Crisis Management 101By Mary Sedor
Article Date: 04-01-2008
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.
Don't panic - just plan. We walk you through the basics on how to prepare for any emergency situation.
In January, a disgruntled worker deleted a number of important files at the architecture firm where she worked, causing an estimated $2.5 million in damage because she saw what she thought was her job posted on Monster.com - it wasn't. Seven years worth of work were gone in seconds. All it takes is a few minutes - a fire rips through a building, a hurricane wipes out half a city, a cyberthief hacks into a computer system, or, heaven forbid, a violent crime or fatal accident occurs. Crisis can take a variety of forms, but businesses can protect lives and reduce the loss of property if they are prepared. From hurricanes and tornadoes to fire and flood, a crisis is basically any time that a company is taken by surprise by a situation. Crises can take many forms, including natural disasters; man-made situations; computer catastrophes; employee- or product-related issues; and denial of service. Since the event is a surprise, the company is then unprepared to deal with it - which is what escalates the event to a crisis. "The whole point of crisis planning is trying to prevent being taken by surprise by situations," said Ron Richard, PE, Ph.D., a crisis management expert and president of Arcanum Professional Services in Plainfield, Ind. What makes a crisis situation difficult is that there is pressure and everything is time compressed; the company resources are compressed, the public is curious and emotions are involved, says Prichard. "All of those things put intense pressure on a company," he said. "That's why people flounder in the time of crisis because they have five minutes to make a decision. It's when people come up with ad hoc solutions - because they haven't thought it out - that everything unravels very quickly. When people begin inventing on the fly, this is when they introduce confusion and chaos." Prichard contends that prevention is better than the cure."When you're in crisis there is nothing you can do to make it better, but you can sure make it worse," he said. "You can make it a lot worse if you mismanage it. The fastest way to mismanage it is to try to cover it up, conceal it or keep quiet. You can also make it worse if you prolong it by not having a plan to deal with it." The best place to start is to anticipate the kind of crises that could most adversely affect your business, and then make a plan in the event they occur."Crisis planning is really about saying we need to anticipate things, look into the future and project out in front of us about what kind of things could happen," he said. "If they do manifest themselves, how are we going to deal with them?" When Crisis Strikes The main objective of crisis planning is to get the business through to the other side, intact. Since it isn't easy to know every situation that will arise and potentially affect your company, it may seem impossible to know where to start. However, Prichard explains that future risk is both particular and local. For example, if a dealer is in Oklahoma, he wouldn't likely worry about hurricanes, but a tornado could hit one of his suppliers. Prichard recommends that dealers sit down and think about the kind of things that can happen not only to their own dealerships but to their suppliers and customers. The first tier of disaster planning is identifying the critical crises that directly affect a dealership, or if a dealer has branch locations, each location. The second tier is all of the people that a dealership interacts with. "This is where most organizations fall down," he said. "Everyone is so linked with other entities that we've forgotten we have these partners and that if they have a failure or crisis it could impact our ability to perform. Their lack of planning could turn into an emergency for us." When a crisis actually happens, the first step to dealing with it is recognizing it. The sooner you can detect the crisis event, the sooner you can implement your plan and the more likely your company is to come out on the other side intact, says Prichard. "Part of the process is that through the training that will flow out after you complete your plan, your people will be in a good position to act as early detectors," he said. The second step is to implement the communications plan. Alert the critical people in the organization of the crisis, what kind of crisis it is, and tell them which plan to implement. For instance, in the event of a tornado, the National Weather Service will issue a Tornado Warning, and each town will sound off its tornado siren. Once the siren has been sounded, it's time to go to the crisis plan and start implementing it. After the tornado, in the event the building gets knocked down or a fire is started, implement the emergency response plan, which includes notifying the proper authorities and triage for injured employees. At the same time, dealers should trigger their media response teams because the public will start asking questions, says Prichard. This media response team should be a group of people prepared to communicate with employees, clients, suppliers and explain what's happening, what the company is going to do and provide information on the situation, says Prichard. "It's critical to have a communicator because people will have questions," said Prichard. "If the media is involved, giving no response is worse than saying you'll give a press briefing in an hour. You want to control