Are You at Crisis Readiness?

CRISES CAN BE FATAL: ARE YOU AT CRISIS READINESS?

… don’t be a bystander in your own company’s death

How you deal with a crisis facing your company is often critical to your company’s survival. The reality of experience however, shows that no matter how you deal with a crisis, the crisis will undoubtedly cause your company to inevitably pay a hefty price in loss of cash flow revenue, reduced longer term profitability and an accompanying loss of reputation & goodwill. It pays to be always at crisis readiness!

Warning: There is a considerable amount of information here concerning the actions you should take to reach crisis readiness so that you can mitigate the adverse effects of a hit from a crisis. I understand how important this information is to you when making up your mind as to who can best help you with the operational management of your business. Consequently, as the guide covers a lot of ground, expect a long read.

Necessity for Crisis Planning

Hello! and welcome.  This webpage is about a very sensitive issue that does not get the degree of attention that it deserves. In this webpage I will give you some helpful information and advice on crisis readiness because this is a subject of great concern and greater consequences

Crises come in many forms and guises. Crises generally strike quite unexpectedly. Most companies do not take the trouble to analyse the nature of the crises they could face from time to time, and consequently, those companies are always vulnerable to harm. The worst-case scenario? a crisis will mortally wound a company.

You need a crisis readiness plan. If you don’t have a crisis readiness plan ready for instant activation when a crisis suddenly attacks, Chiron! the business doctor.™ will do two things for you. Firstly, Chiron! the business doctor.™ will help you to identify key crises that potentially have the power to inflict great damage and harm to your company. Secondly, Chiron! the business doctor.™ will help you to develop and implement a crisis readiness strategy within your company to limit the damaging & harmful effects of a crisis to the highest degree possible in the circumstances.

Crisis Readiness: why you need to have a crisis readiness strategy

Crisis readiness! Don’t these very words conjure up a worrying picture of dire forebodings, tragic disasters, chilling anxiety and negative consequences? You bet they do. They do for good reason. They do because these are the likely outcomes when a crisis of major proportions strikes without warning – and history shows that crises of major proportions strike without warning pretty much all the time.

Just what is a crisis?

Crises defined. Before I get into the detail of how you should handle a crisis, it may be useful to explain or define what a crisis is from a corporate business perspective. After all, we are generally familiar what the term ‘crisis’ means when we talk about government, politics and international affairs. Within that area of human interaction, the inescapable fact is that a lot of our history has resulted from crises of one sort or another.

Crises in government, political or international affairs. Within the context of government, political or international affairs, a crisis is an unstable or apparently irreconcilable condition which cannot be permitted to persist indefinitely, but which is attempted to be resolved by decisive action by one or more of the parties involved in the circumstances. The action may or may not resolve the issues in contention.

Crises in corporate business affairs. From the corporate business perspective, the definition is a little different. A crisis is the arrival, generally unexpected, of a set of circumstances that, if not addressed promptly, has the capacity to cause financial ruin to a company. Consequently, crisis readiness concerns the steps that a company must take to resolve the crisis.

You will face a crisis. You will inevitably face a crisis, you just don’t know when. In a perfect world, companies would never have to face a crisis. Unfortunately, we don’t live in a perfect world. The reality therefore is that on the balance of probabilities, your company will undoubtedly face a crisis at some stage. The crisis will inevitably occur without warning. It is this element of surprise that makes crises difficult to predict and difficult to manage.

The key to crisis readiness

Control & mitigation. While we may not be able to predict when a crisis will happen, we can take proactive action to control and mitigate its adverse effects. This is the key to crisis readiness because a serious free-wheeling crisis has the capacity to render your company helpless and vulnerable with almost certain fatal consequences. Crisis readiness therefore helps to protect your company’s prosperity, success, public image and goodwill. In essence, crisis readiness is about ensuring your company’s survival, thus ensuring continued protection of your employees, customers, clients and suppliers.

Crisis readiness, sometimes called crisis management, defined

The United States Institute of Crisis Management in Louisville, Kentucky defines a crisis in general terms as ‘a significant business disruption which stimulates extensive news media coverage. The resulting public scrutiny will affect the organisation’s normal operations and also could have a political, financial and governmental impact on its business’. The Institute of Crisis Management groups crises into two categories:

The first category is defined as Sudden Crisis: ‘Sudden Crisis is a disruption in the company’s business which occurs without warning and is likely to generate news coverage and may adversely impact employees, investors, customers, suppliers and other publics’.

The second category is defined as Smouldering Crisis: ‘Smouldering Crisis is any serious business problem which is not generally known within or without the company, which may generate negative news coverage if or when it becomes public knowledge and could result in more than a predetermined amount in fines, penalties, legal damage awards, unbudgeted expenses and other costs’.

