iModule 9 – Elements of the Crisis Management Plan




Module                               9
ELEMENTS OF THE
CRISIS MANAG...
#Module 9 – Elements of the Crisis Management Plan   #.3




Objectives
On completing this module you should be able to:

...
# . 4 PRL2001 – Issues Management and Strategic Planning




Fink gives the analogy of a torch when an issues arises. If s...
#Module 9 – Elements of the Crisis Management Plan    #.5




Should an issue arise, in its early stages management needs ...
# . 6 PRL2001 – Issues Management and Strategic Planning




Management of any organisation in a high-risk industry must v...
#Module 9 – Elements of the Crisis Management Plan   #.7




As Campbell (1997) says in quoting Henry Bosch in The Directo...
# . 8 PRL2001 – Issues Management and Strategic Planning




The next task is to devise an issue management plan. Fink say...
#Module 9 – Elements of the Crisis Management Plan    #.9




• almost one quarter of those who had no crisis communicatio...
# . 1 0 PRL2001 – Issues Management and Strategic Planning




Hopefully you will never need to resort to the plan! But sh...
#Module 9 – Elements of the Crisis Management Plan   #.11




alternatives; define expected outcomes; and specify communic...
# . 1 2 PRL2001 – Issues Management and Strategic Planning




   – communication systems – formal and informal

• Identif...
#Module 9 – Elements of the Crisis Management Plan   #.13




9.4.1 Familiarisation with Operations
It is essential that t...
# . 1 4 PRL2001 – Issues Management and Strategic Planning




• environmental incidents or accusations;
• incidents causi...
#Module 9 – Elements of the Crisis Management Plan   #.15




9.4.6 Producing a Crisis Management Manual
The function of a...
# . 1 6 PRL2001 – Issues Management and Strategic Planning




3. Crisis communication strategy

    – divided into the ca...
#Module 9 – Elements of the Crisis Management Plan   #.17




