Coping with a business crisis

Crisis Management 101

Crisis management expert Ross Campbell, author and director of consultancy Ross Campbell and Associates, believes there are always going to be ongoing issues and emergencies in every business. Some will be continual bubbling issues—such as cash flow, new regulations, and staff leaving—but some issues can tip over to become a critical issue. Then, there are some you can’t prepare for.

He uses the extreme US examples of 9/11 and a major recall by Johnson & Johnson 20 years ago when a number of people died from cyanide poisoning when the company’s flagship analgesic Tylenol was laced in several stores. “And nobody ever knew that a student was going to walk into Monash University and start shooting,” he says, “or if you’re living in northern Queensland at the moment, that floodwaters are going to come into your shop and potentially wipe you out.

“It comes as a painful shock when confronted by the real world of a random, nasty event, often categorised by incredibly dangerous results—bottom line issues that slow your business right up and, in some cases, stop it. I don’t think most managers are prepared, either emotionally or intellectually, to face the worst-case scenario,” says Campbell.

“There’s a better understanding now than ever before about the fact that you need to know what to do, and I think people have some kind of risk planning, but can they manage it when it happens? They may have identified some of the risks, but not formally by putting a plan in place to deal with them.”

In most cases, especially with SMEs, Campbell says the police will manage the emergency, and you’ve got expert trained responders to help you, but as the business owner you have to protect your bottom line, your people, your assets, and make sure you recover.

In order to identify and plan for a worst-case scenario, Campbell advises businesses to take the following steps:

1. 1. Have a commitment to have a plan, a process, and a team. Even in the smallest of businesses, one person can’t manage a critical incident; there’s got to be a group of people who do it and in an SME that may mean bringing in people.
2. 2. The team has to identify the worst 10-20 threats that could critically affect the business. There are some generic threats right across business but there will be specific threats that need to be managed in each individual case. Even businesses that have multiple branches will have different threats at each site.
3. 3. Once threats are identified, correct them so they don’t reach the point where they’re bubbling over into a crisis. And for those crises you may not be able to completely prevent, the key response team needs to rehearse how they will manage those situations.

“Some people might say they can never get control of the possibilities, but I think that means they haven’t been analysing their risks well enough to see they can prevent them. Business can be resilient against crisis—not every crisis, we can’t stop lightning striking, we can’t stop a car running into a building, we can’t stop an armed hold-up, but we can make it hard for those things to happen.”

In times of crisis it’s also important to manage the media effectively. “In today’s world of instant media coverage, if you don’t get your message out quickly, somebody else will, so that’s a big issue,” warns Campbell. “Whether you’re a small or big business, you can attract media attention and you’ve got to talk to your employees very quickly first, then your other key stakeholders before the media know. Then, get ready for the media to come because they will ask questions and you can’t just stand there and say ‘no comment’.

“The big value-add in this process is the internet—it can work against you, but if you’ve got a website and you publish information quickly about what’s gone wrong and how you’re dealing with it, you will take the high ground.”

Campbell has published a book, Crisis Control, Preventing & Managing Corporate Crises, which is a useful resource for businesses to help identify their top threats and to ask key questions like who is going to lead the response and who the core team will be. Check it out at www.crisismanagement.com.au.