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Crisis and Crisis Management

By supersaadi Oct 16, 2010 2695 Words
CRISIS AND CRISIS MANAGEMENT

The study of crisis and crisis management is a very vibrant field within public relations. There is a strong imperative for understanding crises and crisis management. All organizations should realize they are vulnerable to crises so they must prepare for the eventuality. Once management realizes crises are possible, it must grapple with what a crisis is and what constitutes crisis management.

A crisis can be defined as "an unpredictable, major threat that can have a negative effect on the organization, industry, or stakeholders" (Coombs, 1999, p. 2). This definition is derived from a synthesis of other crisis definitions and presents the three critical features of a crisis. First, a crisis cannot be predicted but it can be expected. Crisis managers know a crisis will hit but cannot say exactly when-a crisis is unpredictable. Second, a major threat has the potential to disrupt organizational operations in some way. A crisis might close a production line or require inventorying the return of defective products. This does not mean operations are always disrupted, just that the potential exists. Quick actions by the crisis management team can prevent the crisis from fulfilling its disruptive potential. Thierry Pauchant and Ian Mitroff (1992) called smaller problems "incidents." Incidents are fairly easy to cope with and will not disrupt the organizational routine. Third, the crisis can threaten the organization, the industry, or the stakeholders. The crisis can harm any or all three of these entities. Consider an explosion at a petroleum processing facility that kills three workers. The organization may be shut down for repairs and loss of production time. The safety of the entire industry may come under scrutiny because of the publicity and investigation surrounding a high-profile accident. Nearby residents may have been evacuated after the explosion as a precaution against hazardous chemicals while customers may experience an increase in price as production levels drop.

A crisis extends over a period of time. Steven Fink (1986) described a four-step life cycle for a crisis: (1) prodromal, where warning signs appear before a crisis hits; (2) crisis breakout or acute, where the trigger event occurs or what we typically think of as the crisis happening; (3) chronic, the time it takes to attend to the damage and disruption from the crisis; and (4) resolution, in which there is evidence that the crisis is over and no longer a factor with stakeholders. Fink's work helped people to realize there is more to crisis management than simply reacting to the crisis. Crisis management could be much more proactive by attempting to prevent crises.

Crisis management is "a set of factors designed to combat crises and lessen the actual damage inflicted by a crisis" (Coombs, 1999, p. 4). Crisis management often is mistakenly equated with having a crisis management plan. Crisis management is a complex set of factors that unfold in four stages: prevention, preparation, response, and learning. The stages of crisis management were influenced by work in disaster management and Fink's life cycle of a crisis.

Crisis management begins with prevention or mitigation. Prevention seeks to identify the various risks an organization faces. A risk is a potential threat that could escalate into a crisis. Risks include weather threats, worker error or violence, and technology failures. Prevention involves attempts to identify and to mitigate the risks. Identification involves locating potential sources of risk-the organization scans for risks that could trigger a crisis.

Mitigation tries to eliminate or reduce the risks. Some risks can be eliminated. For instance, an organization uses a hazardous chemical in its production process. The presence of a hazardous chemical presents the risks of a hazardous chemical release. The risk of a hazardous chemical can be eliminated if the organization can find a nonhazardous chemical to replace the hazardous one it uses.

Most risks cannot be eliminated. For instance, workers can always make mistakes or become violent. Training and monitoring can be used to reduce the risks that cannot be eliminated. Prevention and mitigation reinforce the need for crisis management. Managers begin to realize what can go wrong in their organization and that they cannot stop many of the risks.

Preparation means the organization is getting ready for a crisis because management realizes one might occur. Preparation is what many people in organizations think about when the term _crisis management_ is used. The essential elements of preparation are a crisis management plan, a crisis management team, and practicing the crisis management plan. The crisis management plan is an outline for the organization to respond to the crisis. The value of the crisis management plan lies in the preassignment of responsibilities and precollection of critical information. Time is saved during a crisis when people already know what they are supposed to do. Time is not lost in deciding who should do what. Critical contact names and methods of contact have been collected so that time is not lost later on. The key to a useful crisis management plan is not making it too detailed or too thick. A crisis management plan must be adapted because each crisis is unique and a plan cannot cover all contingencies. A crisis management plan will include the names of members of the crisis management team and their contact information, key people or groups that may be useful during a crisis and their contact information, and forms to remind crisis team members of what to do, such as "logging" and responding to outside inquiries about the crisis or documenting actions taken to address the crisis.