List of References
Baskin, O.& Aronoff, C. 1988, Public Rela...
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  1. 1. iModule 9 – Elements of the Crisis Management Plan Module 9 ELEMENTS OF THE CRISIS MANAGEMENT PLAN9
  2. 2. #Module 9 – Elements of the Crisis Management Plan #.3 Objectives On completing this module you should be able to: • discuss the importance of crisis planning for organisations in high risk industries; • outline the elements which may be included in a crisis management plan; and • understand the process involved in crisis management planning. Learning Resources Selected Readings 9.1: Humphreys, K. 1992, ‘Crisis planning: Necessity, not luxury’, Bank Marketing, June, pp. 34–5. 9.2: Cohn, R. 1991, ‘Pre-crisis management’, Executive Excellence, October, p. 19. 9.3: Taback, H. 1991, ‘Preventing a crisis from getting out of hand’, Risk Management, October, pp. 64–6, 68–9. 9.4: Asprey, J. & Woodhouse, N. 1992, ‘Strategies for survival’, Management Services, November, pp. 14–16. 9.5: Morrow, R. M. 1992 ‘Coping with crises’, Public Utilities Fortnightly, September, pp. 20–2. 9.6: Oshins, A. 1992, ‘Maintaining continuity during a crisis’, Risk Management, December, p. 55. 9.1 The Importance of Planning It would be obvious to you now that every business whether large or small, public or private should have an issues management plan. It is important too that every employee should be aware of the plan and that they feel that they can have some input into the overall decision making process. It is often the employee who is closest to the operating environment of the organisation; hence they will be the first to pick up on issues that might arise. The outcome of issues management will in the long term be reflected not just in the success of the organisation but also in the proper management and the jobs of those affected in the workforce.
  3. 3. # . 4 PRL2001 – Issues Management and Strategic Planning Fink gives the analogy of a torch when an issues arises. If says that if ever you have been caught in a sudden power blackout the first thing you look for are the candles of the torch to help you find your way around the house or office. Assume he says that you need to find the torch at home. In the first moments of the power outage, a few possible causes of the darkness – and solutions for restoring power – run through your mind. None of these causes is very serious. But you realise that you can not discover the cause (and certainly cannot achieve a solution) without first finding the torch. It doesn’t matter the cause of the problem we cannot do anything without first getting some form of light that will help us locate the cause of the problem. I any one of us has been at home when the lights go out and you can’t find the torch because the kids have taken it and used it or you haven’t put back where it should be you will understand how frustrating, time consuming and stressful the situation can get. Organisations are just like that. When they find themselves in the dark and have no guiding light (in the form of research, issues analysis or plan) the problems soon can get out of hand. At home we can plan for a power failure – when the lights are on or in the daylight. We have time to look around locate where things are kept and have plenty of time to anticipate and plan. Problems in managing issues seem to occur when they become sudden, unexpected, unanticipated and unplanned for. In putting together an issues management plan for the organisation all that is really happening is planing for the unexpected well enough in advance so that when an issue affects the operating environment of the organisation a proactive plan can be initiated. Fink says that should an issue occur – and it will – the organisation needs to plan ahead so that in the heat of the moment decisions can be made calmly and effectively. Fink sees that an effective issues management plan presets certain key decisions on the mechanical portions of the crisis – those aspects that rarely vary– allowing the practitioner to manage the content portion of the issue. Taking a contingency approach and learning to ask ‘what if’ type questions allows us to make assumptions about the questions and the answers. ‘What if such and such occurred – what we would do is this.’ Contingency type planning is what many of the large international organisations are doing to establish some form of comprehensive issues management plan. I remember when I worked in public relations for the electricity industry in North Queensland. Each year we would update procedures for dealing with cyclones and the destruction that could follow in the event of one crossing the coast. Manuals were written and a long list of ‘what if’ type questions were asked to form the basis of a manual that covered everything on how to manage types of issues. Through thorough planning for the types of issues that an organisation might encounter, a comprehensive management plan can be compiled that deals with the mechanics of the issue. By knowing the mechanics of any issue management is in the enviable position to deal with the content of the issue.
  4. 4. #Module 9 – Elements of the Crisis Management Plan #.5 Should an issue arise, in its early stages management needs to take immediate control, not be bothered about why the issues has occurred. That can be left to the wrap up and evaluation stages after the issue has passed. When the issue occurs you need to be able to know what plans have been made, how they will be implemented, when and where the plans need to take place – all crucial questions in the issues management process. No matter what the issue, if it fits a certain preplan, the organisation will be ready to act. Fink says that there are times when the organisation must ask ‘why’; in order to respond, Sometimes a second level of intelligence via research is needed before the organisation is able to reposed or know how to respond properly. In any case, fast effective on going research can tell us • the extent of the problem; • how it might impact on the organisation; and • how the organisation might respond to the issue. In discussing crisis management, we have so far talked about the importance of corporate responsibility