things as much as you can. You want someone to be proactively communicating, otherwise the press will believe you're trying to hide something and it only emboldens them to find out what you're hiding." While the dealership implements its emergency response and media communications plan, a disaster recovery plan should also be implemented. The disaster recovery plan should outline how the company will get back in business. Prichard explains that dealers should create a different disaster recovery plan tied to each one of their emergency responses. Prichard notes that doesn't mean you have to have a single, separate document for everything. For example, the evacuation plan for a tornado might be the same as for a flood, and the plan may only be one page long. However, he recommends dealers still have a plan for every possible scenario. A good crisis plan has been well-thought out, and includes back-up plans as well as contingency plans for not only your dealership but how the dealership will be affected should a supplier be faced with a crisis. In the end, at some point when the dealer has gotten through the crisis and everything is restored to normal, a dealer must tell customers and suppliers the crisis is over, says Prichard. Thinking about the Worst Prichard notes that business continuity is important to consider when executives craft their crisis plans. He cites an example of a client whose business grew from a one-truck operation to a multistate operation. As his business grew, he would fly from place to place in his helicopter. But tragically the business owner and his pilot were killed in a crash, and he had no succession plan. After the owner's death, there was an internal struggle to determine who would take control of the business. Some crisis situations are certainly preventable and in the area of servicing equipment at the dealership, unwavering attention to detail and uncompromised thoroughness and quality are absolute tenets that keep dealers out of disaster's way - mistakes cannot be an option. Another of Prichard's clients experienced a crisis after one of his customers' employees was using a telescoping boom lift. The worker was about 60 feet up when he started to extend the boom out and it came crashing down, killing the man in the lift. The company had just had the boom delivered that morning, and an investigation revealed that when the dealership did maintenance on the machine, technicians had failed to attach bolts to its swivel mechanism. Indeed, crises do come in all varieties.Finally, a company's IT data is another highly critical aspect to evaluate. Dealers should consider how much data they have, how often it should be backed up and how it is updated. Dealers should perhaps be backing up data every 15 or 30 minutes and store a backup of the data off site. Creating the PlanAccording to the Federal Emergency Management Agency (FEMA), the first step in establishing a crisis plan is to identify a planning team, ensuring participation from at least one person from all areas of the business. The planning team should review all internal documents, plans and policies, as well as meet with the appropriate outside emergency agencies. Other critical areas for the team to consider include identifying critical products, services and operations necessary, as well as internal resources. Plan ComponentsThe crisis plan should include the following basic components, according to FEMA.
Once the plan has been written and revised, it should be distributed to all employees, and any necessary employee training should be completed. Too Busy To PlanWhile many businesses say they don't have time to plan and can't keep up with it, Prichard recommends reviewing the plan at least once a year or whenever it's logical. For example, a business may only review its hurricane plan during hurricane season. "Businesses think it's too much work," said Prichard. "They need to sit down and think it out. Even if they aren't doing a formal plan they should draw up notes. And there are still certain things that need to be formalized." Prichard says crisis planning is especially important for small businesses because those without a plan tend to be the companies that don't reopen after a disaster. "Your plan doesn't have to be big and complicated if your business isn't big and complicated," he said. "Just because your business is smaller doesn't mean this is any less important; it just doesn't have to be as formal. But it is critical to business."
Executive Summary- The executive summary gives management a brief overview of the purpose of the plan; the facility's emergency management policy; authorities and responsibilities of key personnel; the types of emergencies that could occur; and where response operations will be managed.
Emergency Management Elements- This section of the plan briefly describes the facility's approach to the core elements of emergency management, which are:
Emergency Response Procedures- The procedures spell out how the facility will respond to emergencies. Whenever possible, develop them as a series of checklists that can be quickly accessed by senior management, department heads, response personnel and employees. Determine what actions are necessary to assess the situation, protect employees, customers, visitors, equipment, vital records and get the business back up and running.
Support Documents- The documents that could be needed in an emergency include emergency call lists, building and site maps and a resource list of all major resources needed in an emergency.
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