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Crisis & Risk Management Introduction

Crisis & Risk Management Introduction. Crisis happens more than we imagine. They are not always easy to see unless they affect our own lives. Crisis: A working definition. Definition of “crisis” is subjective, based on perception of:

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Crisis & Risk Management Introduction

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  1. Crisis & Risk ManagementIntroduction

  2. Crisis happens more than we imagine.They are not always easy to see unless they affect our own lives.

  3. Crisis: A working definition • Definition of “crisis” is subjective, based on perception of: • threat to one or more of an individual’s or organization’s basic values or missions, • finite time to make decisions and take action, and • lack of “standard operating procedures - SOP” or inability to implement SOP to address the situation

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

  5. What is a Crisis? • Home “here” or home “there” • Physical or emotional • May involve an Individual or many • Death or serious illness • Natural disaster • Health Concerns • ?????

  6. What is Crisis? A crisis is anything that has the potential to significantly impact an organization..........

  7. Is a Crisis Plan Needed? • Does anyone really believe a plan is not needed? • In time, you will deal with a disaster. Will you be ready?

  8. After the Crisis • Take some time • Review and revamp procedures • Be prepared for the next crisis!

  9. A Crisis Management Plan is like an insurance plan- you hope you never have to use it, but if you do, you want the plan to be the best plan possible!

  10. What is Crisis Management? • The overall coordination of an organization's response to a crisis, in an effective, timely manner, with the goal of avoiding or minimizing damage to the organization's profitability, reputation, or ability to operate. • Crisis management involves identifying a crisis, planning a response to the crisis and confronting and resolving the crisis.

  11. Crisis management objectives Crisis management has four objectives: • Reducing tension during the incident; • Demonstrating corporate commitment and expertise • Controlling the flow and accuracy of information • Managing resources effectively

  12. The Crisis Life Cycle • Stage one: The Storm Breaks • Stage two: The Storm Rages • Stage three: The Storm Passes

  13. 1- The Breaking Crisis • Control seems to be slipping out of the system (company). • Lack of solid detail about the crisis. Hard-to-provide information demanded by the media, analysts and others. • Temptation to resort to a short-term focus, to panic and to speculate. • For a period of time, everyone loses perspective.

  14. 2- Spread and Intensification of Crisis • Speculation and reports develop in the absence of hard facts. • Third parties- regulators, scientists and other experts – add weight to the climate of opinion. • Corporate management comes under intense inspection from internal and external groups.

  15. 3- Rebuilding Needs • To manage reputation. There are opportunities in a crisis to build positive perceptions that remaining beyond the crisis period. • The system embarks on a long-term programme to tackle management issues and communication problems that worsened the crisis.

  16. Problems and Challenges in Crisis Decision-Making • Surprise and hesitation. The shock of a crisis can create a delay in response that allows your critics and the media to fill the gap with negative comment and speculation. • Pressure and stress must be channelled by the discipline of a crisis strategy. • Mistaking information distribution for communication. • Treating key audiences as “challengers”.

  17. Good crisis management is essential, but never a substitute for daily risk management processes. • Risk management processes should apply to all stakeholders, although depth and detail may depend on the transaction and stakeholder.

  18. Crisis management • Despite a solid risk management process, there will be problems because we cannot predict all crisis events and protect against them. • Be prepared to deal with a crisis event and take action immediately – identifying and assessing issues and options and obtaining expert advice as needed.

  19. Crisis Communications • Good communication is the heart of any crisis management plan. • Communication should reduce tension, demonstrate a corporate commitment to correct the problem and take control of the information flow. • Crisis communications involves communicating with a variety of constitutes: the media, employees, neighbours, investors, regulators and lawmakers.

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