Putting out forest fires - crisis management

A crisis can hit any business. it can hurt cash flow, productivity, the public's faith, and the company's image. The adverse effects come in two major areas: public image and cash flow, both of which can be devastating. Lack of planning ensures maximum pain and the greatest chance of future collapse. A proactive stance can lessen the pain and give the best chance of recovery. Like a forest fire, a crisis can be snuffed early or it can destroy thousands of "acres." The best manager will have plans for crisis management and will be able to smell the smoke before the blaze consumes the forest

Each crisis m an organization has typical stages. The control one can exert on these stages can determine the future of the organization--and, often, the future of its leaders. The goal is to control the burn and put the fire out. The quicker the better.

The Prodrome

The "prodrome" is the pre-crisis stage in which the warning signs show themselves to management. The most common first warning is "nonperformance." Something isn't being done or isn't being done right. Correcting the nonperformance is an opportunity to avoid a crisis; ignoring or missing it is an invitation to a full-blown crisis.

Not every crisis can be anticipated. Johnson & Johnson could have had little anticipation that someone would tamper with Tylenol by adding cyanide. But, for many situations, a watchful eye can avoid later image damage.

Fink says there are five important questions to ask when the smoke of a pre-crisis appears.

How intense could this crisis become?

How likely is it to become a public concern?

* How badly might it affect the business?

*What effect might it have on image?

* How badly could the worst scenario affect cash flow?

The answers to these questions require some educated guesses. Fink scores them zero (little likelihood) to ten maximum chance). By adding the scores for all five categories and dividing the sum by five, the overall Crisis Risk Impact is calculated. This score is mere probability. The real goal is to figure out how not to get there.

Meyers has developed a similar scale involving a time vs. options graph. The result is a danger determination. The more options and time available, the less the danger. The shorter the time to react and the fewer the options, the worse firm might get.

The figure below is a compilation of Fink's and Meyer's graphs. It combines parameters to give a good idea of where a crisis may go. Then, through a look at Fink's five questions, it gives an idea of where to head first to fight the fire.

The Acute Crisis

If worse comes to worse, there is a blazing fire. Here it helps to have a plan that addresses the following areas:

* Find out where you are on the Crisis Graph (see figure). It's a guess, but it's important.

* Will the crisis affect image? Which areas are ripe for immediate control?

* Have a team that consists of members who can handle the following tasks:

* Chief crisis manager, often the CEO, to handle overall strategy.

* Finance expert who can guess what might happen to cash flow.

* A What If? " member (Meyer's term is a creativity" position). This is someone who can think the unthihkable and offer options.

* A communications expert who can handle the media.

* Advisors, including those outside of the business, who represent the public's image concerns.

* Rehearse by anticipating your own weakest areas. How have others handled a crisis well? How would your team handle them?

*When the actual crisis does come, the team is assembled and ready for action.

The Crisis Plan

*Take control. Get facts and assemble the team. Take charge of cash flow.

* Brainstorm with the team to identify the areas where immediate action can stop the spread of the flames. Set objectives.

* Shut down the losers immediately.

* Stay flexible, because flames can change with the winds.

* Communicate! Communicate with your people, your investors, your patients, and the media. Never say "No Comment," because it's as good as saying you're guilty even when you're not. Being proactive with the media allows you the best opportunity to control your message. it avoids miscommunication.

Always make sure your answers reflect the message you want delivered. Fink has some wonderful ways to defuse the hostile questions. "That's an interesting question, but before answering it, I feel the people need to know ... (your point)." "Of course, that's one way to look at it, but it may be helpful to first examine the question this way ... (your point)." "Usually when that question is asked, people want to know ... (your point)."

In all of these cases, make sure you deliver the single point you feel is key in a way you want it to be remembered. It's your answer, not the question, that's remembered.

Reestablish credibility by letting people know the situation is being addressed. Let them know it's being turned around and how much better the future win be. Take your message to the public.

Look for opportunities. Johnson & Johnson found them in special tamperproof packages for Tylenol.

After the Crisis

According to Fink, the business with a crisis management plan spends about onefifth the time in the acute stage as those without plans. When the crisis is over, it's time to replant the forest. Let the public know how many benefits came about with the end of the crisis. Run lean until all of the wounds are healed.

References

1. Fink, S. Crisis Management. New York, N.Y.: AMACOM, 1986.

2. Meyers, G. When It Hits the Fan. Boston, Mass.: Houghton Mifflin Co., 1986.

T H E A U T H O R

Richard M. Burton, MD, is Communications Consultant, Pikes Peak Emergency Specialists, Colorado Springs, Colo.

Further Reading

The following additional sources of information on crisis management were obtained through a computerized search of databases. Copies of the articles cited are available from the College for a nominal charge. For further information on citations, contact Gwen Zins, Director of information Services, at College headquarters, 813/287-2000.

Cohen, A "Crisis Management: How to Turn Disasters into Advantages." Management Review 71 (8):27-8,37- 40, Aug. 1982.

"Crisis Management #1. Using the Unexpected to Good Advantage." Profiles in Hospital Marketing (10): 16-21, 2d Quarter 1983.

"Crisis Management #2. One Picture Makes a Thousand Words. " Profiles in Hospital Marketing 10):224,2d Quarter 1983.

Smith, R. "How To Plan for Crisis Communication." Public Relations Journal 35(3):17-8, March 1979.

Tellem, S. "Crisis Management-plan to Be Prepared." Medical Group Management Journal 35(4):38,40-1, July-Aug. 1988.

Vickery, H. "It's the Press. There's a Crisis. What Now?" Association Management 35(3):46-9,50, March 1983.

Williams, L. "PR Crisis Control." Michigan Hospitals 22(6) 15-8, June 1986.

COPYRIGHT 1989 American College of Physician Executives
COPYRIGHT 2004 Gale Group