming a crisis comes from recognizing an emerging concern while there is still time to act. A process for providing a timely crisis alert to management greatly improves the prospects for an appropriate, capable and successful response. Of course, that begs the question of how you know it is a crisis. If you respond to every emerging concern you’ll wear down and dilute your capabilities, but if you resist all activation you may permanently damage the company’s reputation. It can be difficult to get consistent, knowledgeable perspectives that allow you to respond quickly and effectively. A Crisis Assessment Team can provide that tool very effectively and efficiently.

Emerging Concern, Crisis Alert and Crisis Assessment Team

A Crisis Assessment Team is a small group with relevant perspectives and responsibilities that determine the nature of any unexpected issue or event and surmises its potential effect on the business.  In essence, they look at the initial information and determine whether the emerging concern is a crisis or something different.

The most common error we see is the assumption that a crisis and emergency are fundamentally referring to the same thing.  While they may overlap, they have very different impacts on the company. An emergency is generally an operational matter requiring coordinated responses to protect health, safety, environment or security of the people and operations associated with the incident.

A crisis is a corporate concern involving a threat to the reputation, finances, stakeholder relationships or viability of the business. An emerging crisis can threaten a company’s social license to operate, just as an emergency can threaten a facility. A crisis is a unique situation that may arise from an emergency but also arises from many other corporate issues that go well beyond what is applicable for an emergency response.  The trick for leadership is to determine when they have crisis potential and since an emerging concern is a matter of perspective, it’s important to get the right people’s perspectives in the very beginning.

Since emergency management processes have been extensively drilled for years, asset-based organizations common in manufacturing, oil, gas, chemicals, and energy typically think of crisis events that can be observed visually such as fires, spills, explosions, multiple injuries and similar events that are associated with rescues, flashing lights, and sirens.  Even though those are horrible situations, it’s not always true that those events equal a crisis.  Depending on the preparedness and response capabilities of an organization, many of those events could be classified as emergencies only.

Conversely crisis situations can originate from emergencies but often originate from things that are not easily observed such as leaks about earnings or production, reputation attacks, improper relationships, ethics violations, criminal activity or rumors.  It’s important to quickly distinguish the potential of any event of significance and give it an insightful review by those who are best able to put it in the appropriate context to ascertain its potential and figuratively sound the crisis alarm.

You may be saying to yourself that you already have this system in place.  You may also be familiar with different risk, rank or consequence modeling tools that use the words like “tier”, “category” or “level” for categorizing risks, labeling emergencies, levels of response and financial losses.   Those tools are designed to highlight the interests and focus of the disciplines that typically use them.  Health, Safety & Environment (HSE), Security and Risk Management departments, as well as the National Response Center and other government agencies that regulate industries commonly use these systems and measurement terms.

However, despite the information these tools provide, they almost never translate into a usable “big picture” characterization of the emerging crisis issue and a problem for company leadership.  These tools are guides and technical management instruments that assist with the organization of resources and levels of capital commitment expected.

Unfortunately, those classification tools don’t give you that “special picture” that comes from senior level perspectives, instincts, and experience.  That’s the purpose of a Crisis Assessment Team; to quickly get focus on the “special picture” that characterizes the potential for a catastrophe to the company.  That picture doesn’t organically focus when you’re presented with “This is a Tier 3 event”, “we have a level 4 risk” or “this qualifies as a category 2”.  Those classifications are critical for any number of things but they’re not what we’re talking about.

Who are the people that can really determine you have a crisis or if crisis potential is present?  When should those people try to make those determinations?  Wouldn’t it be better if those people knew about such an event up front before it got out of hand?

We know of many crisis events that started out simply as a small wound but quickly festered and became septic for the company.  They were routine emergencies, security or public relations issues that strayed off course and weren’t known by leadership until the crisis was evident to everyone.  Many times, those leaders will say that they could have seen it coming and mitigated the situation if they had known or been involved from the beginning, but no corporate executive can be expected to handle everything.

Emerging Concern, Crisis Alert and Crisis Assessment Team

It’s that situation that a Crisis Assessment Team will help to avoid or mitigate.  They’ll be able to activate the crisis management team with authority and sense of purpose.  Leadership won’t be coming in after the fact and attempting to catch up or come from behind.