and maintaining strong relationships with key stakeholders, the basic principles of communicating quickly and honestly and how important it is to manage the messages surrounding a major incident or accident. We have outlined some important things to bear in mind when dealing with the media, the importance of communicating to internal stakeholders at all levels of an organisation and the need to illustrate the high priority an organisation places on resolving the situation. So how does the management team of an organisation ensure it puts all of these elements into play successfully when a crisis has already arisen and the pressure is on? The answer is planning. Greening and Gray (1994) suggest that industries can be highly exposed to social and political issues. In the same way, certain industries have a high exposure to crisis situations. A survey conducted in Queensland in 1999 by one of the world’s largest professional services firms, Pricewaterhouse Coopers and global communication management firm, The Rowland Company, listed these industries as: • mining and energy; • transportation; • food production; • health; and • construction. All of these industries have a high exposure to risk – through situations such as accidents, accusations of malpractice, contamination, high profile protests and major, production related issues.
  5. 5. # . 6 PRL2001 – Issues Management and Strategic Planning Management of any organisation in a high-risk industry must view the likelihood of a crisis situation taking place as inevitable and then act accordingly. Only when this attitude is adopted do management teams dedicate appropriate resource levels to preparation.
  6. 6. #Module 9 – Elements of the Crisis Management Plan #.7 As Campbell (1997) says in quoting Henry Bosch in The Director at Risk: ‘A great deal can and should be done to anticipate crises and to prepare for them. If a thorough risk assessment programme has been carried out and an emergency response plan and other appropriate policies have been put in place, the company’s ability to deal with a crisis will have been enhanced.’ A planned and rehearsed response ensures that an organisation is able to take immediate action to control the flow of information in a crisis situation, ensuring that accurate, consistent messages are rapidly relayed to all stakeholder groups. By having tried and tested crisis management procedures in place, organisations are much more able to bring a crisis under control and minimise the damage to corporate reputation. Before the organisation is able to respond or know how to respond properly fast effective on going research can tell us: • the extent of the problem; • how it might impact on the organisation; and • how the organisation might respond to the issue. Before the organisation puts together its issues management plan it first must assemble an issue management team or teams. Every issue demands an issue management team to provide effective direction and control of the situation. And each scenario type issue might require a different team. There should however be a central core management consisting of: • senior management; • the communication head; and • a representative of the personnel and legal professions. One of the first tasks of the central core is to draw up lists of names that can be added to the team depending on the type of issue at hand. This is done so that when an issue occurs time is not lost wondering who should help initiate a plan of action. Having pre-empted the decisions at a time when everything is operating smoothly for the organisation allows for a clear decision making process. The objective of asking ‘what if’ type questions in the good time is to make as many mundane, routine decisions as possible so that in the heady moments of the issue guesswork is taken out of the situation. An organisation needs to diffuse the situation as much as possible. For those named as part of the issues management team, one of their first tasks is to name replacements for themselves on the team if, for whatever reason, the first team is unavailable. This may sound odd but during my time in the electricity industry half of the Board were killed in a plane crash as they were returning from a regional meeting. Immediate replacements needed to be made to direct operations during and after the tragic period.
  7. 7. # . 8 PRL2001 – Issues Management and Strategic Planning The next task is to devise an issue management plan. Fink says that at this stage the central core of the management team presents to the added team members a list of possible types of issues and merely says: what do we need to so to solve these? The added team members, after seeing whether any other types of issues have been overlooked they then set out to provide for all possible broad based contingencies. Contingency planning merely asks and answers its own ‘what if?’ questions. The next step is to formally put the plan to paper asking who will be the organisation’s spokesperson. In many instances don’t think that the CEO is the best person for the job. Often the CEO has a background distant from public and media exposure and may not necessarily be the best person for the job. The responsibility of the issues management team and the organisation as a whole is to select a spokesperson who will best present, explain and defend the organisations position. In some instance it may be necessary to have two or more spokesperson’s who can adeptly field questions on their areas of expertise deflecting the possibility of getting caught up in a situation where credibility may be lost. Once the organisation hierarchy has approved the plan in principle, Gigliotti and Jason (1991) suggest that specific concurrence must be obtained from the various department heads or staff managers, who have the responsibility and authority for directing the actions of others and/or who may control certain aspects of the plan. This concurrence must be unequivocal if the plans are to be meaningful and successful. As stated earlier it is important that an issues management team be composed of people who can direct and take responsibility for any necessary action. 9.2 The Crisis Preparedness of Organisations in High Risk Industries The Pricewaterhouse Coopers/ Rowland study we discussed earlier, surveyed the 996 largest organisations operating in high risk industries in Queensland. The objectives of the survey were to: • assess the use of risk and crisis management methodologies in Queensland organisations; • assess the plans organisations have in place to protect their reputations and key relationships in the event of a crisis situation; and • understand why organisations in high risk industries do not have crisis management plans in place. The major results of the survey were: • forty three percent of respondents had no crisis communication plan; • thirty eight percent of organisations who had no plan said this was because they had ‘never thought about it’.
