Atlanta Human Resources Consulting and Executive Coaching Firm Articles by Corporate Performance Strategies

Could a corporate crisis put your business out of business, or cause a major financial setback? If it's not managed effectively, the answer is clearly "yes." We use the term crisis to include whistleblower, class-action lawsuit, shareholder lawsuit, sudden departure or death of a top executive or executive team, restatement of earnings, product recall, destruction of critical data through fire or natural disaster, death or accident of a customer on your premises, and other situations. A crisis is defined by crisis management guru Helio Fred Garcia as: A non-routine event, that risks undesired visibility, that in turn threatens reputational damage.

The statistical likelihood of a crisis hitting a company are in the 80 percentile and higher range, depending on the informational source, with some companies lumped into the "inevitable" category. Whatever your business, the chances are good you won't even see the crisis coming unless you take steps now to assess your vulnerabilities. Where are the soft spots, the areas most likely to generate a corporate, product or organizational crisis? Just how vulnerable are you? Recent examples of companies in crisis include Delta Air Lines, Coca-Cola and Mirant - all finding themselves in business-related crises.

The only way to answer those questions is to roll up your sleeves and start digging. Job One: Appoint action teams from top management to begin to conduct an exhaustive, company-wide vulnerability audit. Personally hold the teams accountable to provide solutions and action plans that will eliminate weaknesses and minimize the effects of a crisis.

Then, start building your crisis management plan. The crisis management plan is a blueprint for how you will react to, manage, survive and emerge from a corporate, organizational or product crisis. Numerous reliable authorities for crisis management can be found on the Web.

In the first step of your crisis plan, the vulnerability audit, where do the teams start? The areas of our operations in which vulnerability to a crisis are most severe are:

Human resources
Building and Plant
Business Practices
Here's a look at all three areas, complete with some suggestions and some questions for which the action teams had better find answers. It is a foregone conclusion that you will identify other questions and discover other areas of vulnerability within your organization, but these points provide you with a strong start.

Human Resources Team
This team will:

Have primary responsibility for ensuring strong media relations with journalists covering your industry or profession, on a local, state and national level. These relationships are essential in a crisis. Poor media relations or a lack of any at all will make the crisis more severe because your messages don't get out as clearly as they would have.
Develop a plan of action for the continuation of business in the event that the CEO and top executives are deceased together in an auto accident or plane crash.
Develop a succession plan in the event of an extended absence of the CEO because of illness or other factors.
Examine the strengths and weaknesses of your relationships with your key publics. How close are you to your media, vendors, suppliers, health inspectors, clients, elected officials, industry leaders, customers and other key stakeholders and influencers? Provide an ongoing action plan to strengthen areas of weakness. Relationships must be kept strong.
Develop a company policy requiring all staff with client/vendor responsibility to provide their contacts with all locator information and alternate contact information so the staff member can be accessible always.
If you are a public company, are you on good terms with the analysts covering your business?
Are your auditing procedures sufficient enough to uncover evidence of embezzlement or lapses in business ethics before they reach severe status? Do you have a code of corporate behavior/governance?
Is your board independent, and is it made up of outside directors?
Do you have multiple vendors or suppliers for unique components critical to the continuation of your key elements of business, or, do you rely primarily on one supplier or vendor. How is the financial health of your key suppliers and vendors; what about their labor relations?
Do your key executives experience media spokesperson training at least once annually?
What safeguards exist against product tampering, and are they tested regularly?
Other areas of vulnerability you can list?

