News

The violent events we have recently witnessed serve as a reminder that all our contacts need to know how to minimize harm in the unlikely event they are around violent situations involving weapons. In the hope that it will save others from harm, we are sharing a two minute segment from one of our security training programs on the standard protocol for dealing with violent circumstances. Please share it with your friends and colleagues.

Change of Control – Losing Everyone; Keeping Everything

Change of Control – Losing Everyone; Keeping Everything

How companies manage a change of control can make an enormous difference in the value and viability of the operations being acquired, merged or reorganized. It’s natural that companies will want to reduce costs and redeploy resources when they make the decision to dispose of assets or operations. After all, these are no longer considered core assets, so why continue dedicating corporate resources to protecting them as if they were still core.

Of course, companies will be sure to fulfill contractual obligations and protect the integrity of the operation until the change of control, but they will often reduce or eliminate areas that are considered nonessential. Those numbers vary depending on the reason for the personnel reduction with some departments being impacted more than others.

In some instances, entire Health, Safety, Security, Environmental, and Communications departments have been dissolved leaving no one assigned to what were once considered critical roles.  Emergency response capacity, security integrity, EHS, community relations, government affairs and related fields can be heavily impacted.  This type of significant paradigm shift can result in heavy losses of intellectual, operational and procedural capital.

Business Negotiations change of control

Change of Control Negotiations

As an example, a European energy company (strategically motivated) with businesses and assets dispersed globally, sold one of its overseas divisions to an Asian company (financially motivated) whose intent was to restructure and repackage the assets for a future sale.  In the process, the entire division management staff was reduced from over 100 professionals to 4.

The positions remaining were solely for optimizing cost, efficiency and preparing the assets for future new ownership.  The buyer would either merge the assets into an existing portfolio with established central controls and authority or build a new management team to operate their new assets.

This isn’t an unusual story and it happens frequently.  What doesn’t happen frequently is a good plan to retain the wisdom, experience and intellectual capital from past employees for use after the transition.  Assets have a valuable operational history and culture both independently and in the context of a larger organization.  This is especially true if the parent company, owner or operator is from one social culture and the assets are located within others.

Beyond social cultures are the asset group cultures, asset individual cultures, and the adaptive culture of being from one type culture and working under the operational rules of another.  These cultural understandings facilitate processes, procedures and community relationships that have immense value regardless of changing management structures, ownership or evolving business values.

In the European company example listed above, there was a cumulative loss of over two thousand years of experience.  Within one month of the sale announcement, many of the remaining employees were “checked out” and preoccupied with their employment prospects rather than putting the company in shape to make the transition successful.  This isn’t an unexpected behavior.  What was unexpected was that the buyers didn’t anticipate this reaction and left itself very vulnerable during and after the transition.

Since emergency response, crisis communications, security integrity and crisis management are designed to protect against infrequent threats, they are often the first to go during a change of control. They are also difficult to quickly replicate and essential to ensuring the continued viability of a business. A poorly handled crisis can taint assets for years, dramatically reducing their value. In this example, the buyer plans to restructure and repackage the assets for sale would have been undermined if it had encountered a crisis without support after the change of control.

This is all avoidable with some planning prior to the signing of the purchase agreement and announcement of the sale.  The planning should begin during buyer qualification and finalize during the transaction structure.  By the time the deal is done, the plan should be well underway.

When the transition phase begins, missing internal capabilities are outsourced on an on-demand basis consistent with established protocols ensuring continuity and consistency until new capabilities are put in place by the buyer after the change of control.  In most cases, the services you typically require can be temporarily outsourced to reliable, professional firms that will be engaged for the duration. In this way both the buyer and seller protect their interests, retaining interim capacity without the obligations associated with dedicated personnel.

A little forethought and planning before rushing to cut can protect everyone’s interests and ensure a successful transaction.

Boomerang Crisis – Amtrak is Snake bit

Boomerang Crisis – Amtrak is Snake bit

Amtrak is caught up in a Boomerang Crisis! Sunday morning we started the day with reports of at least two people killed in an Amtrak collision in South Carolina. This follows the fatal wreck involving many Members of Congress in rural Virginia on Wednesday and the fatal derailment on the maiden journey of an Amtrak train in Washington. What is going on and how do they solve it? As my father would say, they just seem to be snake bit.