Here’s a few examples of crises (please note that they are not listed in any order of priority,  importance or frequency)

  • The unauthorised disclosure of confidential and sensitive information which, if published, will create grave difficulties for the continued viability of your company.
  • The discovery of problems with internal security systems and procedures that result in the possible or actual leak of confidential and sensitive information about your company to unauthorised persons including the press.
  • Extortion and blackmail threats based on the actual or threatened tampering with malicious intent of your company’s products on retailers’ shelves that can have adverse medical or health consequences for customers if the tampered product is used.
  • Extortion and blackmail threats based on the actual or threatened disclosure of confidential and sensitive information about your company, your directors or your senior managers gained through industrial espionage activities.
  • The unauthorised and/or unexpected discharge by your company of toxic or hazardous materials into the environment.
  • Natural disasters or weather events that disrupt your company’s trading operations for an extended period of time and/or endanger the lives and health of your employees.
  • Industrial strikes and other forms of work limitation that disrupt your company’s trading operations for an extended period of time.
  • The malfunction, either by simple breakdown or sabotage, of machinery or equipment essential to the conduct of your company’s trading operations.
  • Directors and/or senior managers becoming involved in scandalous or unlawful conduct (such as accusations of improper or unusual sexual relationships).

In a crisis, you will experience serious disruption and adverse consequences

If a crisis occurs, prepare for serious disruption that will adversely affect:

  • your company’s day to day business operations and functional activities,
  • your company’s cash flow and profitability,
  • your company’s share price and share value,
  • your company’s reputation, which, in the longer term, may adversely, affect your company’s goodwill as a balance sheet asset.

Be crisis ready. Consequently, to limit the damage that a crisis could inflict on your company, you need to have a comprehensive crisis readiness plan that is based on a practical crisis readiness strategy. Here is where I come in. As an independent and neutral consultant, I can help you develop a comprehensive crisis readiness plan.

Crisis readiness planning

Test your crisis readiness often. I am sure that you will have realised by now that the only way to cope effectively with a crisis is to prepare and implement a formal crisis readiness plan. This is essential.  What is more essential however, once you have a crisis readiness plan, is to test it. Not once, I might add, but very regularly. Continuous testing is vital because your crisis readiness plan will be implemented by crisis readiness teams, each of which must become expert in dealing with particular groups of crises.

Crisis response teams. Yes, you will need to have a number of crisis response teams within your crisis readiness plan. This is the reality of having to be ready to deal with a very diverse range of crises. The diverse nature of crises and their adverse effects are such that it will be unlikely that a single team will be able to incorporate all the skills required to deal with the crisis.

Crisis readiness planning: what to do next

Action time. You have considered this matter in detail and now want to  proactively  implement a crisis readiness plan for your company. May I sincerely commend you for that decision. Your decision clearly shows a mature understanding of the unique characteristics of crises. That is, you never know when one will strike. You never know how serious the crisis that does strike will be and you never know whether the effect of the crisis could mortally wound your company, a fatal consequence of not adequately responding to the crisis.

For your own protection, you must get a crisis readiness plan: the time to act is now!

No one wants a crisis.  There is no doubting the fact that no one wants to face a crisis. There is also no doubting the fact that sooner or later most companies, yours included, will face a crisis. From the information I have set out above, you must now realise that there are very serious consequences arising from crises. You must now also realise that I can help you to prepare and implement a crisis readiness plan. As I said earlier, helping you in situations like this is what I do. It’s what I am in business for.

A crisis readiness plan is crucial. The need for a crisis readiness plan is therefore a crucial imperative for you. After all, a crisis that is mismanaged can, in a flash, completely undo your company’s years of business prosperity, success, community goodwill and public image. That is a completely unacceptable position for your company to be in. No one likes to be helpless in a crisis but unfortunately crises are an inevitable part of business life. And because they strike without warning, you are vulnerable to real economic harm.

Your next move. I know that you do not wish to be helpless when a crisis strikes, so perhaps now is the right time for you to telephone me on (+61) 0404 631 230 for a confidential, no-obligation discussion. I would be delighted to receive a call from you.

Don’t delay; time is precious. Can you see how your company can benefit from my help in establishing an effective crisis readiness plan? Remember, you could be facing a crisis as soon as tomorrow, next week, or next month. You have no way of knowing when the dice will roll. Moreover, in dealing with crises (whether or not you have a crisis readiness plan), time is of the essence. Time is a very precious commodity when facing a crisis and it is always in short supply. So please don’t delay in calling me to start the process leading to an effective crisis readiness plan.

Please note this personal limitation. As a sole-practitioner, I simply cannot accept every assignment I receive. There are unfortunately not enough hours in each day. That’s why, if you can see the advantages of you and me working together to prepare an effective crisis readiness plan, you must call me without delay on (+61) 0404 631 230. For fairness, I must operate on the ‘first up, best dressed’ principle. Why not call me now, this minute, and go for it!

Yours sincerely,

Graham  Segal

Chiron! the business doctor.™ ... relieves business pain!™ 

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© Graham Segal, Author. March 2013. All Rights Reserved

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This website and the associated webpages content are produced by Graham Segal trading as Chiron! the business doctor.™. They are licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License based on Graham's work at http://chironthebusinessdoctor.com.

Date this webpage was last reviewed/updated: 23 May 2013

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