The custom of political leaders showing up in disaster zones is relatively modern. Formerly, disaster response proceeded with little input from federal agencies (generally) and heads of government (specifically). Instead, they were almost entirely state and local government as well as non-governmental agency interventions.
In this modern, heavily mediatized age, we’ve become painfully familiar with the most common, crisis communications gaffes: the public announcements that are quickly back tracked; the press conferences more notable for the (mis)behavior of officials than the content of the statements made; and the live interviews of angry families deriding a lack of candor and communication from officials.
Natural disasters are growing in kind, cost, and intensity. We see evidence of it all the time. Having recently lived in California, I experienced back-to-back cataclysmic wildfire seasons – last year’s North California season left air in the Bay Area so smoke-laden that it ranked among the dirtiest in the world. And now, my home state of New South Wales faces the same scenario, a longer, more intense bush firefighting season, already on track to be the worst in decades.
Eighty-four percent of organisations have a crisis management plan in place according to Deloitte’s global crisis survey, “Stronger, fitter, better.” Unfortunately, they don’t test those plans regularly.
Critical events have become increasingly disruptive facts of corporate life. A recent Forrester report documented that all companies experienced a critical event in the last two years. In fact, many dealt with multiple incidents, the average being more than four discrete critical events in a two-year period.
We’ve said it time and again, but comprehensive, crisis management planning, while essential, is only the first step towards crisis preparedness. No matter how brilliant, dynamic, or intuitive your crisis plan is, when the time comes to execute, staff still needs to be comfortable performing assigned tasks. And that entails, regular training in crisis-like conditions. How, then, to create those conditions?
Over the last few years, companies have taken major steps to get their crisis preparedness house(s) in order. For instance, the 2016 Institute of Crisis Management (ICM) Annual Crisis Report found that only half of all global organizations had crisis management plans in place. Fast forward to this year, when Deloitte released the findings of its global survey of 500 crisis management executives. That study, “Stronger, fitter, better: Crisis management for the resilient enterprise,” showed that no less than 84 percent of companies had crisis management plans in place. Not the same sample set, to be sure, but still a major jump in crisis management preparedness. But though companies seem to have cottoned on completely to the crisis threat, they’re not out of the woods quite yet. That’s because the reality of crisis is completely different than the ersatz version you’ll find in crisis plans and simulations.
When compliance aims drive your crisis planning, they do so to your detriment. I know, sounds a little counter-intuitive, especially when regulators mandate that businesses prepare emergency plans for the workplace.
It’s December, and the new year approaches. But before we usher in 2019, let’s take a look back on the year in corporate crisis.
The crisis threat is here – most likely to stay. According to the ODM Group, nearly 80% of business leaders think their companies are only a year away from crisis. They’ve good reason to: roughly four in five Crisis Management, Business Continuity, and Risk executives have had to mobilize their teams at least once in the past two years.
For retailers, the holiday season means big bucks. Last year's, the most robust in a decade, saw sales top $690 billion in the U.S. alone. Add in European sales, and that figure jumps up to one trillion dollars.
California is ablaze. Northern California’s Camp Fire has already become the deadliest in the state’s history. The Woolsey fire, rampaging through heavily-populated Los Angeles and Ventura counties, is comparable in size to the city of Denver. For crisis leaders, it’s past time to dust of those corporate crisis plans and get serious about severe weather preparedness.
With a couple of tweets – how else? – President Trump inserted himself directly into the California wildfire crisis, blaming “poor forest management” as the cause of the “massive, deadly, and costly forest fires” and threatening, for good measure, to pull funding (presumably for federal firefighting assistance).
If your organization has a crisis communication plan, your team has probably thought long and hard about what you’ll say, to whom, and through what channels. If your organization, like nearly half of those surveyed by Nasdaq, has no crisis communication playbook, these are key questions to explore.[i] But whether your crisis team is revising the plan or building one now, remember that communication is not just about what you say. It’s also about listening to stakeholders.
Show me an executive who thinks they’ve got crisis leadership down pat, and I’ll show you someone who doesn’t have the first clue about the nature of crisis. That’s right. Crisis is nothing like you think. Of unusual-and I mean unusual-frequency and impact, a crisis, especially novel crisis, forces business leaders to take decisive steps to respond to challenges they’ve probably never confronted, without understanding the provenance of the crisis in the first place or the longer-term consequences of the crisis intervention they’re about to take.
How much did corporate reputations slump during the financial crisis? A lot, at least according to industry actors at the time. For instance, when polled in 2009, 85 percent of executives agreed that the public’s trust in business had diminished.
GDPR has officially been on the books for a few months now. So what do the new regulations mean for the world of finance?
Cyber-criminals are unrelenting
The numbers in last month’s Facebook data breach were big. All told, 30 million accounts were potentially affected, with hackers stealing personal information from 14 million Facebook users. But, as big as those numbers are, the data breach is actually part of an even larger story: it’s a stark reminder, if ever we needed it, that cyber-criminals are waging a never-ending battle.
