Transcript lecture 11.ppt

Lecture 11
Elements of Crisis &
Comprehensive Crisis Management
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Elements of a Crisis
Three elements are common to most definitions
of crisis:
(a)a threat to the organization,
(b) the element of surprise,
(c)a short decision time
(d)a need for change
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Crisis management - 1
Crisis management consists of:
• Methods used to respond to both the reality
and perception of crises
• Establishing metrics to define what scenarios
constitute a crisis and should consequently
trigger the necessary response mechanisms.
• Communication that occurs within the
response phase of emergency management
scenarios
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Crisis Management - 2
The credibility and reputation of organizations is
heavily influenced by the perception of their
responses during crisis situations
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Crisis Management - 3
* respond to a crisis in a timely fashion makes
for a challenge in businesses.
* must be open and consistent communication
throughout the hierarchy to contribute to a
successful crisis communication process.
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Types of Crises
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Natural disasters
Malevolence
Technical breakdowns
Human breakdowns
Challenges
Mega-damage
Organizational misdeeds
Workplace violence
Rumors
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Crisis Management
Technological crises
- caused by human application of science and
technology
- when technology becomes complex and
coupled and something goes wrong in the
system as a whole (Technological breakdowns)
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Crisis Management
Crises of organizational misdeeds
- when management takes actions it knows will
harm or place stakeholders at risk for harm
without adequate precautions
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Crisis Management
Types of crises of organizational misdeeds:
- crises of skewed management values
- crises of deception
- crises of management misconduct.
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Crisis Management
Crisis management model
Successfully diffusing a crisis requires an
understanding of how to handle a crisis –
before it occurs
- issues management
- planning-prevention
- the crisis
- post-crisis
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Contingency Planning
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Plan in advance
Rehearse via simulation
Stipulate who the spokesperson is
Speed and efficiency in response to crisis
Offer accurate information or it will backfire
Plan offers info and guidance to help decision
makers deal with long-term effects of decisions
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Role of apologies in crisis management
• Controversial - for fear of legal outcomes
• Evidence says that a compensation and
sympathy are effective
• True contrition includes sympathy for victims
and offers of compensation to offset losses or
suffering
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TOYOTA –
CRISIS MANAGEMENT FAILURE
Toyota’s communication strategy:
“Too little, too late”
Beyond the quality problem
Toyota mismanaged the crisis
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TOYOTA
Basic Rules Violated
• For senior Manager: crises must become their
#1 priority immediately.
• Integrity of firm threatened - immediate
hands-on control of CEO/team
• Sticking accelerators in 2008 - not treated as a
serious matter
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TOYOTA
Basic Rules violated
Find facts & solutions fast:
- Toyota managers at first in denial
- accepted a ‘patch’ (remove floor mats), not
solution
- when crisis exploded -- engineering
solution/stopped production
- Even today no one outside of Toyota knows what
the real problems are – open to speculation and
rumors
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TOYOTA
Basic rules violated
Communicate fully and accurately:
- to all constituents to sustain trust
- err on side of protecting consumers &
maintain trust with a recall
What Toyota did:
hushed problem and hoped it go away
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Comprehensive Crisis
Management
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Before
1. Crisis Types
2. Crisis Mechanisms
3. Crisis Systems
4. Crisis Stakeholders
Expose
Weaknesses
Build
Capabilities
During
Enact
Capabilities
After
Learn
Redesign
To Enact Is NOT To React
To Enact Is To Be Proactive
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The Manager’s Crisis Index :
The Lukaszewski Group
Potential Crisis Situations
A
Abortion
Accidents
Adverse Government Actions
AIDS
W
Anonymous Accusers
Whistleblowers
Over 120 items & the list seems endless!!
Situation Hopeless??
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CRISIS FAMILIES
TECH / ECON
NATURAL DISASTERS
LEGAL
EXT INFO
EXT ECON
ATTACKS
BREAKS
MEGA-DAMAGE
OCCUP-HEALTH
PSYCHO
CRIMINAL
GOVT REGULATORY
ORG / SOC
HR / REP
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Breaks
Loss of Key Equipment, Plants, Supplies
Breakdown of Key Equipment, Plants
Loss of Key Facilities
Major Plant Disruption
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Psycho/Criminal
Product Tampering
Kidnapping
Hostage Taking
Terrorism
Workplace Violence
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Economic
Labor Strikes
Labor Unrest
Labor Shortage
Major Decline in Stock Price and Fluctuations
Market Crash
Decline in Major Earnings
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Human Resource
Loss of Key Executives, Personnel
Rise in Absenteeism
Rise in Vandalism and Accidents
Workplace Violence
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Informational
Loss of Proprietary and Confidential
Information
False Information
Tampering with Computer Records
Loss of Key Stakeholder Information
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Natural
Earthquakes
Fires
Floods
Explosions
Typhoons
Hurricanes
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Reputation
Slander
Gossip
Sick Jokes
Rumors
Damage to Corporate Reputation
Tampering with Corporate Logos
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CRISIS FAMILIES
T
TECH / ECON
NATURAL DISASTERS
LEGAL
EXT INFO
EXT ECON
ATTACKS
MEGA-DAMAGE
BREAKS
OCCUP-HEALTH
PSYCHO
CRIMINAL
GOVT REGULATORY
F
ABNORMAL
ORG / SOC
HR / REP
NORMAL
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CRISIS FAMILIES
T
TECH / ECON
NATURAL DISASTERS
LEGAL
EXT INFO
EXT ECON
ATTACKS
MEGA-DAMAGE
BREAKS
OCCUP-HEALTH
PSYCHO
CRIMINAL
GOVT REGULATORY
HR / REP
N
S
F
ABNORMAL
ORG / SOC
NORMAL
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Which Family Is Planned For
Most and Why?
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CRISIS FAMILIES
T
TECH / ECON
NATURAL DISASTERS
LEGAL
EXT INFO
EXT ECON
ATTACKS
MEGA-DAMAGE
BREAKS
OCCUP-HEALTH
BREAKS
PSYCHO
CRIMINAL
GOVT REGULATORY
HR / REP
N
S
F
ABNORMAL
ORG / SOC
NORMAL
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Which Family Is Planned For
Least and Why?
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CRISIS FAMILIES
T
TECH / ECON
NATURAL DISASTERS
LEGAL
EXT INFO
EXT ECON
ATTACKS
MEGA-DAMAGE
BREAKS
OCCUP-HEALTH
CRIMINAL
PSYCHO
PSYCHO
GOVT REGULATORY
HR / REP
N
S
F
ABNORMAL
ORG / SOC
NORMAL
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Thank You
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