Building and Plant Team
This team will:

Create an easily accessed roster of emergency response agencies, service providers and vendors to be available at the switchboard or manager's office; provide a plan for quarterly updates.
Identify areas of your operation that are likely targets of internal or external sabotage and provide a plan that outlines the actions needed to alleviate those threats.
Review current procedures for off site storage of server backup tapes and determine if this procedure sufficiently meets security needs. Can crucial work be lost in a server crash?
Develop an emergency exit procedure and schedule drills for fire, workplace violence, toxic substance release, and other building emergencies.
Would an extended power outage put you out of business?
When is the last time you conducted a fire hazard walk-through? Have you ever looked for overloaded electrical outlets in employee cubes, proximity of combustibles to heat sources, frayed wiring and aging break room appliances?
Develop a response plan for an onsite chemical leak or toxic spill.
List other areas of vulnerability you can think of.

Business Practices Team
This team will:

Have primary responsibility for ensuring strong media relations with journalists covering your industry or profession, on a local, state and national level. These relationships are essential in a crisis. Poor media relations or a lack of any at all will make the crisis more severe because your messages don't get out as clearly as they would have.
Develop a plan of action for the continuation of business in the event that the CEO and top executives are deceased together in an auto accident or plane crash.
Develop a succession plan in the event of an extended absence of the CEO because of illness or other factors.
Examine the strengths and weaknesses of your relationships with your key publics. How close are you to your media, vendors, suppliers, health inspectors, clients, elected officials, industry leaders, customers and other key stakeholders and influencers? Provide an ongoing action plan to strengthen areas of weakness. Relationships must be kept strong.
Develop a company policy requiring all staff with client/vendor responsibility to provide their contacts with all locator information and alternate contact information so the staff member can be accessible always.
If you are a public company, are you on good terms with the analysts covering your business?
Are your auditing procedures sufficient enough to uncover evidence of embezzlement or lapses in business ethics before they reach severe status? Do you have a code of corporate behavior/governance?
Is your board independent, and is it made up of outside directors?
Do you have multiple vendors or suppliers for unique components critical to the continuation of your key elements of business, or, do you rely primarily on one supplier or vendor. How is the financial health of your key suppliers and vendors; what about their labor relations?
Do your key executives experience media spokesperson training at least once annually?
What safeguards exist against product tampering, and are they tested regularly?
Other areas of vulnerability you can list?

Oversight and Development Team
Composed of CEO, VP for corporate communications, human resources, legal and a top manager from every operating unit, the Oversight and Development Team:

Merges the plans from the three action teams into one comprehensive crisis management plan; identifies other areas of high importance and requests action from the appropriate team.
Develops a crisis management and crisis communications plan, often in conjunction with outside counsel from experienced crisis managers.
Manages accountability and implementation timeline.
Ensures monthly updates of the crisis management plan.
Conducts regular drills to test plan effectiveness.

Implementation Timeline: 60 Days
Composed of CEO, VP for corporate communications, human resources, legal and a top manager from every operating unit, the Oversight and Development Team:

Week 1-4: Team meetings to discover vulnerabilities and provide solutions/answers/action items. Significant interaction with external consultants/experts.
Week 5: Group presentations to Oversight Team
Week 6: Oversight Team meets to review plans; suggests revisions
Week 7: Plans revised by action teams and external consultants/experts.
Week 9: Oversight team meets, reviews and adopts action team plans, creates final crisis management plan for agency.
Follow up and updates: Ongoing for the life of the plan.
Crisis drills and simulations held semi-annually.

Word of Caution
In closing, a word of caution is in order. CEOs who cannot plan to be 110 percent supportive of this process and take part in it fully risk wasting their time and the time of their key personnel because the process will fail without CEO support. Time after time, crisis management planning procedures have been launched with good intentions all around, only to be derailed by a lack of genuine support from the top. Don't start the process unless you intend to be fully involved throughout all phases, and then play a major role in managing the plan going forward.
As CEO, you should treat crisis management planning like any other critical company project on which the future of your enterprise rests, because, in truth, it does.

Dave Brookmire, President
Corporate Performance Strategies, Inc.
3340 Trails End Road
Roswell, GA 30075
Phone: 770-587-2265
dbrookmire@cpstrat.com
www.cpstrat.com

Effective Crisis Planning Can Keep You in Business