A corporate crisis can strike at any moment, in any location. Indeed, a crisis relates to an incident, human or natural, that requires urgent attention or action to protect life, property, environment or reputation.
In the age of digital media, it can be business as usual one day and, without prior warning, the following day an international corporate crisis can be in full swing. With an almost immediate news cycle these days, increased scrutiny and the high expectations of consumers and company stakeholders alike, such a crisis can transform an international company’s reputation overnight.
Every organisation, irrespective of where it is situated, is different and faces unique risks to its capability to function. How well a business emerges from a corporate crisis is not related to where it is located on the map, but is usually reflective of preparations and the execution of a well thought out crisis management plan.
When developing a crisis and recovery management plan across borders, there are four fundamental phases to consider:
- Planning: There is no excuse not to and the rewards are significant
Some markets are inherently riskier than others and conducting a crisis management audit of each site is the first port of call to assess the organisation’s capability to respond to and recover from a crisis. For example, it would seem prudent to consider a continuity plan in the event of an earthquake for Japanese operations. Equally, operations that include manufacturing capabilities will have a very different risk profile to office-based sales and marketing teams.
Once the risk profile of a site is understood, effective crisis and recovery management requires a plan.
The plan is a ‘living’ document, meaning it should be regularly reviewed and updated and include as a minimum:
- instructions for activating the plan effectively
- contact details for a crisis team and crisis media spokesperson
- contingencies in the event members of the team are incapacitated
- the roles and responsibilities for each crisis team member
- predetermined performance benchmarks for external support services such as a call centre or distribution centre
- company policies and instructions to manage monitoring tools, media and local online properties
- specific market considerations such as relevant regulatory requirements
When developing a plan and nominating the crisis team and spokespeople in each market, remember to consider language, as different audiences, both internal and external, may have varying requirements.
- Training: Putting the planning into practice
Once a suitable crisis and recovery management plan is established in all sites, it is important to ensure those with responsibilities identified in that plan are capable of performing their duties. Where necessary, incorporate regular training sessions to fill any capability gaps. These sessions should be tailored for each country to address local risk factors, such as local regulatory procedures, social media protocols, compliance issues and safety procedures. The media is also unique in every market, so it makes sense to ensure the local spokesperson is trained to get the organisation’s key messages across effectively.
- Exercise: Test and review the processes
Each site’s capability to respond to a crisis situation should be regularly tested and reviewed. The organisation should assess performance criteria for incident preparedness and achieving operational continuity at each site and tailor an appropriate management system for it.
One way to do this is to facilitate a simulation exercise, which is an incredibly effective method to test how things will be managed in a real-life situation. Depending on an organisation’s size and budget, simulations can be desktop exercises or full-scale emergency scenarios in conjunction with local emergency services. Each simulation should involve a typical local scenario based on the risk profile of the site. As language, operational procedures and regulatory requirements will vary from market to market, it is important to ensure each simulation is tailored accordingly. This will add to the cost, but it will ensure a realistic simulation and an effective outcome in terms of preparedness.
- Managing the crisis: As it happens
Once the crisis and continuity plan is activated, it is up to the crisis team leader to decide the extent to which the crisis team needs to meet and where. When the crisis is underway, there are four key stages:
- Information gathering and assessing the crisis situation is the first phase. This intelligence is needed to evaluate the impact of what has happened and coordinate the next steps appropriately.
- The second stage is decision making – how the issue will be handled, what key actions need to be taken and how the information is going to be communicated both internally and externally.
- Communicating crisis-specific messages for internal and external stakeholders is the next phase and, when doing so, it is important to ensure that all messaging that is communicated is clear and concise.
- Monitoring is a fundamental component of crisis management. Consider activating monitoring tools and specialists to observe media and stakeholder discussions about the issue and evaluate what impact the crisis has had on the organisation’s corporate reputation.
It would be naïve for management to think that a crisis will not happen to them or their organisation and it is important to remember that a crisis is not over until management decide it is over. Once a global issue is underway, they will need to assess how it is impacting each country, as again it will vary. The most important consideration is to be able to evaluate how each market has managed the issue and to feel confident that it was done so with the highest level of integrity.
Barry Thomas is the vice president and Asia Pacific managing director of Cook Australia. Barry has more than two decades of international leadership and expertise in the pharmaceutical and medical device industries and he currently spearheads the world’s fastest growing region for Cook Medical. His current position sees him working to expand the opportunities for people in Asia to access Cook Medical’s advanced and minimally invasive medical devices.