Crisis Management has to Tackle Varied Disasters
Technology Dependence and Increasing Activism Poses New Dangers
Sep 28, 2009
Technology can let organizations down without warning as when a system crash wipes out business critical data with no way to reconstruct it. As a result, the company might lose all its receivables and find itself unable to defend excessive monetary claims from creditors, for example. Or activists of some cause or other can cripple the company's operations with a blockade.
Crisis can Occur at Numerous Fronts
The different crises that organizations face have been classified by Lerbinger (1) under the following categories:
- Natural disasters such as earthquakes, tornadoes, floods and drought
- Technological disasters such as software failures, industrial accidents and oil spills
- Confrontations that can involve boycott of the business' products, blockade of its premises and other forms of activism
- Malevolence involving such as actions as product tampering, kidnapping, malicious rumors and espionage intended to cause loss to the company
- Crises of skewed management value as when a business focuses exclusively on the interests of stockholders ignoring the interests of other stakeholders such as customers, employees, and the community
- Crises of deception as when management conceals or misrepresents information about itself and its products in its dealing with consumers and others
- Crises of management misconduct involving not only skewed values and deception but also deliberate amoral and illegal actions
In today's scenario, organizations face serious threats from their heavy dependence on technology and also from the power of communication to spread information, which might be true or false, about the organization with unprecedented speed and reach.
Nature of Crises
The essence of a crisis is that it poses a serious threat to the organization, is typically a surprise occurrence and allows little time to respond to it.
Crises are different from risks in that they would have already happened and need immediate response. Risks are events that might happen and are typically evaluated in advance and prepared for. Crises are different from emergencies in that the latter do not have so great an impact on the organization, being typically incidents with short-term impact.
Business continuity management is a related topic that includes crisis management planning, and recovering from the crisis to continue the business operations.
Managing Crises
Effective crisis management involves advance preparation against all serious vulnerabilities. A vulnerability audit is conducted, starting with gathering information from different levels of employees through interviews.
Employees working on the ground are likely to be better aware of potential harmful trends but might not be forthcoming and express them freely. Successful information gathering will identify any such trends by adopting effective interview techniques, including probing further any non-verbal cues detected during the interviews.
The audit will also probe organizational issues and weaknesses that can precipitate crises in the longer term. Experienced outside consultants might be better able to identify these.
The final audit report will list possible crisis scenarios.
Brainstorming and planning sessions will follow with a view to develop response plans for different kinds of crises. Each type of crisis can require very different responses. Manuals will then be prepared providing guidance on how to respond to different occurrences. In particular, the manual will deal with the communication response, outlining individual responsibilities if a crisis does occur.
An effective vulnerability audit can help:
- Reduce the likelihood of crises that are within the organization's control from occurring, by remedying detected operational and communication weaknesses
- Enhance the speed and effectiveness of responses to any crises that do occur by being prepared in advance
- Minimize the costs of the crisis, again through advance planning of the detailed responses
Where a crisis occurs that could not be planned against despite all the above steps, crisis management will involve:
- Identifying the nature of the crisis in all its ramifications
- Identifying the specific interventions needed to minimize the damage and recover from the crisis
In today's environment, a major element of disaster response involves public relations to let the public know what is happening and what actions are being taken to minimize the impact of the crisis not only on the organization but also on other stakeholders. With the fast dissemination of information possible now, the way an organization responds to crises can influence its reputation and credibility in a big way.
Crisis management involves identifying the disaster scenarios that can occur. This identification is done by carrying out vulnerability audits. Based on the reports from such an audit, appropriate responses are planned for each type of crisis. A major element of crisis response these days involves effective public relations.
(1)Lerbinger, O. (1997). The crisis manager: Facing risk and responsibility. Erlbaum
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