Blog Post

Crisis Management

It can be highly effective to think through potential crisis timelines in advance and prepare a response. The risk precedes an event, which triggers an incident, crisis, or disaster that damages the reputation, tests resilience, and pays out on the insurance. The discipline of management planning before, during, and after a crisis is generally now known as Business Continuity Management. The importance of this structured approach will be tackled in the following newsletter. But first, we will deal with the crisis and immediate response as a critical CEO skill set.

Crisis or Disaster?

It is helpful to understand the difference between a crisis and a disaster. The terms should not be used interchangeably. The two are different in both management and treatment. Many a CEO has been caught out by escalation from one to the other as a critical transition in approach is required between the two, especially around media management.

Any untoward event can be defined as a crisis if management is required to divert a proportion of their attention, time, energy, and resources away from normal operations to deal with it. If the crisis escalates and overwhelms management’s capabilities to cope, control will begin to be lost and the event will then be regarded as a disaster. Crises occur on a regular basis and can usually be managed by internal resources. Disasters usually see individuals or groups taking on significant new roles and responsibilities, often with external agencies taking over emergency management of the event. At that point, the shared responsibility moves nature and methodology.

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Unfortunately for the CEOs’ corporate messaging consistency, the technology business world has gone off down its own path and talks about disasters as though they happen every day. Here is a not-very-helpful definition from Wikipedia: “A disaster recovery plan (DRP) is a documented process or set of procedures to recover and protect a business IT infrastructure in the event of a disaster.” The silver lining on this is that if someone in the organization talks about a disaster, disaster recovery, or having a DRP, the CEO can be fairly sure the event is limited to IT.

The CEO must step up – Asian Aviation Case Studies

Ten years ago in the aviation sector, there was a realization that changes in global media coverage had altered the corporate approach to crisis management forever. It became apparent around that time that in any plane accident with fatalities anywhere on the planet, there would be about fifteen minutes before the company CEO would be expected to make an initial statement on CNN.

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At the time this was a shocking transition for some. Management teams had historically relied on having sufficient breathing space to get people together, share accurate coordinated information, and achieve a consensus before making factual, helpful announcements. For an airline as for every business with a global footprint, the senior management team could be anywhere on the planet when an accident happens. In earlier times there was almost an unspoken agreement between the media and the corporate world that a little leeway would be given to get a proper story together. In any event print deadlines usually ran on a 24-hour basis so there was some room to maneuver. There was also a well-understood iterative process that once the initial story was broken there would be an opportunity to update and correct facts in second and later editions.

How times have changed and with such rapidity. Now not only is an accident likely to hit social media within minutes, but there will also more than likely be a video or photos of the incident on the internet. When a TransAsia ATR-72 plunged into the Keelung River in Taipei, multiple dashboard cameras were running and recording. Images and videos were both uploaded on news-sharing sites, YouTube, and Twitter within minutes. Today the challenge of being able to respond appropriately to a major crisis extremely quickly (and just as importantly, appropriately) is an issue for the CEO of every large corporation in the world. If the CEO or the Corporate Communications team isn’t well prepared or misfires, the business is immediately placed on the back foot. This critical loss of initiative is irrecoverable in almost every case. The void will be filled on Tiktok, Facebook, Instagram, Twitter, Reddit, and every other outlet before the Corporate Communications team has time to take a breath. Then it’s all about “catch up” and any chance of storyline ownership is permanently lost.

Next time, we will explore how to manage the constant change of reputation risk online during a crisis. The skill sets required for a CEO to successfully navigate such crises have changed forever. It is critically important for the organization to address this fact, or risk catastrophic failure.