Crises On The Rise

Is your organization prepared?

Deloitte conducted a survey [1] of over 500 senior crisis management, business continuity and risk executives.  Findings from this survey indicate respondents believe that crises are on the rise, necessitating the need for them to be ready to respond quickly and appropriately.  This includes plan implementation, testing and rehearsing for these threats.

From the “less visible” events such as cyber-attacks, financial fraud and corruption, and internal safety concerns, to the visually alarming emergencies caused by weather-related events, facility disasters or terrorist events, 80% of organizations have had to mobilize their crisis management teams at least once in the past 2 years.

These crises can have a devastating effect on a company’s financial performance, employee morale, sales and reputation.  Thanks to the proliferation of social media, what was once an accident or minor incident, is now displayed, sometimes within minutes of an incident, for all the world to see.  It is important for an organization to get out in front of an occurrence to maintain the confidence of all stakeholders.

But are organizations truly prepared to implement a crisis communication plan?  While the vast majority of those who responded to this survey do have some sort of crisis management plans in place, it is clear more needs to be done.  Findings from the survey revealed that:

• Confidence outstrips preparedness.  Companies are more confident in their ability to manage a crisis than their level of preparedness indicates.  Nearly three quarters of the survey respondents felt confident in their organizations’ ability to deal with a crisis, yet only half of these companies have plans in place, and just under a third have run simulation exercises.
• Experiencing a crisis drives organizations to avoid them.  Nearly 90% of the survey respondents indicated they have conducted internal reviews following a crisis.  They recognize the need to respond to threats before they happen by detecting the early warning signs, investing more effort in prevention and to identify potential crisis scenarios.
• Leaders need more development for crisis management.  Leading during a crisis is vastly different than leading during normal times.  It is critical that strong leadership skills and situational awareness are well developed.
• Being prepared significantly reduces the negative impact of a crisis.  Having board members and senior management committed and involved in the creation of a crisis management plan and participating in simulations/exercises increases effectiveness of the implementation.  Overall, about a third of organizations with a crisis plan in place report finances have been negatively impacted during a crisis, while that number jumps to nearly half of the organizations surveyed if no plan is in place.
• While third parties may be part of the problem, they can also be part of the solution.  Many crises may be triggered by suppliers or other partners.  And these critical service providers should be involved in crisis planning.  Bringing in outside advisors, identified in advance of any crisis, such as lawyers, PR firms, or other specialists, can help in managing a crisis.

The frequency and causes of crises are not likely to diminish.  There are a constant barrage of potential attacks from a variety of sources just waiting to pounce on the next victim.  Preparing your organization to be ready for any crisis is best handled when the board of directors and senior management is committed and initiates the need for planning.  The appropriate personnel must then be tasked with executing the planning, implementation and conducting simulated exercises, testing those in the organization who would be involved in an actual crisis.  Most organizations must overcome several challenges to be ready to navigate a crisis, however following these recommendations will go a long way towards making your organization more resilient and able to handle these crises as they arise.

Preparedness, LLC has many solutions to help your organization create and implement a crisis management program.  Visit our Crisis Management page to learn more about what we can do to help your firm plan for the unexpected.

Preparedness, LLC also offers capabilities to help your organization evaluate your preparedness program.  Download our Self-Assessment Checklist and check-out our comprehensive solutions to prepare your organization.

[1] Dent, Peter; Woo, Rhonda; Cudworth, Rick. 2018/06/18. Stronger, Fitter, Better. Deloitte Insights.https://www2.deloitte.com/insights/us/en/topics/risk-management/crisis-management-plan-resilient-enterprise.html?mod=djemRiskCompliance?id=us:2el:3es:4di_gl:5eng:6di