Crisis Management

1. CrisisManagement A presentation by Bruce Hugman Consultant to the Uppsala Monitoring Centre Pretoria, September 2004

2. What is a crisis? • In general? • For an organisation? • For government or bureaucracy? • For a private company? • In healthcare? • In drug safety?

3. Topics • The nature of crisis • Crisis management model • Planning • Risk assessment • Risk management • Crisis communications • Risk Communications

4. Key features of a Crisis • Low probability • High impact • Uncertain/ambiguous causes and effects • Differential perceptions

5. High level threats: • Safety • Health • Environment • National security

6. Specific threats to organisation: • Operational viability • Reputation • Credibility • Financial stability • Legal action

7. Consequential effects: • Uncertainty/ambiguity • Urgency of response • Strategic effects of decisions

8. Common features of a crisis: • The situation materialises unexpectedly • Decisions are required urgently • Time is short • Specific threats are identified • Urgent demands for information are received • There is sense of loss of control • Pressures build over time • Routine business become increasingly difficult • Demands are made to identify someone to blame • Outsiders take an unaccustomed interest • Reputation suffers • Communications are increasingly difficult to manage

9. Purpose of crisis management: • Prevention • Survival • Successful outcomes

10. Successful outcomes: • Positive balance of success/failure

11. Incident Success outcomes Failure outcomes EXXON VALDEZ - Financial losses were bearable - Costs relating to clean-up were less than pre-emptive costs - Image management recovered the Company’s reputation in business community - Long term costs were transferred to public - Delays in implementing clean-up leading to loss of wildlife. - Image management failed to fully recover the Company’s reputation in wider community TYLENOL TAMPERING - Swift reactions reinforced Company reputation for integrity - Stakeholders reported high degree of trust - Product did not suffer in long term - Perpetrator was never identified - Future attempts cannot therefore be precluded

13. Three criteria of success: • Has organisational capacity been restored? • Have losses been minimised? • Have lessons been learned?

14. Crisis Management Model Antecedent conditions Intrinsic crisis Perceived crisis Immature crisis response Mature crisis management Review and Feedback

15. Open bow doors / poor safety culture Smoker / poor cleaning standards Existing conditions: Culture or environment

16. Existing conditions: Crisis-prepared or crisis-prone?

17. Total situation as seen by neutral observer with all the facts As seen by all individuals from particular viewpoints Intrinsic crisis: Perceived crisis:

18. Crisis Management Model Antecedent conditions Intrinsic crisis Perceived crisis Immature crisis response Mature crisis management Review and Feedback

19. Immature crisis response: Instant and irrational (denial/shock/panic)

20. Mature crisis management: • Grasp of intrinsic crisis • Implementation of plans and procedures

21. Mature crisis management: • Technical intelligence • Emotional intelligence

22. Review and feedback: • Assessing success and failure • Feeding learning into future planning

23. Crisis Management Model Antecedent conditions Intrinsic crisis Perceived crisis Immature crisis response Mature crisis management Review and Feedback

24. Management objective: • Ad hoc emergency reaction? OR • Building management capacity to handle unforeseen events?

25. End of Part 1

27. Part 2:Planning for Crisis Management

28. Crisis Management Model Crisis Management Planning Crisis- prepared culture Antecedent conditions Technical Intelligence Emotional Intelligence Intrinsic crisis Perceived crisis Authorisation Procedures Immature crisis response Crisis Management Implementation Mature crisis management Integration of learning Review and Feedback

29. Gathering intelligence: • Who? • What? • When? • How?

30. Ministers Officials Political parties Sponsors Voters International allies The public in general Tax-payers Consumer and lobby groups Lawyers The media ? Who for Government?

31. Manufacturers Regulators Politicians Employees Health professionals Pharmacists Academics The public Patients Consumer and lobby groups Lawyers The media ? Who for medicine and drug safety?

32. The first goal of crisis management is prevention

33. Intelligence: • Continuous scanning (networks/media/ppublic opinion, etc) • Outward focus • Collaboration • Positive relationships

34. Assess risks

35. Risk assessment is: • Identification • define and describe • Estimation • likelihood and consequences • Evaluation • acceptability of risk

36. Identification Estimation Evaluation Medication in question could be mistaken for sweets by young children Medium chance leading to severe health problems or death Unacceptable Recall of a defective batch of medication may lower consumer confidence and take-up rate High chance that public and media criticism will arise Acceptable

37. Identification Estimation Evaluation Planning Medication in question could be mistaken for sweets by young children Medium chance leading to severe health problems or death Unacceptable Product needs to be re-designed to prevent the possibility Recall of a defective batch of medication may lower consumer confidence and take-up rate High chance that public and media criticism will arise Acceptable Priority actions to sensitively withdraw product whilst reassuring honestly and openly

38. Risk management is: • Planning • Resourcing • Monitoring • Controlling

39. Crisis Planning: • Assess risks • Produce plans • Define roles and responsibilities • Appoint crisis management team • Draw up communication plan • Produce contact and organisation chart • Promote crisis-ready culture • Publish plans and conduct training • Test, review and practise

40. End of Part 2

42. Part 3:Crisis Communications

43. Communication plan: Core elements are: • Identifying audiences (Who?) • How communication is to take place (How?) • What messages are to be communicated (What?) The core process is: • Active, two-way communication

44. Ministers Officials Political parties Sponsors Voters International allies Tax-payers Manufacturers Politicians Health professionals Pharmacists Academics Patients Shareholders Stock-market Regulators Senior executives Experts Employees The public Customers Consumer and lobby groups Lawyers The media ? Who matters and how will they be contacted?

45. Dear Consumer Group You will understand that managing the nation’s drugs is a complex business. From time to time there are scares or crises which cause much concern to everyone. We are keen to discuss the handling of such events, and to plan jointly with you and others how we might best communicate with you in such circumstances. We’d like to establish one-to-one contact between a member of your team and ours…

47. Message Options [What?] • Full apology • Corrective action • Ingratiation • Justification • Excuse • Denial • Attack the attacker

48. What does the world want to see? • Acceptance of responsibility • Willingness to take positive steps

49. Message Options: • Full apology • Corrective action • Ingratiation • Justification • Excuse • Denial • Attack the attacker

50. Critical activities: • Initial response • Lines to take