Most businesses entered the coronavirus crisis with a false sense of confidence in how prepared they were to handle a major crisis. Sure, they might have learned better. But how long will those lessons stick? A good way to tell is by figuring out whether and how often your clients are exercising their crisis response plans and scenarios.
Even before the pandemic, perceived crisis preparedness far outstripped actual crisis preparedness. For instance, the 2018 Deloitte study, Stronger, fitter, better: Crisis management for the resilient enterprise, found that 70 percent of organisations were confident in their ability to respond to a natural disaster. Turns out, though, only 33 percent had conducted a crisis simulation exercise in the previous three years. For terrorist attacks, 60 percent of organisations expressed confidence in their preparedness, but only 16 percent had exercised response plans. For corporate scandals, 88 percent felt confident, but only 17 percent had run a simulation.
Why did it matter? You guessed it, when crisis plans weren’t rehearsed previously, the eventual crisis response was slow, uneven, often ineffective.
Slow crisis responses, in particular, are no longer acceptable in today’s world. Indeed, a 2013 survey by international law firm Freshfields Bruckhaus Deringer found that in 28 percent of cases, news of a corporate crisis spread internationally within just an hour – numbers which have only increased since. On the other hand, it took companies an average of 21 hours to issue a meaningful external communication.
For your clients, then, exercising their crisis management plans through simulations would serve to accelerate the crisis response. Your client’s crisis management teams would have the opportunity to coordinate ahead of time. And their rank-and-file employees would also have a chance to become more familiar with the procedures they would need to execute in the event of a crisis.
So, what preparedness measures matter? The data shows that both regular tabletop exercises, where crisis managers present teams with a scenario and everyone then discusses what they would do in the response, and crisis plan simulations, which take the form of a drill to practice what everyone would do, can both be effective in improving response speed and efficiency.
The benefits of crisis plan simulations go beyond speed, though. Need help coaxing your clients to institute a rigorous exercise management program within the crisis management competency? We suggest making the following three points:
- Crisis simulations encourage collaboration. In day-to-day operations, department heads are focused on running their teams. During a crisis, however, these leaders need to work together closely. A crisis simulation gives those different leaders and their business units the chance to connect directly and discuss the implications of a given crisis.
- Crisis simulations improve the quality of crisis management plans. Effective crisis managers set goals for their simulations. That way the team can compare the results of the simulation to the goals set beforehand during a post-exercise review. Gaps between results and goals are analysed. And those learnings get plugged back into the underlying plan.
- Crisis simulations help your clients keep up with business and regulatory changes. Your clients are always changing. They may be hiring new employees, expanding into new markets, or developing new products or services. Regulations, which are often relevant to crisis response, are constantly evolving, as well. Those changes often create the need for updated crisis plans, and those updated plans will then need to be tested through a simulation.
Finally, failure to test is a persistent challenge to effective crisis response. By enabling your clients to conduct routine exercises, crisis management software with robust exercise management functionality, or test capability, can help, however. The key, though, is understanding which other end-to-end crisis management capabilities your clients will need, as well. To learn more, download our buyer’s guide to crisis management software.