Burson-Marsteller EMEA 2013 Crisis Survey


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Burson-Marsteller today released research showing that the threat of a crisis remains one of the top concerns keeping business decision-makers up at night. However, while three quarters of business decision makers believe a crisis plan would benefit their company, only 51% of companies have one.

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Burson-Marsteller EMEA 2013 Crisis Survey

  1. 1. 2013 Crisis Survey 1
  2. 2. Methodology   PSB conducted a total of 201 online interviews in Europe amongst businessdecision makers in October 2013 Business-decision makers are defined as respondents who: Region Sample size Margin of error France 40 +/-16 Germany 40 +/-16   Full time or self employed/business owner  Have an active interest in business and current affairs issues, Italy 40 +/-16  Have final or significant decision making power in their business. Spain 42 +/-16 United Kingdom  Aged over 25, 39 +/-16 Overall 201 +/-7 Overall, half of the respondents were from large enterprise businesses and half were from SME businesses
  4. 4. The threat of crisis remains a key concern Q64 As a business decision maker, what are the top three concerns that keep you up at night? Base: Overall (201)
  5. 5. A crisis is defined as a disruption to the business which puts the company’s future at risk Q17 What does ‘crisis’ mean to you in a business context? “An internal or external situation that starts to disrupt the life of the business” -France SME- “when you start to lose customers for whatever reason” -Germany SME- “A crisis creates opportunity for realignment and correction” -Germany SME“event or events which need to be tackled urgently with maximum resource, which have their potential to do serious harm to the business.” -UK SMEBase: Overall (201) “where the future of the business or part of it is at serious risk” -UK enterprise-
  6. 6. 41% of business leaders continue to experience crises Q39 Has your company experienced a crisis while you’ve been working there? 59 53 47 41 HAVE NOT EXPERIENCED A CRISIS Yes 2011 HAVE EXPERIENCED A CRISIS No 2013 Base: Overall 2013 (201),Overall 2011 (204), Overall 2009 (200) HAVE EXPERIENCED A CRISIS WITHIN THE LAST YEAR
  7. 7. Controversial company developments is STILL the most commonly encountered crisis… Q43 What sort of crisis did your company encounter? (Among those who experienced a crisis) 34 36 Controversial company developments (e.g. lay offs) 39 21 19 17 20 Logistical difficulties (e.g. problems with transport/delivery) Technical accidents (e.g. natural disaster or explosion) 8 10 18 Critical or negative new media campaigns (e.g. criticism over social media) “Lay-off of huge number of employees due to internal unrest within the organisation” -UK, Enterprise 11 Danger to product safety (e.g. defective or contaminated parts) 17 16 Online or digital security failure 13 15 17 “The Icelandic volcano stopping flights over Europe meant our customers were unable to travel – we also had customers stranded” -UK, Enterprise 15 Intense regulatory scrutiny of your company 12 12 Intense political scrutiny of your company 2013 6 Criminal actions (e.g. bomb attack or fire) 9 2011 4 2009 Base: Experienced a crisis (82) “Failure of computer security allowed third parties access to our database” -FR, Enterprise
  8. 8. …It is ALSO the crisis that companies most expect to experience within the next year Q30 How likely do you think it is that your company will experience each of the following in the next 6-12 months? 56% of Enterprise respondents think it is likely, in comparison to 34% of SMEs. 45 43 47% of Enterprise respondents think it is unlikely, in comparison to 32% of SMEs. 28 43 37 33 26 39 66 71 74 62 Intense regulatory scrutiny Technical accidents 55 56 57 61 Controversial company developments Logistical difficulties Online or digital security failure Critical or negative new media campaigns Likely Base: Overall (201) Unlikely Danger to Criminal actions product safety
  9. 9. Organisations TEND TO ANTICIPATE THE SAME KINDS OF CRISES THEY HAVE ALREADY EXPERIENCED Occurrence: High Concern: High Crisis encountered Occurrence: High Concern: Low Technical accidents (such as a natural disaster or explosion) Danger to product safety (i.e. defective parts or contaminated materials) Occurrence: Low Concern: Low Intense political scrutiny of your product or company Critical or negative new media campaigns (e.g. criticism over social media / online channels) Intense regulatory scrutiny of your product or company Occurrence: Low Concern: High Criminal actions (such as a bomb attack or fire) Controversial company developments (such as lay-offs or restructuring) Logistic difficulties (problems with transport or delivery) Online or digital security failure (E.g. personal information on customers lost, or company internal emails being stolen) Perceived likelihood of company experiencing each crisis Base: Overall (201)