To develop a crisis management plan, managers must revisit their identification of risks. The managers perform a crisis vulnerability analysis to determine which types of crises they are most likely to face; the risk analysis will indicate what crises are likely to emerge. Management tailors the crisis management plan to fit the most likely crises. Again, the crisis management plan must be flexible because it is a living document. A crisis management plan should be revised at least once a year. During the course of a year, the composition of the team may change, key contacts may change jobs, and the crisis vulnerability may change. An out-of-date plan is of no value because the advantages derived from saving time are lost.

The crisis management team comprises those people who will enact the crisis management plan and address the crisis. The crisis management team is cross-functional, meaning it is composed of people from different sectors of the organization. On the team you want the best mix of knowledge and skills for handling a crisis. Typical crisis team membership includes legal, operations, public relations, facilities management, and security. Legal expertise is required to ensure that the words and actions of the team do not increase the legal liabilities of the organization. Operations personnel know detailed information about the production process. The crisis may raise questions about the production process, so their expertise is important. Public relations personnel are viewed as skilled in media relations. This is important when media inquiries about the crisis occur. A crisis can raise questions about the structure or layouts of a facility. Facilities management will have the knowledge to answer these questions. Security personnel are often the first to learn of a crisis and to reach the crisis scene. They may have firsthand information about the event. Security must also coordinate its efforts with emergency responders such as fire and medical teams.

Having a crisis management plan and a crisis management team is pointless if the two are never tested. The Federal Emergency Management Agency (FEMA) is the strongest advocate of practicing crisis management plans. Only by practicing a crisis management plan can management be sure that there are no large holes in the plan (e.g., important contacts were not included), there are no mistakes in the plan (e.g., a wrong phone number or radio frequency), and that the crisis team members can work together effectively. A crisis simulation tests the plan and the team members. It is possible that some team members will not be able to handle the stress of crisis management and will need to be replaced. It is recommended that an organization practice its crisis management plan once or twice a year. Regular practice helps new members of the team get up to speed and tests any modifications made to the crisis management plan. Practice is costly because people must take a day or two away from their jobs to be part of the crisis management test. However, without testing, an organization does not know if it has a functional crisis management plan or a functional crisis management team.

Response is the actual reaction once a crisis does hit. The response encompasses what the crisis management team says and does to handle the crisis. Preparation makes the response more effective if the organization has practiced. The crisis management team faces physical and informational demands. The physical demands include addressing the damage from the crisis. Examples include injured people in need of treatment, evacuating people at risk, containing and suppressing fires, reinforcing buildings with structural damage, and salvaging equipment. The crisis management team will be coordinating its efforts with the business continuity team. The business continuity team is charged with keeping an organization functioning during a crisis or returning an organization to regular functioning as soon as possible. Business continuity teams might use alternative facilities, rented equipment, or temporary staff to help maintain an organization's ability to function. It is important that the crisis management and business continuity teams work in concert to prevent redundant actions or interference with one another.

When a crisis hits, an information vacuum is created. Stakeholders and people in the organization do not know what happened but want to know. The crisis management team collects information to discover what happened. The crisis management team is responsible for collecting and disseminating information to various stakeholders. The crisis management team is trying to find out basic information about the crisis: what happened, what was the cause, who was or might be affected, where did it occur, and how much damage was sustained. This information is necessary to help make decisions about the physical response. For instance, a crisis team must know what is in a gas cloud created by an accident and where the gas cloud will travel before determining if an evacuation is necessary and who should be evacuated. Stakeholders will contact the organization to get information. The news media, people living near the facility, suppliers, clients, and government officials all might contact the organization to get information about the crisis. The crisis management plan helps to coordinate the collection and dissemination of crisis information.

