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Insight

Crisis Management Part 2: Preparation is everything

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A crisis may occur at any time and can impact your business in a number of ways. Despite many years of good work in building a strong and favourable image in the community, your Strata firm’s reputation can be tarnished quickly if a crisis is not managed effectively.

In Part 2 of our Crisis Management Series, we cover a number of important areas regarding Crisis Management:

  • Setting up a Crisis Response Process
  • Core elements of a Crisis Management Plan
  • The importance of setting up an Event Escalation Process in defining a crisis

To refresh your memory on what we covered in Crisis Management Part 1 and put this article into context – please click here.

Crisis Response Process

In a crisis situation, it is immensely important that you have a pre-defined process in place to help reach an effective Crisis Management outcome.

When caught up in the frantic aftermath of a crisis, this will help to ensure that you and your Crisis Management Team have a clear process to follow, and can elicit a methodical response without overlooking any key areas.

The absence of a detailed response procedure could see this happen to the best of us!

Your Crisis Response Process should address a number of key areas:

  1. Establish the core objectives of your crisis response
  2. Establish the core objectives of your Crisis Management Team
  3. Assess the situation at hand

Below we have provided a step-by-step guide for you to follow as an example.

When developing your own Crisis Response Process, we encourage you to refer to this template. Having a clear, pre-defined process will assist you to effectively manage potential crisis situations, while helping preserve your brand reputation.

Step 1. Define the Objectives

Defining your key objectives at the outset of a crisis is core to the successful management of the situation.

Step 2. Confirm Roles & Responsibilities

Determine who, and what skills are required on the Crisis Management Team.

Step 3. Capture the Facts

In a crisis you need to do the following: 

  • Ask key questions - What do we know? What can we confirm as fact?
  • Maintain a chronological record of the event.
  • Define the situation at hand – can the crisis be classified as contained or uncontained?

Step 4. Consolidate the Assumptions

Establish the following:

  • What do we believe has occurred?
  • What might occur as a result?

Figure 1. featured below, is an example you can reference when forming the structure of a suitable team.

Crisis Mgmt team chart

Step 5. Identify Worst Case and Most Likely Scenarios

When working through these scenarios, we recommend obtaining the views of your Crisis Team members. Don’t discount anything!

Step 6. Determine Priorities

Establish immediate actions, as well as the information needed to stabilise the crisis situation. Enhanced information will assist decision making on more immediate priorities.

Step 7. Determine and Weigh up your Response Options

Consider the range of responses you have available, and the different risks associated with each option - What needs to be done now? What can wait?

Step 8. Identify StakeholdersStakeholder image v2

Identify the range of stakeholders that are or will be impacted when managing the fall out. We recommend developing a contact list and logging all contacts for your records.

Step 9. Draft Key Messages

Develop the key messages you need to get out to your stakeholders.

It would be a good idea to have some basic templates prepared for a range of foreseeable crisis events. This will help to make communications more efficient in situations where many stakeholders need information quickly. 

Developing a Crisis Response Plan

Important things to consider
When preparing for a crisis, there are several important aspects you need to address within your Crisis Response Plan. An overview of these elements is displayed in Figure 2. 

Crisis Response Plan Figure 2 large

Event Escalation Process

Establishing an Event Escalation Process is essential to crisis preparation.

The Event Escalation Process involves developing set criteria that enables you to define a crisis. This will help you to determine whether you do in fact have a crisis situation on your hands, and whether you need to set your Crisis Management Plan into motion.

In order to ascertain a clear picture of whether an event is a moderate incident or a crisis, we recommend you develop an Incident Escalation Chart. While these can be complex in nature, we have included a simple Incident Escalation Chart for you to follow as an example.

Incident Escalation Chart  

Incident Level DescriptionNext time...

While the above is by no means an exhaustive guide on what you need to do to prepare a Crisis Management Response Plan, we hope this is effective in providing you with some direction on how you can begin to formulate the foundations.

In Part 3 of our Crisis Management Series, we will delve deeper into each of the core components of a Crisis Management Plan, providing detailed information on what you need to incorporate within each element.

In the meantime, if this article is ringing alarm bells, and you would like to engage further advice on developing a Risk and Crisis Management Plan, please contact your Whitbread Account Manager on 1300 424 627.

 

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This insight article is not intended to be personal advice and you should not rely on it as a substitute for any form of personal advice.  Please contact Whitbread Associates Pty Ltd ABN 69 005 490 228 Licence Number: 229092 trading as Whitbread Insurance Brokers for further information or refer to our website.

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