Late night business phone call with mobile, tired and exhausted businessman having conversation with his superior

A Boomerang Crisis is one that comes back at you just when you thought you had been able to toss it aside. You do everything you can to deal with your current crisis responsibly, only to have a Boomerang Crisis of an unrelated incident that compounds the damage to your reputation. When this happens more than once, you’re in serious trouble, much like the US Navy’s deadly collisions in the Pacific.

When you look at it dispassionately, you can see how each of the Amtrak tragedies may have occurred, but we won’t know the reasons for sure until the NTSB issues their reports. That of course, is part of the problem for Amtrak. Since the NTSB controls the investigation and much of the response, Amtrak is limited in what they can say and do.

Of course, it could be worse. The Intelligence Committee report on the FBI distracted from the Congressional train incident and Super Bowl provides a distraction from South Carolina. However, when you have three incidents in quick succession, you’re just waiting for the next mishap to compound the problem.

It all springs from the Washington high-speed Amtrak derailment. It might have been completely different if Amtrak had insisted on Positive Train Control being operational before they would operate on the new line or they had required the engineer to take multiple practice runs before carrying passengers on the new route at high-speed.

While you can be certain that there will be Congressional scrutiny of the Virginia Congressional train wreck, it might have been excused as a tragic accident of a garbage truck being where it shouldn’t be if it didn’t follow the fatal derailment. Now we have another collision, which is with a freight train this time. Regardless of the cause, many now prematurely assume this is just another horrible example of Amtrak’s ineptitude.

Whether or not they deserve it, they have been tainted. It’s sad for all the fine people who give so much of themselves to safely operate our Nation’s passenger rail system every day. Unfortunately, it wasn’t enough and bigger changes will be required.

Many of those changes will be through focused attention and dedication day in and day out. Last year the short line and regional railroads used this approach to achieve a full year without a fatality, which is remarkable when you compare it to their more than 10,000 annual fatalities a century ago.

Some of the changes will also need to be symbolic to ensure that employees, passengers and the public know that Amtrak is serious about correcting this issue. It might be a system-wide stand down to focus on safety, along with the institution on major new programs.

While some might want to wait for the NTSB reports and the development of new programs, the perception won’t wait. There’s plenty that can be done to communicate an absolute focus on safety first from the top of the organization throughout every level.

It may be fortuitous that Amtrak’s new CEO, Richard Anderson, comes from the airline industry. The airlines clearly understand the value of preventing accidents, rather than just reducing them. His fresh perspective may even be enough to get Amtrak out of this Boomerang Crisis. The key is to take decisive, well-communicated action to address the festering neglect and declare to the world that good enough is no longer good enough.

Sensationalize Sensationalism

Sensationalize Sensationalism

Sensationalism rules the day! Our world is increasingly driven by the need to sensationalize. We are bombarded by a host of digital stimuli that are perpetually activating the fight or flight response in the hypothalamus. We even appear to be getting less responsive to each event; quickly turning to the next stimulus.

To fill this attention gap and attract audiences, the media seem compelled to sensationalize everything to make things seem proportionally larger and more provocative. Larger or more interesting events get scaled up to ridiculous proportions, with a host of situations getting over dramatized and overblown.

All of this is compounded by the enormous number of false or misleading stories that are posted on social media channels. The difficulties in controlling or even verifying this false information are well documented. Much of this comes from people wanting to make a quick buck or press their point of view through even more sensationalism.

Perhaps more worrisome, much of this may be coming from foreign interests attempting to destabilize our society and economy. There is even reason to believe that foreign sources have successfully generated artificial social media attacks on local business projects just to weaken the companies and our business interests.

sensationalism risks

Concept of sensationalism problem in business

It’s our fault; we pay for, engage in, and retweet or post those sensational stories regardless of whether they’re known to be factual.  It often seems that the simple notion that it has been printed or posted is sufficient legitimacy.   For whatever reasons, many of us seem to be suffering from an ever-increasing need for different, new, provocative and sensational news.  The things that have already happened or only similar to what happened simply don’t satiate that appetite for sensationalism.

Now you may be thinking that this means you can get out of a bad situation by just keeping your head down and waiting for the next sensational story.  Don’t do that! Stories run in trends and you will be a proof point for the future stories, while subjecting your industry to even greater scrutiny and sensationalism.

Just look at Martin Shkreli  and how he helped ensure that the public is skeptical of the pharmaceutical industry. Or consider how Exxon was vilified for years after the Valdez incident  and Congress imposed punitive standards on the petroleum industry through the Oil Pollution Act of 1990. It took enormous effort and investment to improve the industry’s image.

