Does your company need a Crisis Health Check?

Does your company need a Crisis Health Check?

June 4, 2021

In a crisis, the public often wants to find someone to blame. Recently, for example, Credit Suisse had to face public criticism and accept responsibility because of the Greensill and Archegos cases. But even “the good guys”, such as the NGO Oxfam, are affected by unsavoury revelations, as exemplified by the reports of sexual abuse by Oxfam staff in Haiti and Chad. Whether such news develop themselves into a veritable crisis depends largely on the organisation’s response. A crisis can cause lasting reputational damage, that reduces the value of the organisation. However, a well-managed crisis can lead to reputational gains in the medium term and strengthen the organisation’s resilience. Does your organisation have the prerequisites for this?

Crises take different forms, can have external effects, or remain internal, vary in cause and scope. Ultimately, however, they are part of the natural life cycle of every organisation. Some crises can be avoided with the help of good preparation, and warning and monitoring systems. Others have their cause outside of the organisation, for which it simply bears no responsibility. Nevertheless, we believe that every company must prepare for both types of crises from early on.

Crisis communication – more than just press releases

An elementary component of crisis management is crisis communication. This means, the exchange with various stakeholders during an acute crisis situation. Although the media often attract much of the attention – they are fast, loud, and intrusive – they are far from the only actor to be paid attention to during a crisis. Relevant information and an empathetic, reassuring response from the company must also reach employees, customers, suppliers, and other business partners. Other stakeholders include the authorities involved, relevant and interested politicians, and public key opinion leaders (KOLs). Institutionalised communication can have a decisive influence on the further course of the crisis.

To succeed in this, the people who are in contact with these stakeholders must be briefed accordingly in the event of a crisis. It is important to present a unified “message”. In addition, they should not treat communication as a one-way street. Reactions and feedback from stakeholders must be heard, taken on, and be included in crisis management.

However, communication during a crisis is only one aspect of dealing with crises. It is also important to view crisis management as a process and to build stable structures and a corresponding corporate culture.

Crisis management in four phases – the «Relational Model»

In the English-speaking world, a distinction is sometimes made between “issue management” and “crisis management”. While the former refers to the constant confrontation with the environment and its critical issues, the latter refers to the management of an acute crisis. However, because we view effective crisis management as a holistic process, we believe that this distinction is of little relevance. For structuring purposes, we prefer the “Relational Model”.[1] The model divides crisis management into four phases: crisis preparation, crisis prevention, crisis incident management, and post-crisis management.

Each of these four phases contributes to making the company more crisis resistant. This includes continuous monitoring, the distribution of crisis-relevant roles and responsibilities, or the debriefing and reappraisal of a crisis situation that has been overcome, with the necessary structural and procedural adjustments.

Structure as a prerequisite for holistic crisis management

Far too often, the sole responsibility for the above-mentioned measures rests with a single compartmentalised team. However, crisis preparation and response must be cross-functionally, interdisciplinary, and vertically integrated to build sustainable resilience. Information on existing risks resides in the individual business units and only when there is cross-functional collaboration can a holistic picture of an organisation’s situation be built.

Crisis management as an organisation-wide function should be treated in a similar way to annual growth figures, share price growth, or product innovation, i.e. factors that underpin the sustainable existence of the company. In absence of sound crisis management, the performance of the other factors may be quickly undermined.

Corporate culture as the basis for crisis resilience

In addition to structural adjustments, a culture is also needed that is prepared to accept the idea of crisis management. This is not always the case. All staff must be aware that they are part of one or more of the four phases.

Employees who are directly involved with the products, the customers, or the production sites are the first line of defence against threats that lead to crises. In their work, they must be alert to possible crisis situations and communicate their observations. This requires an additional level of thinking, which can be learned. In second place comes the team that has the expertise in crisis management and maintains the structures. This can be, for example, the communication and public affairs team. They advise the operational staff on preventing crises and dealing with risks. The third and last line of defence is the compliance department, which checks compliance with preventive measures and gets involved in an advisory capacity.

How do we improve crisis management?

Following the philosophy that crisis management starts in good times, Dr. Borer Consulting also deals with organisations that are not in an acute crisis situation but want to revise their crisis management. We often observe that the overall commitment to risk-conscious management in the company can be improved. Other missing elements are experience with crises or the holistic view of an issue, such as political or social reactions to an internal incident. In the “Crisis Health Check” we analyse the existing structures to identify weaknesses and threats. Based on this evidence based analysis, we define and work out with those responsible where the company wants to go. Sometimes only selective interventions are necessary, such as Crisis Media Training or the introduction of an internal communications unit. In other cases, profound structural or cultural changes are required to bring the company back on a calmer course. We build a programme tailored to the organisation that includes such tools and training. Ultimately, every company is capable of building crisis resilience once the need for it is recognised.

If a crisis is already underway, Dr. Borer Consulting offers ad-hoc support to avoid long-term reputational damage. With a broad network in politics and the media and 20 years of experience in crisis management, we are ideally placed to support you in the event of a crisis.

Eveline Hutter, Consultant

If you would like to know more about Dr. Borer Consulting’s crisis management services, please contact us at bertram@tbf-consulting.com or +41 43 499 73 83.

 

[1] Jaques, Tony, “Issue management and crisis management: An integrated, non-linear, relational construct,” Public Relations Review, 33, no. 2 (2007): 147-157, https://doi.org/10.1016/j.pubrev.2007.02.001.

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