When it comes to data breaches, no sector is more vulnerable than retail – that includes finance, insurance, and hospitality. In the U.S. alone, 75 percent of retailers have experienced some form of data breach since opening. A whopping 50 percent of retailers experienced a breach just last year. And that’s up from 19 percent the year before – a staggering year-on-year increase.
Let’s face facts. Features only improve products when actual customers use them. Too often well-intentioned features create more complexity than value. That’s never more so the case than when those features are introduced with cumbersome design elements, which users need to wade through in order to get where they need to go. After all, users are humans. And there’s only so much design stimuli we can absorb at any one time.
Team-driven operational planning is the key to most successful incident response efforts, even severe weather emergency response. For instance, the people on your school’s severe weather emergency response team will be the ones helping you craft, implement, and refine your plan. Here’re some tips to help you choose wisely:
Tesla CEO Elon Musk is grabbing headlines for his tweets—one of which even set in motion an investigation by the U.S. Securities and Exchange Commission—and for smoking marijuana in a video interview with stand-up comedian Joe Rogan.
In the words of former White House energy and climate change tsar, Carol Browner, the Deepwater Horizon oil spill was the worst environmental disaster the U.S. has had to face. The toll of the disaster is indeed difficult to comprehend. For nearly three months, more than four million barrels of oil leaked into the Gulf of Mexico, the equivalent of multiple Exxon Valdez spills. And as to the length of shoreline oiled, scientists at the U.S. National Oceanic and Atmospheric Administration found oil along 1,313 miles of ecologically-sensitive Gulf coast.
Selling goods on the market? Then you know the product recall threat can’t be understated. Defective products are already a leading cause of liability loss, according to insurance giant, Allianz. And the overall toll of consumer goods incidents to (just) the U.S. economy: $1 trillion plus per year. You can’t make this stuff up.
Businesses aren’t playing around, waiting for crisis. At least, not any more. As the crisis threat grows in kind and intensity, organizations in all major industries have taken notice. Now, some 80 percent of business leaders believe that their organizations are only a year away from a potential crisis.
Building or updating your school emergency lockdown plan? Smart move. As you probably know, during the first half of the year, the US averaged over one active school shooting incident per week. What’s more, the number of bomb threats also seems to be rising. The need for school emergency lockdown planning has never been greater.
As students of all ages head back to school this fall, one topic on administrators’ minds will be school safety, and that means preparing for the possibility of an active shooter on campus.
And preparation is becoming more important. There were 30 percent more school shootings in the U.S. during the 2017-2018 school year than in 2016-2017, and the number of guns found on campus soared by 267 percent, according to a new report from the nonprofit Educator’s School Safety Network (ESSN). The report also says that during a crisis, teachers and school administrators are often the first first responders, and if they’re not prepared, everyone is more vulnerable.
So how can schools respond effectively to an active shooter incident? We offer three key ways.
One of the great unknowns, severe weather happens everywhere, at any time, causing untold devastation often with little to no advanced warning.
In some contexts, like when you’re making a Rotisserie chicken, the impulse to “set it, and forget it” makes sense. It’s been market tested, after all. In other domains, like crisis preparedness, the “set it, and forget it” instinct only leads to long-term ruin. So why then do so many teams fall prey?
How big have chat apps gotten? Just look at the data. Survey findings show that three quarters of us now prefer using chat to other forms of electronic communication. In concrete numbers, the biggest free messaging services, WhatsApp, WeChat, and Facebook Messenger, have around a billion active users apiece. And those users aren’t just in a couple of high-income countries. WhatsApp and Messenger users, in particular, are pretty spread out across advanced and emerging markets.
They’ve done it. Your company has finally made that investment in crisis management planning. You’re one of the point people tasked with creating a crisis management plan.
What matters in your crisis preparation efforts? Well, understanding the stages of crisis management, for starters. Those, of course, include pre-crisis, crisis response, and post-crisis recovery. It’s during the vital pre-crisis stage that your crisis management team will undertake the bulk of its crisis management planning, putting in place the processes and procedures to deal with the effects of disruptive incidents.
Tragically, school shootings have become the norm. During the first five months of 2018, the U.S. averaged more than one school shooting per week, according to CNN.
You’ve heard it before, failing to plan is planning to fail. But the question is: why then do so few companies actually plan for crisis, especially when post-crisis post mortems tend to reveal that crises, while often unforeseen, could usually be avoided?
Perhaps you’ve noticed, but under stress, you’re not exactly making the best decisions. Don’t worry, it’s not just you. A chorus of researchers in the fields of psychology, sociology, and neuroscience all agree that stress hurts our decision making capabilities, because it changes the way our brain works. It’s just chemical.
On the heels of our Noggin Crisis app launch, we have more good news. Noggin is thrilled to announce that we are working with Deloitte Australia, one of Australia’s leading professional services firms, to help organizations plan, practice, and prepare for crisis.
What are crisis management plans and why do you need them?
Frankly, the evidence is frightening. Sure, companies no longer feel they are immune to crisis. But they are doing precious little to prepare for the eventuality of likely crises in their industries. What should companies be doing? It’s called crisis management planning, i.e. proactively assessing and addressing vulnerabilities to avoid or minimize the impact of crises.
