Peter Gavan, Director of External Affairs, Severn Trent presented on "In the brown stuff... an exploration into the theory and practise of Crisis Management" at Warwick Business School 09/11/2009

1. Strategic Corporate Communications – In a Crisis
In the Brown Stuff
A personal view from a corporate affairs director
My credentials:
Past experience includes: Political Journalist 11 years, Director
Issues and Crisis Management - International PR Agency,
regional role in multi-national company, Corporate Affairs Director
of 3 FTSE 100 companies – a long and undistinguished career in
which …
Airey Neave murder, Grand Hotel bomb, human shields, Kuwait
oilfield deaths, use of forced labour, extortion, product
withdrawals,
withdrawals power and water supply failures corporate
failures,
corruption (Old Bailey) etc, etc.

2. What am I talking about?
What am I talking about?
Risk management – systematic ongoing analysis
Issue management – specific risk management
analysis and action
Crisis management – something scary you
cannot manage in the normal day job – it
becomes the night job
Disaster management – a huge crisis, loss of life,
many organisations/people involved

3. Crisis Management – Basic Lesson One
Crisis Management
Key is not how well you prepare your crisis
management plan
It is
i
How good is y
g your organisation’s business strategy?
g gy
How good are y
g your p p
people’s j g
judgements under
pressure?

4. Crisis Management – Basic Lesson Two
Crisis Management
Do not invest all your time in preparedness
Do invest lots of time in “practising”
practising
judgement against your strategic business

5. Preparation has become an industry……….
Preparation has become an industry……
Risk assessments leading to crisis simulations to test crisis
teams, training, spokespeople, internal communications
aligned, a plan even! (Don’t forget research and watching
the world)
All good stuff you can get through reading a book! Studying
at University even
even….
But are you any good at c s s management……?
ut a e a y crisis a age e t
Judgements needed about people as well as plans
A “little” crisis is best preparation for the real thing…… self
analysis particularly

6. How do you see “it” coming?
How do you see “it” coming?
You might or you might not!
Risk assessments, while useful, aren’t full proof
Issue management can mislead / distract
Don’t assume you can see the crisis that’s going to
engulf y …….
g you
Life ain’t like that……….
You need to be “ready” for what y don’t know /
y you
don’t anticipate

7. What does “good” crisis management feel like……..
What does “good” crisis management
feel like…..
Management on top and in line with business and
comms strategy – consistent messages based on
longer term aims
Decisive action – in the desired direction
Mistakes admitted, responsibility taken, no “grudging”
admissions
Ahead not behind as quickly as possible

8. What does “good” crisis management feel like……..
What does “good” crisis management
feel like…..
Understanding of all stakeholders – and who really
matters
Recovery strategy lasts as long as it takes
takes…..
Victims managed with care

9. Interactive Crisis Management – Scenario One
g
Manufacturer of cider in glass bottles discovers a
g
problem with some yeast – it may or may not be
over-expanding causing a few bottles to explode.
p g g p
Tests will take a few days. Crisis management team
doesn’t know whether more dangerous to recall –
g
bottles will be shaken – or wait for hard evidence
before ordering recall if necessary. A p
g y product
withdrawal could endanger the whole business
which is not brand leader losing hundreds of j
g jobs.

10. Interactive Crisis Management Session - Scenario Two
Interactive Crisis Management – Scenario One
g
Do you advise:
(a) Must order product withdrawal at once?
(b) Wait for evidence and say nothing publicly?
(c) Wait for evidence but say “something” publicly
something
risking panic?
(d) Refuse to advise, saying it is the operational
management who must calculate risk, take
responsibility and therefore decide?

11. Interactive Crisis Management – Scenario Two
An American construction company is building a
chemical plant in Iraq before the first Gulf war – its
staff are taken hostages as human shields after the
invasion of Kuwait Some individuals have specialist
Kuwait.
knowledge which could help make chemical
weapons.
weapons Some are being secretly smuggled out
from the human shield camps to get them away
because its too dangerous to leave them in Saddam’s
Saddam s
hands.
Media
M di enquiries are getting very close t di
ii tti l to discovering
i
the true nature of the work and the men’s
qualifications - and th secret “evacuation”
lifi ti d the t“ ti ”

12. Interactive Crisis Management Session - Scenario Three
Interactive Crisis Management – Scenario Two
g
Do you advise the crisis management team to:
y g
(a) Admit the men’s capabilities publicly i e
men s i.e.
tell truth?
(b) Refuse t comment?
R f to t?
(c) Lie?
(d) Tell crisis team it is the company’s own
fault and you are not p p
y prepared to be p
part
of this?

13. Interactive Crisis Management Session - Scenario Six
Interactive Crisis Management – Scenario
Three
International environmental charity with royal
connections threatened with TV programme
disclosure that donations had been syphoned off
into secret slush fund to hire mercenaries in one
African country to kill poachers in another …
negotiations with programme makers not resulting
in toning down sensationalism presentation
presentation.
Charity riddles with personality clashes.

14. Interactive Crisis Management Session - Scenario Six
Interactive Crisis Management – Scenario
Three
Do you advise:
(a) Disclose whole truth publicly before programme
(b) Respond after programme in reactive as
necessary way
(c) DENY any official involvement and distance
organisation from any rogue elements who may
have acted incorrectly in charity’s name

15. Interactive Crisis Management Session - Scenario One
Interactive Crisis Management – Scenario Four
g
Multi-national oil company business strategy – work
p y gy
anywhere with anyone in the world to get new
supplies of oil and g
pp gas:
Uses local labour to build gas p p
g pipeline in far off
country…. Insists not slave labour but growing public
claims that labour rounded up at g p
p gunpoint by military
y y
regime. You discover truth from office gossip –
corporate centre will not admit full truth but uses
p
crisis management plan to defend company.

16. Interactive Crisis Management Session - Scenario One
Interactive Crisis Management – Scenario Four
g
Do you:
(a) Argue the corporate case?
(b) Blow whistle from within?
(c) Resign in protest?
(d) Leave in good order i.e. when you’ve found
another job!

17. Interactive Crisis Management Session - Scenario Five
Interactive Crisis Management – Scenario Five
g
2008 – You are in the dock of Court 4 Old Bailey y
Criminal Court, the first utility in history to occupy that
spot! Your organisation has already been fined a
p g y
record £36m by your Regulator for deceit and bad
p
practices. The Serious Fraud Office p prosecutor is
demanding fines up to £70m for two offences in 2001
and 2002 and you’ve p
y pleaded g y after more than
guilty
four years of investigations. Your defence persuades
j g
judge to fine y £2m.
you

18. Interactive Crisis Management – Scenario Five
Do you advise your Chief Exec, also in the dock with
you,
you to:
( )
(a) Avoid giving interviews as old regime, not him, to
g g g , ,
blame?
( )
(b) Announce company will take action against former
p y g
management to recoup money?
( )
(c) He should accept full responsibility and apologise
p p y p g
publicly but take no action against any individuals
from the past?
p
(d) Leave court evidence to speak for itself damning
p
past regime – encourage p
g g press office to brief off the
record against former management?

19. A boring old utility……in the brown stuff
g y