On a more human level, look at Kevin Spacey,  who has largely kept quiet after a limited attempt to address his issue in the beginning. He continues to show up in stories about others’ bad actions and the entertainment industry’s responses to sexual assault and harassment.  Mark Wahlberg, on the other hand, took decisive action and should be able to avoid the taint of greed and insensitivity in the latest All the Money in the World scandal.

Similarly, Senator Al Franken after initially trying to manage his issues decided to aggressively address them and ultimately take strong action. Whether or not he needed to resign, he now seems to have the opportunity to make amends and rebuild his life. Sincere, meaningful communications can make all the difference in whether you have an opportunity to rebuild your credibility and reputation.

Of course, politicians and celebrities are different than businesses. Unanswered sensationalism can destroy businesses’ reputations, markets and even their viability. Despite their financial strength and enormous structural advantages, the expectations and vulnerabilities for a business can be greater. People are more willing to forgive or explain away the flaws of another person. An unresponsive, seemingly uncaring business might not get that chance.

Corporate Crisis Group Joins ASLRRA

Corporate Crisis Group Joins ASLRRA

Corporate Crisis Group (CCG) is proud to be a new associate member of ASLRRA, the American Short Line and Regional Railroad Association. The dedicated professionals who operate America’s more than 600 short line and regional railroads provide our economy with critical infrastructure and logistical support.

Through active involvement in ASLRRA, railroads are dedicated to improving the capabilities and services they provide to American businesses, farmers and consumers. CCG plans to join these railroads as an active participant in the Association. Last November, ASLRRA members celebrated a full year without a single railroad fatality, which demonstrates these railroads’ dedication to the safety of their employees and operations.

With deep experience in railroad communications and emergency management, the Corporate Crisis Group looks forward to supporting the interests of railroads throughout North America

Railway into the sunset

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Emergency Management, Crisis Management & You

Emergency Management, Crisis Management & You

The structured fields of emergency management, crisis management, and crisis communications have evolved over many decades.  Many people may be surprised to learn that modern incident management was really born in 1970 with FIRESCOPE (Firefighting Resources of Southern California Organized for Potential Emergencies). This led to NIIMS (National Interagency Incident Management System) and ICS (Incident Command System).

Emergency Management Planning and Disaster Response as Concept

These are operational crisis management and emergency management systems by other names.  They were originally designed for integrating government resources at the federal, state and local level and applying those resources in an efficient fashion regardless of their various management structures and geographic locations.

These systems have evolved significantly and have proven to be superior mechanisms for organizing resources to transform chaos into a manageable business.  They are now the globally accepted best practices.  Keep in mind, these are emergency management tools geared at physically resolving the problem and though they include a public affairs function, when we talk about crisis communications and brand management, we must have another unique discipline integrated into the equation.

Crisis Communications, brand protection and related messaging is not a standard emergency response or emergency management skillset and completely different than simply providing accurate information to the public.  Communicating the company position and relaying response specifics in a manner productive to both the public and the company is a highly specialized field, in which many claim expertise but have little to no experience.  Try asking your crisis communications and public relations experts to provide evidence that they’ve had any actual role in a response for which they want to teach you how to handle or want you to trust to them.  Ask if you’ll get the experts or the interns when you really need their assistance.

It’s time to wake up.  Just scan the headlines of any news organization and you’ll see that bad things happen to good people and organizations all the time.  The news is ripe with corporate crisis, executive misconduct, and disaster.  Ignoring the risk of a crisis is equivalent to all-in betting with stockholder money.  Many crisis events have impacted hundreds of thousands of people in the process, forced CEOs and other officers to resign and generated massive public contempt for the business. We’ve seen exceptionally high-risk, high-value companies shortcut security, safety, preparedness and risk the entire brand to save a ridiculously insignificant amount of time and money.

Regardless of the crisis, having the right departments and personnel responding to the event and the right people communicating your position are critical requirements.  If you choose an unpracticed, unplanned or impromptu approach, it’s likely that you will fail spectacularly.

Building a world-class crisis management team can be straightforward, achievable and take a relatively small amount of time with senior management driven objectives.  While you may never have on-hand all the resources you need for any situation, for most companies, a basic Integrated Crisis Management Team capable of professionally addressing events can be achieved with existing personnel, an insignificant amount of money, and very little time investment.   As with sports, the right team members, training and practice are the game-winning solutions.