Why the differences matter
Even though crisis has fast become a fact of corporate life, too many organizations still think they’re immune. Case in point: nearly a third of companies have no crisis management plan in place. That is despite the unmistakable risks associated with crisis: harm to stakeholders, losses to the organization, or even business extinction. Why would companies take the risk?
How to structure your Crisis Management Team (CMT), and what you should consider
You’ve just seen a competitor thrown into crisis, or maybe you’ve only barely weathered your own. Either way, now you’re convinced, more than ever, that you need a full-fledged crisis management function at your own business. It’s finally time to get started. The only question remains, who serves on the crisis management team?
Ask anyone about it, and they’ll say that making important business decisions is difficult – even for so-called natural leaders. It’s not that much of a mystery why. Even in normal times, decision making, as you can imagine, triggers stress. As for making decisions during crisis, forget about it! Those bonafide stressful moments are almost tailormade to hinder effective decision making. That’s because during them, there’re so many factors conspiring to make decision making a lot harder, because more irrational. Yes, irrational. Buckle up, folks; we’re quickly entering the realm of decision derailers.
We’re just over halfway through the year, and already 2018 has been chockfull (to bursting) with some of the worst public relations crises in recent memory. We thought we’d document the worst of the worst; but boy was it hard to choose. So in no particular order, here are the top eight public crises of the year, because you know, “eight rhymes with great”:
By now, you’re probably past questioning whether a corporate reputation management function makes sense for your firm. After all, seven out of ten crisis-experienced board members say it takes anywhere from one to five years to recover from a reputational crisis.
Airporters of the world! We’re only a few days away from the Third Annual British-Irish Airports Expo, the singular event where suppliers and providers showcase their latest cutting-edge solutions and industry-propelling concepts. We’re excited to announce that Noggin will be there too, bringing the latest in crisis management technology, Noggin Crisis, across the pond to London and right into the airport space.
If you’re not in Marketing, you might have missed this stat. But according to researchers, a staggering 80 percent of adults are at least somewhat more likely to consider buying products and services recommended by friends, family, and authentic online consumers.
Think stress clouds your judgment and impairs decision making? Sorry, but if you’re not a neuroscientist, sociologist, or psychiatrist, you don’t even know the half of it. We're not any of those things, but we thought it would be worthwhile to dig into some of the research in the field. We want to share some of the findings, because they’re of particular interest to crisis management practitioners out there.
It’s not uncommon to hear senior business leaders refer to brand and reputation as if they were one and the same. Sure, there’re plenty of similarities. But there’re even more fundamental differences, such that mistaking the two distinct concepts can get your business into a lot of trouble.
The origins of the ongoing AT&T pay-for-play crisis reach back to October 2016. It was then, during the last weeks of the U.S. presidential election, that AT&T, the nation’s second-largest wireless provider and third-largest home internet provider, announced that it would be acquiring Time Warner, the world’s third-largest media conglomerate after Comcast and the Walt Disney Company.
When you ask around, people tend to know what bad business decisions look like – the botched product launch, the acquisition that went pear shaped, the bad hire, the list goes on. What’s more, upon reflection, people tend to understand the factors that contributed to those bad decisions. As a rule, we tend to scrutinize our mistakes, sometimes more than we do our successes. Things aren’t that different in the crisis management context, where the post-mortem is built into the lifecycle. But although crisis teams all know what bad decisions look like, they can’t necessarily visualize effective crisis decision making. So we’re here to help, by expanding on a few signs of effective crisis decision making.
Don’t think that at any moment your organization is just seconds away from a major reputational crisis? Then you haven’t been paying attention recently. Even the most debonair, media-coached front man can land your company in crisis with a simple linguistic slip up. Case in point: Emmanuel Macron, the young, telegenic, highly charismatic president of France.
By all indications, the threat of corporate crisis keeps growing. For one, fines for corporations across all industries have risen, signaling that further financial crisis could be in the offing. Also, crisis-related media headlines involving the Forbes 100 are up 80 percent over the last decade. All of this points to the fact that crisis has become the new normal across diverse industries and markets. So what’s going on?
In search of a central cause of corporate crisis? Look no further than a lack of situational awareness, a systemic issue across industry. But for such an important concept, it’s not that well understood. And so here’s a primer on situational awareness that answers why exactly companies need to improve theirs.
Crisis can just as easily arise from a single devastating event, as it can from a series of unattended critical events. But either way it happens, crisis can present a serious threat to a business’s core objectives, reputation – even its viability. What’s more, crisis, once underway, doesn’t just burn bright, then suddenly extinguish. That’s because crisis is by definition multilayered and multidimensional. In order to properly prepare for, manage, and recover from crisis, companies need a strong crisis management function, one that anticipates crisis. So what’s the key – continuously improving your crisis management planning and preparedness through a crisis lifecycle management approach. Let’s dive in.
Hey, Risk professionals! Heading to RIMS 2018, the best place to enhance your knowledge of emerging risks, claims, and cyber risks? Well, we’ll be there too, making some pretty big news in Crisis Management.