Crisis Management Plans

The Y2000 bug scare earlier this year created a flurry of activity in both large and small businesses in the months and years preceding ‘the day’. It forced owners and managers to imagine a range of ‘what ifs’ in relation to their businesses’ computer-reliant systems. It lead them to check their systems and procedures, take corrective actions where needed and conduct test runs before ‘the day’. The collective sighs around New Zealand when the expected didn’t eventuate was both heartfelt and gusty.

It’s highly likely that by now, with the Y2000 threat well behind us, the underlying issue the threat highlighted has dropped out of individual and organisational consciousness. The issue is, of course, preparing for the unexpected as a matter of course and not just once in a millennium.

How about a show of hands for the following scenarios:

· has your business identified all the damaging events or situations that could befall it?

· does your organisation write policies and procedures for the sake of meeting either internal or external audit requirements but in practice, do it for the sake of doing it?

· does your business have a documented crisis management plan and procedures?

· does your business have a documented emergency or disaster plans that sit on a bookshelf and are never read, reviewed, trailed or used at all?

· has your business a crisis management team, ready to spring into gear to manage a crisis situation, separate from the day to day running of the business?

Okay, hands down. The point is this. It is important to plan for the unexpected. The development of a crisis management team and a crisis management plan are the tools to help you do this. A sense of proportion is important here – you don’t need elephantine-sized plans if you have a very small business. Similarly, if you are a large, complex organisation and you have minimal or no plans to assist you manage a crisis, then you are courting trouble. So what can you do?

Commit. This means having a real desire to prepare your business for the unexpected and a commitment to developing a plan and procedures.

Conduct ‘what if’ analysis. This means involving staff and others to identify all the events that can befall and damage the business. For example, what if fire destroyed the entire building? What if a flu epidemic swept through the organisation and half the workforce was lost for three weeks? What if the CEO and the General Manager were involved in a serious accident (resultant death or hospitalised for two months)? What if the products were sabotaged by a worker and an entire range had to be recalled ?

Establish a crisis management team. This means identifying staff who can come together at a moment’s notice, to manage a crisis situation. The team’s role is to deal only with the crisis, not the day-to-day running of the business.

Determine individual roles and responsibilities within the team. Identify ‘who-will-do-what’ in advance – for example, managing the media ( the spokesperson for the business, media contacts); managing internal communications (staff, suppliers, head office); liaising with outside agencies (insurance, police, real estate).

Develop appropriate strategies. This means matching all the ‘what ifs’ with appropriate strategies. For example, if half the building was damaged, where could the business be managed from; if the CEO and GM were unexpectedly unavailable for two months, who would step into their positions and the positions beneath; if product was sabotaged, what is the recall process, who needs to be informed, what are the implications for other products. Prepare draft media responses for a range of situations. Develop systems to support the strategies i.e. lists of staff and their contact details (next of kin, phone numbers); on-site and off-site backup storage of critical business information. Identify an office which could become a crisis control centre and identify the equipment it would need when operational. Develop procedures to manage each crisis situation. Ensure the procedures are living documents, not book ends or draft stoppers. Give copies to all team members.

Practise assembling. A bit like fire drills, it’s useful to practise assembling the team at a moment’s notice. A crisis management team needs a rapid response capability so that the first few hours of a crisis are not spent wondering who is in charge, who should be involved, what has happened, what needs to happen next and who should be doing what.

Annually review. It’s important that the team membership and the crisis management plan and procedures are reviewed annually. Not a passive look through the procedures, rather, a serious look at who is on the team, who is still available; what, if any, additional skills the team needs, what other threats or ‘what ifs’ need to be considered. Remember this formula: Good planning+skilled people=managed crisis.

Preparing for the unexpected makes good business sense. Can you afford not to?

First Published in NZ Business May 2001

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