For 17 years we’ve helped clients progress from basic emergency management to become masters of Operational Crisis Management and Crisis Communications.  We help them to organize, plan, train and physically respond to crisis events and supported their mastery of communicating their actions to the public, stockholders and other stakeholders. We’ve seen the dedication of employees to their business and their colleague, and we’ve witnessed them become more effective and resilient organizations. People are the solution to the problems.

If you have a crisis management team and haven’t met in six months or practiced as a team in the last year, you’re not meeting the most basic level of proficiency and you’re not ready.  Personnel changes at all levels, knowledge attrition, geopolitical issues, business goals, new product lines, family matters, and a host of other distractions in a constantly evolving environment all detract from maintaining a current situational awareness and preparedness capability for your company.

Whether you handle it yourself or you get help, you need to anticipate, plan, prepare and practice. Crises define people and institutions. Let your next crisis show you at your best in the way you respond, communicate and relate.

Harassment – The Expanding Crisis

Harassment – The Expanding Crisis

The dreaded call is on your voicemail. A reporter is calling about accusations of sexual harassment and a hostile work environment. You have half an hour to respond, but they’re running the story with or without you. What are you thinking? Are you racking your brain trying to figure out what it is about? Are you wondering who it’s about? Are you trying to figure out how to explain? What will you do? You need crisis communications help.

Who’s the victim and who’s the accused?  Is it true? How do I know?  Is it your college buddy down the hall? Please don’t let it be your star performer who is turning around your business!  Should you have known?  How many have been harmed?  Could it be systemic?

Your public offering is next week. Are you wondering whether this will be a problem and if you can contain it? Is this material? Should it be disclosed? Are you limited in what you can say?

What do you do now? Of course, you should do the right thing. But, what is the right thing? How do you decide?

Let’s say you conclude that someone did something awful and you have to act. How do you do that in a way that’s decisive, compassionate and protects innocent stakeholders and your company?

Should you have tried harder to anticipate this risk? Should you have searched for potential problems and acted before they woke you in the middle of the night? Should you have strengthened your communication and training about corporate values and policies against harassment? How could you do all this respectfully while balancing other priorities without disrupting your operations?

Once you know, you must do something, but what if you’re not ready? Failure to act is also an action. Whatever you do, you need to think it through. But, what if the reporter has already called? You need crisis management help.

Think about it and develop a plan now, before it’s too late!

Dreaded late night call, tired and exhausted businessman having conversation with reporter

Uber Coverup or Crisis Averted?

Uber Coverup or Crisis Averted?

If you missed the news last week or already forgot about the Uber hacking and coverup, then the timing of the announcement worked. Ironically, the sheer volume and intensity of sexual assault news in combination with the many distractions of Thanksgiving week had the result you would expect; Uber was relegated to a secondary story.

It will be interesting to see if that changes once state and local prosecutors have time to consider the implications of a company paying blackmail to better cover up the hacking of more than 50 million people’s records. In fairness to the new Uber CEO, the October 2016 hacking, payment to the hackers in exchange for a promise to delete the records and failure to disclose all occurred before he arrived. However, we shouldn’t give the current Uber team too much credit.

There were probably legal requirements that prompted the disclosure last week. Furthermore, waiting until the public is highly distracted during a holiday week doesn’t necessarily demonstrate the good faith effort that improves Uber’s already tarnished reputation. What it does demonstrate is that most efforts to cover up and deceive ultimately come back to bite you.

If you are in a crisis and your first reaction is to hide the problem, then you are about to go down the slippery path of layering one coverup upon another until you can no longer manage ethically or in the best interests of your stakeholders. In fact, that’s usually when you go beyond a news story and attract the interest of the SEC, FBI and other law enforcement officials.

The coverup is often worse than the crime, and that’s why transparency can be so very important in gaining the respect and support of your stakeholders. Don’t let yourself fall into the coverup trap. My grandmother would have said that’s just opening the door to the devil.

Awake at Night? The Crisis You Didn’t Expect?

Awake at Night? The Crisis You Didn’t Expect?

One of my professors and closest mentors was also a distinguished full bird Colonel. He’s the real deal; the stuff from which myths and legends are fabricated.  He was a fighter pilot, held a principal role in orchestrating the Saigon evacuation, and ultimately commanded several air wings.  I’ve never known anyone with better ethics, professionalism or compassion.