  10. 10. Experiencing a crisis is EXPENSIVE Q151 Approximately, how much did the crisis cost your company? (Among those who have experienced a crisis) SMES SAY A CRISIS COST THEM BETWEEN €10,000- €49,999 ENTERPRISES SAY A CRISIS COST THEM BETWEEN €500,000- €999,999 THE AVERAGE COST OF A CRISIS TO A COMPANY Base: Among those that had experienced a crisis from DE, FR, IT and SP (72); overall SME (38); enterprise (34)
  12. 12. INTERNAL TEAMS remain primarily responsible for crisis planning Q101 How did your company develop its crisis management plan? 51 We have an internal team that created a crisis action plan 62 2013 33 We used both external and internal resources to develop a crisis action plan We employed an outside firm to create a crisis action plan for us 18 12 14 9% of SME in comparison to 15% Enterprise Base: Those with a crisis plan 2013 (102); those with a crisis plan 2011 (105) 2011
  13. 13. The proportion hiring an outside company to deal with a crisis has almost doubled since 2009 Q44 What did your company do at the time to manage the crisis? (among those that had experienced a crisis) 51 47 35 34 30 24 15 12 8 We handled the crisis internally either through the We have/had an in-house team especially dedicated We hired an outside company to help us manage Public Relations Department or Senior Management to dealing with crisis management the crisis 2009 2011 2013 Base: Experienced a crisis 2013 (82); Experienced a crisis 2011 (123) ; Experienced a crisis 2009 (106)
  14. 14. In the event of a crisis, INTERNAL ACTIVITIES are the focus Q112-131 Please place these steps in the order of the steps you have or would go through in a crisis situation Prepare an internal audit Establish a crisis team Organise a crisis check-list Receive training from your internal crisis team Monitor Issues Conduct a crisis workshop Receive training from your external crisis team Prepare Press Statements Evaluate crisis scenarios Publish and distribute a crisis manual Have an on-site crisis team Call your crisis hotline – run by an external company Train crisis team in media relations Engage with consumers/public Engage with local or national politicians Engage with online stakeholders Engage with digital communications / social media Engage with national regulators or public authorities Engage with European Parliamentarians Engage with NGOs Base: Overall (201) 47 43 42 42 38 31 30 29 28 25 25 23 20 18 13 12 11 8 6 5
  15. 15. Opinion is split on the best style of LEADERSHIP when managing a crisis Q133A Which of the following two styles of leadership do you believe to be most effective when managing a crisis? Q133B Thinking about the most effective attributes for a leading team or figure to have when directing a business out of a crisis, which of these are most important? (top 8) 48 43 Accountability 50 50 48 43 45 Decision-making 43 Clear vision 39 36 Strong interpersonal skills 38 33 36 41 Excellent communicators Ability to delegate and empower Command and control C-Suite Collaboration Non C-Suite 31 Setting direction 30 Ability to challenge status quo C-suite Base: Overall (201); C-Suite (107); non C-Suite (94) 37 39 26 27 Non C-suite
  17. 17. A third say it is MORE DIFFICULT TO PLAN for a crisis Q50 Do you think it is more or less difficult for companies like yours to plan for a crisis than it was 5 years ago? 32 43 More difficult 44 42 Less difficult 23 15 2011 About the same 2013
  18. 18. The pressure to RESPOND QUICKLY is an increasing difficulty in planning for a crisis Q52 Which, if any, of the below are reasons why you feel it is more difficult to plan for a crisis today? (Among those who feel it is more difficult to plan) 50 34 2011 35 33 31 24 30 2013 33 29 21 21 18 Need to respond extremely More globalized nature of Increased anti-corporate Increased public demand Overall challenges of digital Rise of citizen journalism / quickly communications sentiment in public and/or for transparency communications social media (e.g. media Facebook, Twitter) “Globalization, changes in environmental conditions, transparency, sustainability.” -Germany enterprise- “More channels to address, increase in stakeholder groups and groups of 'interested but biased' parties. Misinformation via the internet.” -UK enterprise- Base: Those that say it is more difficult to plan for a crisis 2013 (66); those that say it is more difficult to plan for a crisis 2011 (90)
  19. 19. Recent high profile scandals have increased concerns and PROMPTED THOUGHT AND PLANNING “There have been a number of high profile crises over the past 12 months including the horsemeat scandal, the fixing of Libor, and the US Government shutdown.” Q53 To what extent have these crises increased your own company’s concerns regarding potential crises? Q56 To what extent have these recent crises made your company think about its own crisis planning? 23 Increased Stayed about the same 69 Decreased 8 Base: Overall (201) SAY THAT RECENT CRISES HAVE MADE THEIR COMPANY THINK ABOUT ITS OWN CRISIS PLANNING
