Best Practice Crisis And Issues Management A Recommended Approach By SMC

Crisis/Issues Management

Best Practice

What is a Crisis?

A crisis can be defined as:

1. Any unplanned event, occurrence or sequence of events that has a specific undesirable consequence

2. Crises do not make appointments. They can occur at any time and under the most unfavourable circumstances

Main Causes of Crises

1. Acts of God

2. Management Decisions/Indecisions

3. Operational or Mechanical Problems

4. Human Error

Origins of Crises

Management 63%

Employee 22%

Other 14%

Based on data from the Institute of Crisis Management

Different Types of Crises

White Crime 19%

Labor Dispute 14%

Mismanagement 23%

Recalls 7%

Catastrophe 14%

Environmental 7%

Other 22%

Based on data from the Institute of Crisis Management

Examples of Crises

Fatality/multiple injuries

Natural disaster

Terrorism

Loss of site

Fire/explosion

Recall of a product due to a consumer death

Recall of major product line

Contamination of a major product line

Tampering of a major product line

Health threat/issues

Major plant/asset damage

Transport/accident (road/rail/air/sea)

Extortion/sabotage

Armed hold-up

Loss of utilities

Industrial dispute

Workplace violence

Environmental pollution

Corporate scandal/issues

Special interest group action/protest

Investigative media

Examples of Crises

How are Crises Categorised?

The most commonly used terms to categorise a crisis are:

1. Insignificant Event

2. Minor Event

3. Moderate Event

4. Major Event

5. Critical/Catastrophic Event


1. Insignificant Event

What is it? – a minor incident or problem or other internal event which can be handled by Head Office, the Business Unit or Site Personnel using standard operating procedures

What are its consequences? – it is not visible offsite, requires no external emergency services input and requires no reports to be filed with local, State or Federal regulatory authorities

How is it reported and managed? – along normal line management and reporting lines


2. Minor Event

What is it? – minor incident that doesn’t breach Regulations or involve a lost time injury. It may be an external event that doesn’t pose a direct threat

What are its consequences? – it may require a report to outside agencies but requires no assistance or protective actions by external personnel. Has the potential for low financial loss and involves no serious injuries

How is it reported and managed? – by the site Crisis Management Team or local response team only


3. Moderate Event

What is it? – incident or event that could escalate to a more serious crisis and/or affect operations

What are its consequences? – it’s an incident that’s not under control but doesn’t pose a threat to off-site areas. May require a response from external as well as internal personnel. Can be contained in-house and has the potential for a medium financial loss

How is it reported and managed? – by the Site Crisis Management Team, the Business Unit management and Corporate Officer of the day


4. Major Event

What is it? – serious event that has occurred or is imminent which poses a potential threat to employees, customers, the public or third parties. Also has the potential to seriously disrupt operations by interrupting supply but not on a significant cross-product scale

What are its consequences? - is a crisis that is not under control and requires action by off-site personnel. It has the potential for a major financial loss

How is it reported and managed? – by the Site Crisis Team, Business Unit Management and Corporate Officer of the day


5. Critical/Catastrophic Event

What is it? – serious event that has occurred or is imminent which is having a detrimental off-site effect. Also poses a serious threat to employees, customers, the public or third parties. Has seriously disrupted operations and supply on a

significant cross-product scale

What are its consequences? – is not under control and needs significant/immediate actions and assistance from external personnel and emergency services. Strong likelihood of fatalities and a huge financial loss

How is it reported and managed? – full Crisis Management Team plus activation of site-wide Crisis Management and Emergency Response plans

Importance of Planning

Crisis Management – deals with crises which

are often caused by ineffective issues management

Crisis Management in Context

Strategic & Financial Plans

Risk Review &

Analysis

Business Continuity Plan

Business Continuity Plan

(Protect)

Risk Management(Prevention)

Crisis Management

(Cure)

Disaster Recovery(Mop-Up)

