Don’t worry! We have a great emergency response team. They follow all the best practices and train annually. They can handle any emergency response.” That’s a great start for any company. Certainly, it will serve you well in an operational emergency. Also, they can apply many of their skills in other areas. However, this doesn’t address the different perspective needed for corporate concerns and crisis issues. To illustrate this, you’ll see major crisis issues to watch later in this post.
Emergency Response vs. Crisis Management
Many companies plan and practice only emergency response procedures because they are more comfortable with the structured approach and focus on operating issues. They also like that the federal government has complementary emergency response protocols. Of course, emergency responders are very important in most operating circumstances. However, corporate crisis situations require perspectives that go beyond emergency response.
What’s missing is the host of corporate concerns that are also covered in the broader field of crisis management. If you have an existing emergency response program and need a crisis management capability, the simple solution is to build an overlaying crisis management team and supporting crisis management plan at the corporate level. This will ensure that neither team or approach confuses the focus of the other.
Likewise, crisis management teams support emergency response teams and other tactical groups while providing direction and voice for the entire enterprise. In this hierarchical structure, the crisis management organization encompasses all the resiliency efforts such as emergency response, business continuity, and security.
Conversely, don’t expect emergency response teams to handle crisis issues. Corporate concerns can simply be too complex for the structure of emergency response plans and compartmentalized teams.
Hopefully, your company already has a crisis management plan and practices it. If not, act now, since the middle of a crisis is usually too late to plan and practice your team’s roles and responsibilities.
10 Crisis Issues
Crisis management can work hand-in-glove with your emergency management team and plan while addressing other enormously important issues. Here are 10 major crisis issues that warrant real thought, preparation and integrated crisis management:
This can happen to any company. Consider two companies that had been among the 10 largest in the United States. Texaco declared bankruptcy so it could appeal an unexpected $13 billion judgment for tortious interference. Enron went from perennially most innovative company and darling of Wall Street to a global pariah in a matter of weeks. The plans, strategies, and leadership at Texaco ensured the company survived for many years after the bankruptcy. Enron did not enjoy a similar fate. Initially, there was too much executive focus on personal survival and shocked denial to stem the massive capital collapse. These situations resulted from several of the next examples.
This was the proximate cause of the Texaco bankruptcy and virtually ubiquitous around the Enron collapse. Litigation is often the cause of an unanticipated crisis. Unfortunately, you may appear to be in complete control, until you aren’t. Litigation requires extraordinary attention to any communication and coordination with legal representation. Often, communication with stakeholders helps with litigation, such as through amicus curiae
Hostile takeovers/activist investors
Activist investors are increasingly confronting companies and threatening change-of-control. For instance, when Texaco was weakened by its bankruptcy, Carl Icahn initiated a takeover. The crisis response included passage of the Delaware corporate consolidations bill that slowed more aggressive tactics. This gave the company time to restructure and successfully respond.
Third party incidents
One company’s emergency may become a crisis for other companies in its industry. An oil spill in Alaska resulted in stringent shipping requirements on the entire petroleum industry and a passenger train collision in California resulted in multi-billion-dollar positive train control requirements on freight railroads. Public opinion and crisis issues can drive punitive legislative responses.
Corporate malfeasance/ government investigations
If an employee bribes a foreign official, the CEO may go to jail under the Foreign Corrupt Practices Act. In another case, the government may prosecute your company if you falsify billing. Both will seriously damage reputations.
Expropriations/ abrogation of contracts/ sanctions
You may be doing everything right, but a sovereign government can act for its own reasons. It may want your assets, refuse to pay for services under its contract or put you in the middle of an international dispute. These actions can shake markets’ confidence and require massive crisis communication, diplomatic and legal campaigns.
Executive misconduct/sexual assault
Even powerful executives have flaws and they are not always obvious to those who work with them. The preventive programs you put in place and the way you respond can make all the difference. Observers will attribute their actions to your company, whether that’s right or wrong. Carefully managed, it won’t be as bad.
Denial of service, cybersecurity breaches, and other digital attacks have become common. Be sure to handle each case appropriately for its unique circumstances. Federal law actually changed after more than 100 million personal records were hacked at a consumer credit reporting agency. If you want to avoid scandal, be sure to consider and address public interest as a part of each case.
Mass shootings/ terrorism/ acts of war
Nothing is immune to violence. Churches and schools are targets, and new industries are having to scramble to adapt and prepare. Remember when few could imagine someone checking in a hotel, firing hundreds of rounds and killing scores of innocents. The thought, planning, and training to prepare for the unthinkable is now a necessary part of the business.
Targeted reputational attacks
It’s not just politicians and governments that find themselves under attack. Similar methods and sensationalism can be used to persuade communities that a company has violated their trust when that’s not the case.
Companies are vulnerable to many of these crisis issues. Waiting for them to happen is too late. Take actions now! Crisis Management and Crisis Communications require capabilities, critical thinking skills, and innovative approaches. With strong planning, preparation and skill you can overcome these issues.