Given a set of simple parameters defining when a Crisis Assessment Team notification is warranted, the evaluation of any situation can be done in just a few minutes either in person or using controlled secure communications.  The team could be composed of the following or their equivalent.

  1. Senior Crisis Management Process Owner
  2. A senior leader of the affected business, asset, function or department
  3. Senior Counsel – A senior attorney that thoroughly understands company operations and positioning.
  4. A senior leader of Communications and Public Affairs
  5. Head of Health, Safety, Environment, and Security

From a quick and candid discussion, an emerging concern can be evaluated for its potential impact to the overall operations of the company, potential to result in litigation, potential impact to the safety and security of employees and the public, and potential for damaging media, stakeholder or government involvement.

Of course, there are many reporting and notification plans and systems in every industry.  Many already have a mechanism for this type of evaluation in the process, but it usually waits until the emerging concern is sufficiently advanced to warrant executive notification through some sort of crisis alert. The idea here is to instead establish a quick, unobtrusive mechanism to advise and involve the crisis assessment team early.

Even if a decision is made to wait and observe with no crisis management team activation, at least they’re aware of the wound and can provide first aid or choose to see if it will heal on its own.  The dominant purpose of a Crisis Assessment Team is to get leadership awareness at the earliest possible moment.  They can decide that activating the crisis team is immediately warranted, not warranted or needed in a limited capacity.  At least they’ll have options from the beginning rather than waiting until the issue is already cemented or lost.

Managing the Unthinkable

 

Managing Unthinkable

Even the unthinkable needs to be managed.

When your business depends upon it,

you can count on Corporate Crisis Group.

 

Transformational Crisis Issues

Transformational Crisis Issues

If managing the unfamiliar world of a transformational crisis keeps you awake at night, you’re not alone. Many top executives worry most about bet the company, reputation destroying problems and crisis issues they cannot anticipate or control. Part of the reason is they are dealing with the unknown. They can’t even know whether it will be a scandal, terrorism, a sudden change in public sentiment or some other unknown that will bring their company to possible ruin.

transformational crisis issues

Companies can face much worse, but you can be sure there has been much consternation at Facebook in recent weeks. One moment they seem to be handling the pesky problem of government concern, with a couple of officials even making petulant comments implying that the government just doesn’t get it. Then there were more revelations and soon the headlines included words such as Scandal and Game Changer.

One of the problems with a transformational crisis is that you really don’t know with certainty whether, when or where the next shoe will drop. It’s akin to an emergency response where you don’t want to state the reason for a major industrial incident before the investigation is completed, only it’s on steroids. At the same time, you need to do what you can. The best start is to have integrated crisis communications and crisis management programs in place.

In a previous post, we discussed ten crisis scenarios, but that only alluded to the kinds of surprises that await you in a transformational crisis and the crisis issues that may confront you. Now, to give you a head start we will give you some examples of the unexpected situations you may find in transformational crisis issues:

crisis issues transformational crisis

  1. Bankruptcy – You may just find it amusing when they pull the water cooler out of your breakroom, but that will change quickly when you learn that your PR firm won’t support you anymore and you can’t operate some of your communication channels without the “non-essential” support staff you lost. Many of your trusted vendors are not getting paid for past work and unless they understand what’s going on they may become your adversaries. The outside attorneys seem to be managing everything and they are now representing your company in Congressional inquiries. Their focus is on preventing greater legal risks rather than maintaining good relations. You can kiss goodbye the Congressional support you were getting in an international dispute.
  2. Litigation – Controlling the company’s legal risks has become the priority and outside counsel’s role has become increasingly important. Unless you have remarkably insightful counsel, your relationship preserving and building efforts will be pushed to the side. You may also find that some of your most trusted internal sources and even top executives are not as helpful because of their own personal jeopardy. They may be getting personal legal advice that is at odds with your view of the company’s best interests.
  3. Hostile takeovers/activist investors – With an activist investor or hostile takeover you can assume they have been carefully studying you for some time. They know what they are doing and have thought through the process many steps in advance. You seek additional support from firms or allies only to find them conflicted. You also need to consider how people’s short-term self-interest can override the long-term perspective you used to admire in them. If you address these assaults in the standard way, without entertaining creative thought and analysis, you may find that your every action has already been anticipated and successfully blocked.
  4. Third party incidents – If you are a business partner, customer, transporter, industry peer or otherwise associated with another company’s crisis, you will find yourself drawn in. Apple’s response to the Facebook scandal highlights this. Even in industries that consciously avoid criticizing other companies, something will slip. An intemperate comment from a lower level employee can draw you in. If the public reaction to their crisis is strong, you can be sure that there will be great interest by elected officials and this could result in punitive legislation that punishes everyone in your industry for your competitor’s failings.
  5. Corporate malfeasance/ government investigations – Prepare yourself for scorched earth. Many people will do anything to protect themselves and the things they value. Plea deals are just one example. You could also find that the good friends and government officials you helped elect have become your most vocal critics as they scramble to distance themselves from your growing scandal.
  6. Expropriations/ abrogation of contracts/ sanctions – Your ironclad contract that was carefully written and negotiated by some of the most brilliant legal minds in the world is enormously important until a sovereign government decides it is in their best interest not to comply. Oh sure, you can take it to international arbitration and enlist support from your government to pressure them, but don’t let yourself be fooled into thinking the other interested parties will see your position as their primary interest. In the game of international chess, even the biggest, most powerful companies can become pawns.
  7. Executive misconduct/sexual assault – Have you ever had someone you deeply trust and admire lie to you or even shift blame for their guilt onto you or another colleague? It is a horrible experience that shakes the very core of your beliefs and often lessens your ability to think clearly and respond appropriately. Just having to navigate through what and who is right is enormously challenging. Imagine how the complexity is magnified when one of the parties shifts the blame to you and the company for your actions or lack of action. Would it affect your judgment, if that person was likely the victim?
  8. Cyber-attacks/digital assaults – You learn that one of your trusted employees or vendors enabled a serious data breach. Was it an error or deliberate? Have you corrected every impact? Who and what was affected? How do you notify your stakeholders and what assistance do you offer? Consider what you would do if one of your predecessors authorized the payment of the Uber ransom.
  9. Mass shootings/ terrorism/ acts of war – Your company, employees, and customers are the victims of senseless violence and you’ve done everything within reason to prevent this, but some hold you responsible because you didn’t do enough. Hotels that were expected to prioritize guest comfort and privacy may now be expected to deliberately observe the behavior and actions of someone checking in a hotel. Previously accepted protocols with choke points to ensure screening and access control may now present opportunities to target terror and expose companies to new liabilities.
  10. Targeted reputational attacks – An activist group aggressively opposes one of your major operations and extensive research reveals that the funding allowing this expanded activity indirectly came from a foreign government intent on destabilizing our society. You’re both the target and collateral damage.  You’re doing business in that country and are reluctant to lose it. You also know that foreign interference has become so politicized that by revealing this information you risk more damage from the reactions of skeptics who won’t believe you.

overcoming transformational crisis issues

Sadly, this list only scratches the surface of the surprises you may encounter when you manage transformational crisis issues. We hope it will at least jump-start your thinking about necessary preparations before you encounter a transformational crisis. Your best bet is to identify sources and experts who have already dealt with many transformational crisis issues. Here we’re talking about professionals who have weathered the headline-grabbing, major issues that can ruin companies and reputations, as well as change entire industries. While they may not have handled every detail of a first-of-its-kind crisis perfectly, they learned a great deal about what works and doesn’t work in these extreme situations.

Managing transformational crisis issues is never easy and many fail, but if you line up the proper expert advisers and prepare to the best of your ability, you will get more right than wrong, impress your stakeholders with your resilience and ultimately succeed. Initially, managing the risk of a transformational crisis may still keep you up at night, but eventually, it will lead you to the constructive preparations that allow you to control the nightmares.

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Phone: +1.833.227.4747

Email: info@corporatecrisisgroup.com

Address: 405 Main Street, Suite 730
Houston, Texas 77002