  8. 8. #Module 9 – Elements of the Crisis Management Plan #.9 • almost one quarter of those who had no crisis communication plan believed they ‘could handle a crisis without a plan’. • forty two percent of the organisations surveyed rated the likelihood of their organisation facing a crisis in the next five years as ‘likely’ to ‘highly likely’; and • The perceived effects of a crisis on the organisation were loss of business, loss of the community’s trust and goodwill, loss of customer loyalty and decrease in profit. 9.3 Crisis – the Risk of Being Under- prepared The explosion which occurred at the Esso gas production plant at Longford, in Victoria’s East Gippsland area in September 1998 is one of Australia’s most potent examples of the implications a crisis situation can have for the organisation at its centre. Following the explosion, Victoria’s gas supplies were shut down for a number of weeks. The estimated cost to industry was more than $15 million per day. More than 50 000 workers were stood down from their positions. Victorian residents were forced to live without cooking or hot water facilities. Industry icons such as Ford and Coca-Cola shut down their plants and laid off their workers. The National Union of Workers and the Australian Workers Union threatened legal action against Esso. Industry analysts made public accusations that Esso held an unreliable monopoly over the State’s gas supply and called for legislation to break that monopoly. As a result of the halt in Victorian industry, analysts began to warn of a looming influx of cheap imported products from which Australian industry may never recover. Media coverage of the crisis was intensive and extended throughout Australia for a number of weeks. In short, Esso found that its primary stakeholders (i.e. those directly affected by the crisis) extended to Victorians in almost every walk of life. Opinion leaders from within the gas industry, from all forms of production-related and service industries, as well as economists, politicians and emergency services workers were called on by the media for public comment. An audience that extended throughout Australia and beyond, judged Esso’s performance and response to the situation with interest as the situation unfolded. Plans are not made to be rushed into. They need careful and deliberate consideration and attention given to all key stakeholders including local, state and federal governments. One of the best approaches to planning involves the drafting of a preliminary outline of what the issue is and how it will impact on the organisation, listing the threats and likely consequences to the organisation. It is only after the initial outline is provided that any detailed information is added, progressing in a logical order of impact from the lowest threat through to a worst case scenario and beyond through to the evaluation stage where action needs to be taken to resume normal operating environments. While no single plan is applicable to every issue a good generic plan, Gigliotti and Jason say, can be modified to meet specific site requirements.
  9. 9. # . 1 0 PRL2001 – Issues Management and Strategic Planning Hopefully you will never need to resort to the plan! But should you do the plan enables the practitioner to quickly and easily identify key responsibilities and personnel. Make certain that those who have been given responsibilities in the plan know what their tasks are well before you need to refer to the plan. Often it is too easy to forget to inform people thinking that would know what needs to be done. Leaving decisions to the last minute where individuals have no guidance as to what is expected from them is a sure way to destroy any credibility the organisation may have in controlling the situation. After completing the final draft of the plan it should be reviewed by all parties who may be required to perform or provide support services in accordance with the provisions of the plan. These independent reviews, according to Gigliotti and Jason will probably result in further modifications. If during the final drafting process substantial changes are made by any one person all parties involved in the plan should have the opportunity to review such changes since they may impact on their responsibilities. After the plan has been finalised and communicated to all affected personnel it must be tested to determine its strengths and weaknesses. Gigliotti and Jason offer the following advice. Initially, exercises should be conducted involving key personnel only. As these personnel become intimately familiar with plan requirements, the scope of participation may be expanded until the plan involves all key stakeholders who would be used in dealing with the actual issue. While the majority of exercise may be walk-through to test each person's understanding of their role and responsibility there should also be a major announcement to test all support and ancillary departments. During the testing period external consultants or observers should be used to provide feedback of the plan. Newsom says of the planning process that any organisation’s public relations efforts exist to support the overall mission of the organisation. For that reason, any public relations department development of a plan has to start with a mission statement or purpose. The way that it develops from there often depends on the nature of the organisation, but the nature of the plan remains the same. Like Gigliotti and Jason, Newsom says that most