After his retirement from the US Air Force, he taught Leadership, Emergency Management and related studies at my university.  I will never forget his wise counsel:

The toughest, most demanding and frustrating part of your career will not be managing emergencies, but rather convincing others to address risks before they become reality.

His observation, long before integrated crisis management was practiced, has proven to be one of the universal truths. It points to the challenges in motivating people to dedicate time and resources to something that may never happen. It also doesn’t provide a concrete return, but the consequences could include the loss of billions of dollars along with hard-earned reputations and brands. Numerous times, we’ve seen scenarios play out for which a half day of practice with the right mix of personnel would have saved tens of millions of dollars or countless lives.  Once the train leaves the station, it’s of no value knowing you should have arrived ten minutes earlier.  The next train may be too late and going the distance in a taxi costs 10 times as much.

It’s much like insurance. Only it’s not a financial instrument and your business can be ruined if you don’t get it right. It’s about your operations, your security, your reputation and the viability of your business. It’s about the things you can’t afford to lose and the reasonable steps you should take to protect them.

Security, Public Affairs/Corporate Communications and Health, Safety and Environmental departments tend to be the proponents of preparedness, but with limited time and resources, Crisis or Disaster preparation can be relegated to a lower priority than other, more pressing matters. While the risks are generally well known, other routine matters and current issues tend to get all the attention, while crisis planning or training is relegated to slow or convenient.

That’s why it’s so important for leadership and senior management to set the tone and priority for their business. If they understand that crisis risks need to be mitigated, then they can provide the direction and emphasis for real progress that translates into observable organizational capability.

In Crisis Management We All Play a Role

In Crisis Management We All Play a Role

A Simple Solution to Addressing Risks Before They Become Catastrophes

What do you think large corporations and companies have learned from 30+-year-old crisis events like Union Carbide’s Bhopal accident, Johnson & Johnson’s Tylenol product tampering, or the Exxon Valdez spill?  If you think that’s too old to be relevant, what about just in the past 20 years with the Enron collapse, the cyber-attack on Sony, the BP spill in the Gulf of Mexico, or the Wells Fargo and new accounts crisis?  Perhaps you just consider the more recent crisis issues like United Airlines passenger removal incident, Unilever’s Dove brand soap commercial or the mass shooting at the Mandalay Bay hotel in Las Vegas?  Would it change your preparations if you had a business in Puerto Rico prior to Hurricane Maria or in Houston prior to Hurricane Harvey?

We like to think we’ve learned from these crises and prepared to the best of our ability for future events.  However, institutions tend to have short memories due to a constantly changing workforce and many other pressing priorities.

It’s easy to see things once they happen to others and make some conclusions about what could happen to you, but do you act on that knowledge in the best interest of your company?  Most people with direct responsibility for mitigation, preparedness and response in companies are both aware of the risks and try to proactively address them.  Sometimes it’s with simple awareness briefs, a new policy or procedure, a crisis management exercise, or even a much larger infrastructure project to help insulate against risks with high consequences.

Those with direct professional responsibility for managing risks are already routinely asking those questions and acting upon the answers.  But, if you want your company, colleagues and stakeholders to be truly secure, it’s not enough to just leave it to the professionals. These questions are most effective when they are directed at everyone from the CEO to the lowest paid position or volunteer.

The major crises we listed are scattered across many industries, but the responses all involved numerous departments, resources and herculean efforts to manage.  Every discipline can contribute to successfully managing a crisis event, yet they are often unaware of that opportunity. This is why it is so important to thoroughly plan and train in advance of a crisis before these opportunities are lost in the heat of the moment.

Throughout time and industry, big events require all departments and their resources in an integrated approach. Likewise, it is statistically likely that an organization will encounter one or more disasters in the future.  Since a crisis is a defining moment for an organization, doesn’t it make sense to prepare so you will succeed, rather than bet your company on an impulsive response? Get the right people in your organization involved, train them, and practice responding to events you know could happen.  We’ve seen it time and time again; this is worth the effort.

Surviving Violence and Reducing Risk

The violent events we have recently witnessed serve as a reminder that everyone needs to know how to minimize harm if they encounter weapons violence. In the hope that it will help others, we are sharing a two-minute segment from one of our security training programs on the standard protocol for dealing with violent situations. Please share the link to our program with your friends and colleagues, courtesy of Corporate Crisis Group.

https://youtu.be/gkoABk6rsyg

Contact Us

Phone: +1.833.227.4747

Email: info@corporatecrisisgroup.com

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