Prevention of unexpected events and disasters
Although unexpected events and disasters will happen managers should do everything they can to prevent a crisis. A critical part of the prevention stage is building trustworthy relationships with key stakeholders such as employees, customers, government unions and the community. By developing favourable relationships, managers can often prevent crises from happening and respond more effectively to those that cannot be avoided. For example organizations that have open trusting relationships with employees and unions may avoid crippling labour strikes.
Good communication also helps managers identify problems early so they do not turn into major issues. Nike had early warning from distributors in the Middle east that its flame logo on a basket ball shoe looked like the word Allah in Arabic script and would be considered offensive to Muslims. Although the company made some minor changes, managers failed to take the warning seriously Eventually, Nike had to recall nearly 40,000 pairs of the shoes and issue an apology to Muslims. Similarly Coca-Cola suffered a major crisis in Europe because it failed to respond quickly to reports of foul-smelling Coke in Belgium. Former CEO, Douglas Daft, observed that every problem the company had faced in recent years can be traced to a singular cause: We neglected our relationships.
Three steps in the preparation stage are designating a crisis management team and spokespersons, creating a detailed crisis management plan and setting up an effective communications system. Some companies are setting up crisis management offices, with high level leaders who report directly to the CEO. Although these offices are in charge of crisis management, it is important that people throughout the company be involved. The crisis management team, for example, is across functional group of people who are designated to swing into action as a crisis occurs,. They are closely involved in creating the crisis management plan and they’ll be called upon to implement the plan if a disaster hits. The US Office of Personal Management in Washington DC has nearly 200 people assigned and trained to take immediate action if a disaster occurs including 8 employees assigned to each of 10 floors to handle an evacuation. The organizations should also designate a spokesperson who will be the voice of the company during the crisis. The spokespersons in many cases are the top leaders of the organizations. However, organizations typically assign more than one spokesperson so that someone else will be prepared if the top leader is not available.
The crisis management plan (CMP) is a detailed written document that specifies the steps to be taken and by whom if a crisis occurs. The CMP should include plans for dealing with various types of crises, such as natural disasters like fires or earthquakes normal accidents like economic crises or industrial accidents and abnormal events such as product tampering or acts of terrorism. The plans should include details for ensuring the well-being of employees and customers, procedures for back up and recovery of computer systems and protecting proprietary information details and recovery of computer systems, details on where people should go if they need to be evacuated, plans for alternative work sites if indeed and guidelines for handling media and other outside communications. Morgan Stanley Dean Witter, the World Trade Centre’s largest tenant with 3,700 employees adopted a crisis management plan for abnormal events after Bomb threats during the Persian Gulf war in 1991. Top managers credit its detailed evacuation procedures for saving the lives of all but six employees during the September 11, 2001, attack. Everybody knew about the plan said a spokesperson. We met constantly to talk about it. A key point is that a crisis management plan should be a living changing documents that is regularly reviewed, practiced and updated as needed.
Source: New Era of Management