organisations develop their mission statement early and is generally followed by a review of the long range objectives of the plan. Newsom says that mission statements set the tone for the organisation, establish its character and define the perimeters of its activities. As part of the issues management/crisis planning process Baskin and Aronoff said the practitioner needs to consider a: Problem statement: This statement should reflect the research that has been done to narrow the task to a manageable size. It should define the scope of the effort and recognise any special requirements of the organisation, target audiences and media. Purpose statement: This statement should present a realistic view of what the plan is designed to accomplish. Clear objectives should be developed that can be measured against results to determine the effectiveness of the effort. Audience analysis: Based upon preliminary research, the planning document should describe the primary target audience; identify appeals and point of interest; define audience lifestyles and determine the relative strength of each possible appeal. Actions recommended: The planning document should tell how the purpose will be accomplished for the audience that has been identified. It should discuss specific tactics and
  10. 10. #Module 9 – Elements of the Crisis Management Plan #.11 alternatives; define expected outcomes; and specify communication media, activities and channels to be used. Time frame: A schedule of activities should be developed to meet the expected impact of the issues on the operating environment of the organisation. Evaluation: A method should be set up in advance to determine the extent to which the objectives of the campaign have been reached. All objectives should lend themselves to an evaluation process. The issue management plan should be part of the standing plan of the organisation. These reflect certain programmable decisions that call for standardised consistent responses. Standing plans can reflect policies, procedure an rules. Policies: These are generally established to aid the decision making process. Policy is usually made in ways consistent with organisational objectives. While they may originate informally and develop as a pattern over a long period of time that can also result from recommendations from employees as to the best way of dealing with an issue. Procedures: Detailed guidelines for implementing policy decisions are called standard procedures. Standard procedures help provide detailed instructions for performing a sequence of actions required to take control of issues. Procedures are often task related and should be contained as part of the operating manual that addresses points of issue. Rules: While policies and standard procedures serve as guidelines for decision making, rules substitute for decisions. They are statements which specify the action to be taken in a particular situation. Baskin and Arronoff suggest that they provide for no latitude for application except to decide whether to follow or not follow the rule. Rules may be necessary when certain procedures are crucial. Good issues management demands good planning. Issue management decisions are not knee jerk reactions and spur-of-the-moment decisions that will often produce short term gains an long term losses. The process of planning is slow and complex but can effectively establish a system of goals that an be used to measure issue management success. 9.4 Crisis Management – A Methodology The process of developing and putting in place a crisis management plan consists of the following steps: • Ensure familiarisation with all operations. • Gain managerial commitment. • Review existing plans – emergency response plans – the organisation’s media relations plans and media protocol
  11. 11. # . 1 2 PRL2001 – Issues Management and Strategic Planning – communication systems – formal and informal • Identify potential crisis situations. • Develop crisis management procedures. • Produce a crisis management manual. • Conduct training. • Test crisis management procedures. • Keep the manual current.
  12. 12. #Module 9 – Elements of the Crisis Management Plan #.13 9.4.1 Familiarisation with Operations It is essential that the management team responsible for designing an organisation’s crisis management plan is completely familiar with all areas of their organisation’s operations. That is, they must have spent time ‘at the coal face’. They must know how workers are likely to react, they must develop an understanding of how operational areas actually function and they must know what the immediate repercussions of a crisis situation are likely to be on site. A high level of familiarisation with the organisation’s operations will also assist the crisis management planning team to determine what formal and informal communication systems are in place, which stakeholder groups they address and the risks to which the organisation is exposed from an operational perspective. 9.4.2 Gaining Managerial Commitment It is critical to ensure that the crisis management planning process has the full commitment of all members of senior management. Only in this way, can an organisation ensure the ‘buy in’ of all staff, in all areas of the organisation. 9.4.3 Reviewing Existing Plans To ensure a coordinated effort and minimise any chance of misinformation, it is also essential to ensure crisis management procedures are integrated with: • existing internal emergency procedures; • incident reporting procedures; • formal and informal internal communication systems; • emergency Services procedures and systems; and • state disaster plans if relevant. In order to achieve this, the crisis management planning team must carefully review all relevant documentation, liaise closely with human resource personnel, and conduct one-on- one interviews or workshops with staff to determine the nature of informal systems. 9.4.4 Identifying Potential Crisis Situations One of the most important steps in planning for crises is to identify the major risks that face the organisation. In the case of a mining company, for instance, these risks might be categorised into the areas of: • accidents causing death or injury;