  20. 20. An increasing number of companies HAVE a digital crisis communications plan Q110 Does your current company have a digital crisis communications plan? Q111 How did you or your company develop its current digital crisis communications plan? 62 We have an internal team that created a crisis action plan 28 57 39 Yes 31 We used both external and internal resources to develop a crisis action plan 22 2013 No 57 52 2011 We employed an outside firm to create a crisis action plan for us 2013 Base: Overall (201); Overall 2011 (204) 2011 8 20
  21. 21. Companies still FEEL OVERWHELMED by online communication channels “A major factor in these crises was the online public debate over new media channels such as Facebook, Twitter and blogs.” Q54 What do you think are the biggest issues for companies in crisis like Tesco, Barclays, and the BBC when responding to the online public debate? 37 29 28 21 20 16 Slow response time Lack of dedicated team to respond to new media “They should have a team that monitors all new media for any potential crisis and responding quickly with damage control.” -UK SME- New media (including social media) channels flooded with negative commentary Treating old and new media types differently “The communication with the public has changed, but, many companies do not know how to handle it and use old communication methods .” -Italy SME- Base: Overall (201) Being undermined by employees Not seeking the support or assistance from third parties “It is a whole new ball game with rumours ricocheting around the digital world.” -UK SME-
  22. 22. New media has increased pressure during crises, but used correctly IT CAN HELP manage reputation 70% of respondents believe that new media is playing an increasing role in driving reputation during crisis 59% Think that new media has significantly increased the potential cost of a crisis 64% believe that new media (including social media) makes crises more difficult to manage 50% Think social media has made it harder to recover from a crisis, while the other 50% believe it has made recovering easier 60% Believe that it is hard to know who influences opinion online Base: Overall (201)
  24. 24. 91% say that their company has a clear corporate purpose QCP1 What do you understand by the term ‘corporate purpose’? QCP1 To what extent do you agree or disagree that your company has a clear corporate purpose? Disagree 8% but only 45% “strongly” agree; 46% agree “somewhat” “Your governing ethos, what makes the company tick” -UK enterprise- “This is the identity of a company” -France enterprise- 91% Agree Base: Overall (201); agree & disagree (top 2 box)
  25. 25. Corporate purpose enables organisations to deliver across key reputational metrics QCP4 To what extent do you agree or disagree with the statements below? (% strongly agree) 52% amongst those with a plan and only 32% amongst those without 45 Has a CP No CP* 27% amongst those without a plan 43 41 37 40 22 22 28 17 11 My company has strong leadership My company invests in employee development My company contributes to society My company acts in an My company invests in the local environmentally responsible way community *Denotes a low base size Base: Companies with a CP (183); Without a CP (18)
  26. 26. And becomes EVEN MORE IMPORTANT during a crisis Q44A Did you use your corporate purpose in external communications to talk about what you do and why you do it, in dealing with the crisis? Q44C To what extent did having a clear corporate purpose help you in managing the crisis? “It acted as a reminder to staff of the objectives of the business” -France SME- OF THOSE THAT HANDLED THEIR CRISIS INTERNALLY USED THEIR CORPORATE PURPOSE TO MANAGE IT “It was important to keep customers and the media updated as to the impact and what actions we were taking.” -UK enterprise- “We tried to promote our quality work emphasizing the ethics of the way we work.” -Italy enterprise- 90 Helped Did not help 11 2013 Base: Among those that experienced a crisis and had a clear corporate purpose (76); among those that used their corporate purpose to handle their crisis (57 )
  28. 28. Crisis plans are seen as BENEFICIAL yet half of companies still do not have one in place Q95 To what extent do you agree or disagree that having a crisis plan in place would benefit your company? Q96 Does your current company have a crisis management plan? 49 51 51 76 86 85 Yes Agree Disagree No 51 49 49 2009 2011 2013 23 14 16 2009 2011 2013 Base: Overall 2013 (201); overall 2011 (204); overall 2009 (200)
  29. 29. A third of those without a plan say crisis management planning is NOT A PRIORITY Q157 What are the key barriers to developing a crisis management plan for your company or organisation? (Amongst those without a plan) It’s not a high enough priority 33 It’s rarely going to be needed 31 It’s expensive 25 My business doesn’t need a crisis management plan 24 It would take too much time to plan 18 I don’t feel I have enough information about what is out there and how it could benefit me 14 Too difficult to manage 14 I think setting up such a plan within my company would be difficult to accomplish Base: those without crisis plan (99) 10 2013
