 A strong crisis management programme should be active and ongoing,
starting with a full risk assessment to identify weak spots in a
company’s operations and examine the potential risks to a business’
assets, including people, environment, facilities and reputation. These
areas of vulnerability should then be examined in terms of respective
business impact upon a company’s ability to carry out operations.
The assessment should not overlook the impact of external factors, such as regulatory effects or natural disasters. Risks must then be categorised according to impact and likelihood, to determine which areas require most immediate attention.
A globally recognised standard, such as the Australian Risk Management Standard (AS/NZ 4360), should be used in the risk assessment process. This standard has a strong focus on implementing a corporate culture of cyclical risk assessment, impact analysis, treatment, and evaluation in a contextual environment.
One way of kicking off the internal risk assessment process is a Risk Storm Workshop, whereby senior managers are invited to brainstorm the full range of risks to their individual business unit or support function. The idea is to try and draw them out of the operational risk focus and ask them to think of the broader range of risks they might face, including loss of proprietary information, internal fraud, reputation risks or political risks.
Addressing Vulnerabilities and Preparing a Response
Once the most vulnerable areas have been identified, the next stage involves addressing these weaknesses to help avoid or mitigate preventable problems, prioritised by likelihood and impact, and then preparing responses to potential threats. An effective crisis management strategy should address fundamental affects upon a business’ capacity to operate in terms of facilities, data, staff and suppliers – rather than specific types of incidents or scenarios – and how a business will operate in the absence of any, or all, components for potentially extended periods of time.
A well-organised and defined structure is crucial to a company’s ability to handle a crisis. A strong crisis management structure should include three basic response/management teams:
- Incident Management Team (or Emergency Response Team) at site level.
- Country Crisis Management Team (CMT) at country head office level.
- Corporate Crisis Management Team at global head office level.
Formation of these teams with specifically designated team members is important in ensuring that crisis handling can be carried out and is separated from day-to-day operations in order to minimise business disruptions. It is important to carefully select the team members, and not over-populate the team.
The ideal crisis management team should have six to eight members. The key members are the Ultimate Decision Maker who decides on the strategy and the Team Facilitator who implements the decisions during the course of the crisis. Other team members are drawn into the crisis team as required.
Forming a Plan
One of the common failings of Crisis Management Plans is that they are often too cumbersome and difficult for the layperson to understand. What is required is a simple core plan that identifies the members of the Team, how they will contact each other in the event of a crisis and, most importantly, what they will discuss during that first meeting of the CMT.
The Plan should also include detailed roles and responsibilities for each Team member, as members will require guidance on what they are expected to do. The core of the plan provides an overview of how to manage any particular crisis – the team needs to be able to work through the situation intuitively. Individual crises scenario plans (such as earthquake, typhoon, site accident, etc) can be included as appendices to the core plan.
Implementation and Training
Quite often, one of the key areas where crisis management planning fails is in the implementation and training of the plan and the Team. CMT members are not risk management or crisis experts – they have their own daily work duties to perform and rarely have time to review crisis management plans. That is why it is essential that CMT members receive regular training, not just on the theory and structure of their plan, but also on scenario exercise that they can use to help develop their skills in handling a range of possible issues.
When developing a suitable scenario, use the initial risk assessment as the basis. Identify the top five or 10 risks to the business and develop a scenario around one of those risks. For example, a food manufacturer might consider product safety as a key risk area. The scenario could involve a product contamination issue and how that might evolve in China. This quickly leads to identification of all the various stakeholders involved in the crisis and the CMT members begin to work through a full range of decisions they need to make. The scenario can be as simple or as complex as required, based upon the experience level of the CMT.
Crisis Management and preparedness is a vital part of business operations, but companies often make the mistake of placing the bulk of efforts in getting a plan together while leaving identification and training of teams as an afterthought. Awareness and effective training of teams before a crisis strikes is crucial to the effective management of a critical incident.
Companies can look among peers in any country to see that no business is immune to crises of any type at any time – and China is certainly no exception to this rule. The businesses that prepare their employees for these incidents will empower their staff to cope in times of crises, and also help ensure the continuity of their business under all circumstances.
Last update : Friday, 20 June 2008
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