Crisis management does not end when the crisis ends. There are three key activities that must transpire after the crisis, that is, monitor and cooperate with investigations, update stakeholders, and evaluate the crisis management effort. Many crises, such as airline accidents and chemical accidents, take time to investigate to determine their cause. The crisis management team must help investigators, typically some government agency, and keep abreast of any findings. Reporting results of investigations is one of the points that would be communicated to stakeholders in updates. Updates also include any other information that the crisis team promised to deliver to the stakeholders during the crisis. For example, an explosion at a plastic manufacturing facility halts production at that site. The crisis team promises to inform employees and the community about the cause of the accident and any corrective measures. The crisis team must also inform customers when the facility will be operational again. Once the investigation determines the cause of the accident, the crisis team can tell employees and community members why the crisis occurred and what actions can be taken to prevent a repeat of the crisis. Similarly, the crisis team can update customers as to when the facility will be operational once that has been determined.

Experts agree that the best learning experience for crisis management is a real crisis. Therefore, an organization must do all it can to learn from its own crisis experience. To learn from a crisis, the crisis management efforts must be carefully evaluated. The careful postcrisis analysis is called a _postmortem_. A postmortem is a systematic study of what the crisis management team did and the effectiveness of those actions-it assesses what was done well or poorly. Postmortems are stressful because people fear management is looking for a scapegoat. It is critical that postmortems are not a search for blame but a search for information. Once evaluated, the crisis team is briefed on its performance. The team learns what it is doing right and what it should change for future crisis management efforts. The next crisis practice should focus on the points the team should change. For instance, if there is a problem coordinating efforts with emergency responders, the next crisis practice should concentrate on the organization-emergency responder interface. The postmortem needs to be structured by having a set group of criteria. The results of the postmortem will be better organized if the process is systematic. The results of the postmortem are then stored for future reference. The better organized the postmortem information is, the easier it will be to retrieve as a reference at some future date. Storing the postmortem information is institutional memory about crisis management and the knowledge can be referenced whenever needed.

The crisis management process is actually a circle. Learning can inform any of the other three stages. Lessons from the crisis may help in prevention (e.g., how to reduce some risks), preparation (e.g., how to improve the crisis management plan), or response (e.g., how better to deal with the news media).

New communication technology has had an impact on crisis management. The impact has been felt in information storage and dissemination. A crisis plan should be short but will include how to find information that could be critical in a crisis such as the location, amount, and types of hazardous chemicals at a facility. An intranet is a perfect supplemental source to the crisis management plan. Volumes of information can be stored on the intranet and quickly retrieved by the crisis team during a crisis. Instead of requesting information from another party, the crisis team can access information directly. Of course, this assumes the crisis team will have access to the intranet and that the intranet will remain functional during a crisis. Crisis management teaches the teams to have backups so there are alternative means for finding the requisite information. Stakeholders expect organizations to integrate the internet into their crisis communication efforts. It is now common for organizations to have either dedicated crisis Web sites or sections of their organizational Web site for crisis information. Customers, suppliers, the news media, and community members can be updated quickly by posting information to the crisis Web site. Again, this assumes that the crisis team can access the Web site during a crisis. This is a fairly safe assumption because crisis-prepared organizations will use secure, remote locations to store servers. As a result, even if a facility is destroyed, an organization will still have its intranet and Web site that the crisis team can access remotely.

Crisis management is a complex process rather than consisting of a few simple actions. For crisis management to be effective, an organization must embrace the entire concept and not declare itself crisis prepared just by creating a crisis management plan and team. Crisis management is an ongoing process as organizations monitor risks that could become crises, revise existing procedures, and practice current crisis management plans with crisis management teams.



References

Coombs, W. T. (1999). _Ongoing crisis communication: Planning, managing, and responding._ Thousand Oaks, CA: Sage.

Coombs, W. T. and Holladay, S. J. _Helping crisis managers protect reputational assets: Initial tests of the situational crisis communication theory._ _Management Communication Quarterly_ vol. 16 pp. 165-186 (2002)

Fink, S. (1986). _Crisis management: Planning for the inevitable._ New York: American Management Association.

Mitroff, I. I. (2001). _Managing crises before they happen: What every executive and manager needs to know about crisis management._ New York: AMACOM.

Pauchant, T. C., & Mitroff, I. I. (1992). _Transforming the crisis-prone organization: Preventing individual, organizational, and environmental tragedies._ San Francisco: Jossey-Bass.

Ray, S. J. (1999). _Strategic communication in crisis management: Lessons from the airline industry._ Westport, CT: Quorum Books.

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