  13. 13. # . 1 4 PRL2001 – Issues Management and Strategic Planning • environmental incidents or accusations; • incidents causing loss of production; and • business related incidents (e.g. an errant trader entering deals which have a dramatic negative effect on share price) More and more, organisations are contracting specialist risk management firms to assist in analysing the risks to which they are exposed. If members of the crisis management planning team do not have expertise in this area, the option of engaging an outside specialist should be seriously considered for this stage of the process, as it is essential to the integrity of the crisis management procedures and manual. Alternatively, the crisis management planning team may convene a series of workshops (involving staff from all levels and areas of the organisation) and one-on-one interviews to assist in the risk analysis process. Importantly, once an organisation’s major risks have been identified, they should be grouped into three or four categories (similar to the example given above) so that the crisis response procedures and crisis management manual can be designed around these categories. Information gained through the risk analysis process should then be used to: • determine those potential problems and emergency situations which have the potential to become crises; • develop scenarios for these potential crisis events; and • determine the general communication requirements which should be addressed in the organisation’s response to any crisis, as well as those particular requirements which are specific to individual scenarios. 9.4.5 Developing Crisis Management Procedures In developing an organisation’s crisis management procedures the crisis management planning team should: • provide guidelines on when a situation should be considered a crisis; • summarise the responsibilities of the Crisis Management Team; • clearly define for each type of crisis situation the actions to be taken by members of the Crisis Management Team; • integrate the communication plan into the organisation’s existing emergency response procedures; and • produce a Crisis Management Manual.
  14. 14. #Module 9 – Elements of the Crisis Management Plan #.15 9.4.6 Producing a Crisis Management Manual The function of a crisis management manual is to ensure that members of the crisis management team have all the information they need to carry out their roles quickly and correctly. An effective crisis management manual should: • outline step-by-step procedures to be followed by the crisis management team; • be in a user-friendly format to ensure that procedures can be easily followed in the initial panic that is inevitably most people’s immediate response to a crisis; • include agendas, checklists and forms to be used by the crisis management team in crisis situations; • include up to date contact lists for key stakeholders; • include a data base of potential third party endorsements with whom relationships have been formed during the planning stages; and • include possible opponents the organisation must consider. Following is one example of the elements a crisis management plan might contain: 1. A section outlining the preparation that must take place in order for the organisation to be ready to deal with a crisis situation. This section might include: – an incident management flow chart for the organisation; – an outline of roles and responsibilities of the crisis management team (CMT); – contact details for CMT members; – location of crisis management centre and material with which it should be equipped; – outline of material that must be prepared and training that must be completed for the organisation to be crisis-ready. 2. A section outlining immediate response to a crisis situation, including: – list of questions to help CMT leader record the facts of the situation when he or she received initial notification; – checklist for identifying a crisis situation; – list of urgent action to be carried out before the first CMT meeting; – agenda for first CMT meeting.
  15. 15. # . 1 6 PRL2001 – Issues Management and Strategic Planning 3. Crisis communication strategy – divided into the categories of crisis developed at the risk identification stage of the planning process. For each category of crisis, the strategy would list: – sample key messages; – stakeholders; – methods for communicating with stakeholders; – third party endorsements; – opponents; – sample holding statement. 4. After the crisis: – strategies for ‘closing’ a crisis situation in the minds of stakeholders; and – actions to be completed after crisis situation. 5. Samples of all checklists and pro formas included in the manual. 9.4.7 Conducting Training Any crisis management manual is only as good as the training received by: • members of the CMT and their alternates; • ‘front line’ staff (i.e. receptionists, security guards etc); and • media spokespeople. It is absolutely critical that every member of each of these groups is fully aware of the role they are to play in a crisis situation, the resources they need to access and how to use them and the techniques and systems they need to employ. It is just as important that training is kept current as staff changes occur and that ‘refresher’ training is conducted regularly. 9.4.8 Keeping the Manual Current Just as training needs to be kept up to date, so the contents of the manual, and all relevant data bases, must also be kept current. As a rule of thumb, updates should occur every six months, as well as whenever staff members or major stakeholders change and as new areas of business operations are introduced.
  16. 16. #Module 9 – Elements of the Crisis Management Plan #.17 List of References Baskin, O.& Aronoff, C. 1988, Public Relations: The Profession and the Practice, 2nd edn, Wm C. Brown, Dubuque, Iowa. Fink, S. 1986, Crisis Management: Planning for the Inevitable, American Management Association, New York. Gigliotti, R. & Jason, R. 1991, Emergency Planning for Maximum Protection, Butterworth Heinemann, Boston. Greening, D. W. & Gray, B. 1994 ‘Testing a model of organizational response to social and political issues’, Academy of Management Journal, vol. 37, no. 3, pp. 467–98.

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