  30. 30. FINANCIAL planning and evaluation of SCENARIOS are the most important components of a plan Q65-89 How important are each of the following components to a crisis preparedness/communications plan? (% very important, showing top 10) Financial planning in case of a crisis 29 53 35 30 29 29 Evaluation of possible scenarios Action Plan for crisis management 43 29 28 Prepared crisis check lists 27 22 A previously set-up crisis team 37 26 25 23 Issue monitoring 2013 27 22 Internal Audit on crisis awareness, preparedness and management' 2011 30 23 25 25 Plan to liaise with online stakeholders 23 24 Receive training from your internal crisis team 24 21.00 24 Media training 18 19 2009 24 Base: Overall 2013 (201); overall 2011 (204); overall 2009 (200)
  31. 31. 24% of those with a plan have NOT TESTED it in the past year Q106 In the past 12 months have you done a crisis communications exercise to test the efficacy of your plan in any of the following areas? Online or digital security failure IN THE EVENT OF CRISIS: 31 Technical accidents BELIEVE THAT THEIR PLAN WILL COVER THE COMPANY TO SOME EXTENT, BUT THERE WILL BE GAPS 30 None of the above 24 Intense regulatory scrutiny of your product or company 21 Controversial company developments 21 Logistic difficulties 19 Danger to product safety Criminal actions Intense political scrutiny of your product or company 16 12 11 Base: those with a crisis plan (102) 2013 OF COMPANIES THAT HAVE SUFFERED A CRISIS THINK THEIR CURRENT PLAN STILL HAS GAPS
  32. 32. 51% of companies recover from crisis within a year but those with a crisis management plan RECOVER FASTER Q45 How long would you say it took your company to recover from the crisis? 2009 2011 2013 OF COMPANIES WITH A CRISIS MANAGEMENT PLAN RECOVERED IN 6 MONTHS 57 VS 44 38 26 19 15 10 11 6 15 11 8 6 6 2 2 weeks or less 2 weeks-1 month 2-12 months 1-2 years 3-5 years 2 4 0 OF COMPANIES THAT DON’T HAVE A PLAN 5 years or more Base: Those that experienced a crisis 2013 (82); those that experienced a crisis 2011 (123); those that experienced a crisis 2009 (106)
  33. 33. When it comes to planning for a crisis, there are THREE TYPES of company Boy Scout (Well-Prepared) Those with strong, comprehensive plans, which will stand up to the pressure of a crisis 20% Tightrope walker (Vulnerable) Ostrich (Exposed) Companies with plans that will not necessarily cover them, or which aren’t sufficiently comprehensive Lack plans entirely, they see only barriers to creating plans and thus avoid making them 40% 40%
  34. 34. THE NUMBER OF EXPOSED COMPANIES HAS INCREASED SINCE 2011 Boy Scout (Well-Prepared) Tightrope walker (Vulnerable) 2011 2011 2013 22% 20% 2013 45% 40% Ostrich (Exposed) 2011 2013 33% 40%
  35. 35. STILL ONLY ONE IN FIVE COMPANIES ARE PREPARED FOR A CRISIS Boy Scout (Well Prepared, 20%) • • More crisis focused than other groups • 70% review their plan every year • All say that their plan would be satisfactory to take on a crisis. • Have a specific digital crisis comms plan (76%) • Most common components include: • Evaluation of possible scenarios (49%) • Action plan for crisis management (46%) • Prepared crisis check-lists (44%) • Internal audit on crisis awareness, preparedness, and management (41%) • 35 More likely to think a crisis management plan is important (46%) Most likely to have a clear corporate purpose (63%) and strong leadership (66%)
  36. 36. TWO IN FIVE COMPANIES ARE VULNERABLE Tightrope Walker (Vulnerable, 45%) • • But less engaged with crisis management than the Boy Scouts: • Only 34% say a crisis plan is very important • Less likely to review plan frequently (58% review their plans every year or less) • Only 32% say their plan would be satisfactory in the event of a crisis • Main barriers to developing a more adequate plan are the time it would take (22%), a lack of information (21%) and the cost (17%). • Less likely to have a clear corporate purpose (51%), strong leadership (51%), and to invest in employee development (48%). • 36 Have a crisis management plan, and put importance on this (34%) Less likely to have a digital crisis comms plan (66%).
  37. 37. TWO IN FIVE COMPANIES ARE CURRENTLY UNPREPARED FOR A CRISIS Ostrich (Exposed, 35%) • • Less likely to have a clear corporate purpose (36%) or strong leadership (31%), or to invest in employee development (29%). • The barriers to creating a plan are: • Thinking it's rarely going to be needed (35%) • It’s not high priority (32%) • It's expensive (25%) • 37 Do not have a crisis plan – though 27% have experienced a crisis • 39% are currently in a crisis. Less likely to think having a plan would decrease recovery time in the future.
  38. 38. In summary  The threat of crisis remains a key concern for business leaders  For many companies crisis management is still handled internally  New media has added to the challenge of managing crises  A clear corporate purpose is a vital tool in the current landscape  Business decision makers are split on whether leadership in a crisis UNLIKELY TO UNLIKELY TO should be about command and control, or collaborationEXPERIENCE EXPERIENCE REGULATORY SCRUTINY crisis planning is still  However, remain unprepared POLITICAL SCRUTINY imperative and many companies
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