Crisis Management in Context

Effective Crisis Management

1. First two hours are critical – need to assess the situation and

then take control

2. Need to identify, verify and communicate the facts – in an

authoritative, clear, unemotional, rational manner

3. Activate Crisis Management Plan - should be a seamless

process

4. Focus on outcomes – turn negatives, at best, into positives or, at

worst, into neutrals


1. Coordination

2. Workable guidelines

3. Consistent risk matrix

4. One page checklist/decision tree

5. Pocket sized manuals

6. Wallet cards

Activate Key Communicators & Support Person

- On Standby (via email and SMS)

Key Communicators & Support Person

- Confirm With Each Other Activation

Key Communicators & Support Person

-Confirm Activation at Each Location

Prepare Crisis Statement

- for Internal Release

Crisis Statement for Internal Release

- Signed Off

Communications Team

Initial Employee Communications

- Released to Key Communicators

Key Communicators & Team

- Gather Everyone at Location

Communications Takes Place

Key Communicators Advise Communications

Team that Initial Communications Complete

Crisis Statement Posted on

Intranet/Notice Boards

Next Update Prepared with Instructions

for Following Communications

Person

who confirms

activation is

deemed Key

Communicator


Managing Director

(and Board)

Code Red

Team Leader

Deputy Code Red Leader

Administration Coordinator

Specialist Business Advisers

Operational Crisis Team Leader

(if required)

Code Red Communications

Leader

MELERONICHELE PTY LTD

Incident Occurs

Local Incident Response

Plans Activated

Operational Crisis Team

Leader Appointed

Issue Arises Steps Taken to

Mitigate & Manage Issue

General Manager

Notified

Advises Group Manager

External Affairs

Advisers Group General

Manager or Group Manager

Advisers Managing Director

Managing Director

Declares Code Red

Code Red Team Leader

Appointed

Code Red Team Leader

Mobilises Code Red Team

Incident Driven Issues Driven

Situation Escalates

Responsible for Relaying Initial Information that a

Significant Event or Situation is in Progress

Role of Crisis Management Plan

1. To establish necessary, agreed, company

wide as well as BU/line area controls

2. To ensure alignment with business objectives

3. To create and ensure a consistent approach

4. To provide reassurance and keep key stakeholders informed

5. To marshal vital internal and external resources

What is a Crisis Management Plan?

1. Risk Management Plan - PreventionEmbraces all aspects of a company’s strategic & operational areas. Includes concepts of business resilience and long-term performance

2. Crisis Management Plan – CureDocuments all key resources, infrastructure, tasks and responsibilities required to support critical business functions in the event of a disruption

3. Disaster Recovery Plan – Mop-upDocuments key resources, infrastructure & processes to facilitate an immediate or staged return to normal/improved capability & performance

What’s in a Crisis Management Plan?

1. Executive Summary Why, How, What, When & Where

2. Type of Crisis Insignificant, Minor, Moderate, Major, Critical

3. Threat & Response

Product Recall, Contamination, Tampering,

Fatality/Critical Injury, Fire/Explosion, Plant/Asset Damage, Health Threat/Issue, Workplace Violence, Loss of Site, Transport Accident (Road/Rail), Extortion, Sabotage, Industrial Dispute, Bomb Threat, Loss of Utilities, Natural Disaster, Protests (by special interest groups), Environmental Disaster/Pollution,

Fraud, Corporate Scandal/Issue, Investigative Media


4. Roles and Responsibilities

Team & Individual, Senior Management, Crisis Team,

Line Managers, All Employees

5. Central Control

Where, when, how – access to key resources

6. Procedures

Event specific checklists, what to do when


7. Communications Internal & External (media, employees,

regulators, next of kin)

8. Templates For key documents & communications tools

9. Directory Key contacts – 24x7 access numbers

(internal & external contacts)

First 2 Hours Crisis Checklist

1. Assess situation/gather facts – who, what, when, where, how – use crisis information sheet/checklist

2. Notify key control points – line/BU manager, Crisis Management Team Leader, Corporate Affairs, Senior Executives

3. Notify authorities/emergency services – if necessary activate Emergency Response Plan

4. Crisis Management Team Leader/ control point categorises risk –using Australian Standards Crisis/Risk Matrix

5. Activate Crisis Management Plan - level of activation will depend on type of crisis

6. Assemble Crisis Team - confirm details, roles & responsibilities, required resources, timeframes, deliverables (as per Crisis Management Plan)

