Successfully handling a crisis

Posted by Oliver Hogue on 22/02/2013

There’s an old saying in crisis management that it’s a case of ‘when’ and not ‘if’ a situation will occur that brings the media to your door. And while the nature of the issue can vary greatly between organisations and industries, how you address and respond to that issue can have a dramatic impact on your industry, organisation and career.

What if a building fire means residents are homeless for months, the body corporate manager is charged with criminal offences, or someone is seriously injured while working on the common property of a scheme? However unlikely these scenarios maybe they are all real examples, and the situations placed significant pressures on the committees, owners and third parties involved.

Tony Jacques of Issue Outcomes has spent more than thirty years in crisis management and says that problems often arise because people assume risk management is about financial risk.

“Of course financial risk and things like insurance are important, but proper risk management is much more than that – it’s also about your brand and your reputation, which at a time of crisis, can have a massive impact on your future if poorly managed,” Tony said.

“A study of high profile Australian corporate crises showed that 25% of the organisations involved didn’t survive the event. That’s one in four companies,” he said.

The most common mistakes that corporations make, according to Tony, are in thinking that a crisis won’t happen to them, that they can cope with whatever is thrown at them, or that every crisis is different and you can’t therefore prepare.

“These are just excuses for not doing anything. The way you respond in a crisis is obviously important, but corporations must assess what systems and processes they have in place to help prevent issues,” Tony said.

“A simple analogy would be that people get home insurance to cover themselves in the event of a fire or burglary – this, in a way, is your crisis response. However, it’s what you do to try and prevent a crisis that is important, which in this example could be things like smoke and burglar alarms,” he said.

“A key aspect of effective crisis management is to recognise and respond to warning signs, which precede just about every crisis or issue. When a crisis occurs, we hunt for people to blame and someone will always say ‘I knew about that’.”

Tony highlighted the report findings of the 2010 Pike River coal mine disaster in New Zealand, where 29 people died in a gas explosion.

“The investigation discovered repeated warnings of a potential catastrophe, with methane gas reaching explosive levels numerous times in the weeks before the fatal explosion,” he said.

“The Sago coal mine collapse in America also received worldwide attention when news spread that 12 trapped men were still alive. It was later revealed that the mine had received over 200 safety citations and more than a third of these were significant.”

Not every crisis has such awful consequences, but issues management is just as relevant for a small owners corporation as it is for a multinational mining company.

“The mining disasters are a brutal reminder that crisis preparedness is about identifying potential risks and taking practical action to reduce the chance of an issue becoming a crisis. This rule applies to all types and sizes of organisation,” Tony said.

“When crisis occurs for someone else, the common response is to think, ‘thank goodness that’s not us’. But what we should be thinking is, what would we have done and how prepared are we. It’s important to learn from similar situations and other people’s mistakes,” he said.

“Even a small organisation should examine the processes they have in place for monitoring and identifying risks, and they don’t need to be based on complicated diagrams or expensive budgets.”

What’s clear is that the good organisations maintain an active role in their industry and have a genuine desire to enhance their risk awareness.

“Increasing your understanding of potential risks could be a simple as searching for relevant news stories, regularly attending conferences and staying in touch with industry regulators and watchdogs. The more you talk to industry bodies and to your stakeholders, the more chance you have of discovering an issue before it’s too late,” Tony said.

No amount of preparation can, of course, protect you from every single scenario. So if a crisis does occur, what should you do?

“Corporations need to respond quickly and with a consistent message. The spokesperson needs to be a clear speaker and relevant to the situation at hand. There must be rules in place about what can and can’t be discussed,” Tony said.

“It’s also vital that a corporation outlines what they are going to address the issues of this crisis and they ensure things don’t happen again.”



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