First 2 Hours Crisis Checklist

6. Prepare key messages – must be relevant to stakeholders, once approved (by Executive & Legal teams) distribute to key contact points (eg consumer advisory, corporate affairs, customer service operators)

7. Brief spokespeople – rehearse, provide detailed support Q&A, all materials are working documents to be updated as the crisis evolves

8. Communicate with stakeholders – in priority order, consistent use of key messages – deal with questions effectively

9. Complete initial reports – ensure compliance with legal/government regulations

10. Continue to implement Crisis Management Plan

Issues Management – helps avoid crises by anticipating and then mitigating specific situations / developments

What Else Must Be Done

Issues

Management

Framework

Information

Sharing &

Feedback

Issues Kit

Evaluation &

Management

Issues

Management

(Anticipate)

Training &

Support

Crisis

Management

(Cure)

Issues Management in Context

1. Issues Management Framework – that forms part of your

day-to-day corporate communications and risk management activities

2. Information Sharing & Feedback - from all areas of the

business at all levels, work with the Risk Management team to ensure all key issues are covered

3. Issues Kit – distributed to all key spokespeople and employees with

a customer-interface role – update the kit on a regular basis to ensure your key issues are up-to-date and your management is effective

Best Practice Issues Management

4. Evaluation & Measurement - against best practice

benchmarks and Australian Standards, build into KPIs where possible

5. Training & Support – to key spokespeople and customer facing

employees eg workshops, case studies, simulated testing. Key areas to consider include:

- Media Training

- How to Use an Issues Kit

- Dealing with Difficult Customers

- Simulated Product Recalls (desktop and company wide level)

Best Practice Issues Management

1. Executive Summary

Why, how, what, when and where

2. Type of Issues

Across all areas of the business

3. Roles and Responsibilities

Key spokespeople, customer interfacing employees, communications team

4. Key Issues

What, why, context, possible impact

What’s in an Issues Management Kit?

5. Mitigating Actions

Procedures and policies to prevent issues from becoming a reality

6. Detailed Q&As

To deal with queries, concerns, questions from stakeholders in the event issues become a reality, can be fed into Customer Services Team as a call centre script

7. Updating and Review Procedures

To ensure the Kit remains up-to-date and current at all times, effective system for issuing updated information to users of the Kit

What’s in an Issues Management Kit?

Key External Stakeholders

1. Customers

2. Shareholders

3. Investment Market

4. Media

5. Suppliers

6. Competitors

7. Regulators/Government

8. Emergency Response Services

1. Executives

• Senior Management Team

• Crisis Management Team

• Risk Management Team

• Corporate/Public Affairs/Communications

Teams

2. Other Employees

• Business Units

• Sales and merchandising team

• Front line/customer facing employees

• Customer Service teams

Key External Stakeholders

Seven Steps to Success

1. Predict – anticipate everything that could go wrong with your

organisation, identify the key issues, review and update them regularly

2. Position – decide what your position will be on each issue

3. Prevent – take preventative measures to ensure your issues don’t

become a crisis, develop management and mitigation strategies

4. Plan – in case prevention doesn’t work, prepare a plan for dealing

with a crisis

Seven Steps to Success

5. Rehearse – review your crisis and issue plans, update them as necessary, undertake simulation testing to ensure your crisis plan is robust and effective

6. Persevere – follow your plans, stick to the positions you’ve taken, strictly implement your crisis and issues management policies and procedures

7. Evaluate – review your crisis and issues management performance on a regular basis, focus on continuous improvement, benchmark against Australian Standard/global developments

And That Success is….

1. Protection – of your employees, customers, the general public, third

parties and local communities

2. Reduction – in terms of your potential for litigation

3. Retention – of the support from your key stakeholders

4. Protection – of your corporate reputation and brands

5. Continuation – of a commercially viable business delivering a strong financial performance

6. Protection – of your market share, sales and customer loyalty

7. Compliance - with all the relevant government and legal requirements

Best Practice Crisis And Issues Management A Recommended Approach By SMC

Business

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