Tagged: Crisis Management; Crisis Communication; Reputation Risk

Hospitals should Learn from the Mandela Media Circus and Update their Crisis Plans


Here’s a question for you – When last have you conducted a dry -run or have had an independent audit of your hospital group’s crisis plan – its communication management and emergency action plans? Especially with the media furore and presence at Nelson Mandela’s hospitalisation and with the proliferation of social media tools and mobile phone technologies.

The Star newspaper reported that “jumpy journalists thronged outside the Pretoria Hospital where the icon is being treated…they also reported that Security had to be beefed up” Other Hospitals can learn from this. With more and more politicians and celebrities visiting South Africa, this is likely to happen more often.

Crises can result in unplanned visibility that can affect the standing of a Company in the eyes of its stakeholders. That’s why an audit of a Company’s crisis plan is as vital as regular financial audits.

A crisis can strike a Business at any time; and during this crisis a Company’s image and reputation can be damaged significantly. Often, this can be a result of not responding adequately to media and other stakeholder enquiries. Understanding what Communication challenges may arise during a crisis or before one occurs is therefore critical.

No Company, organisation or individual whose livelihood depends on public support can therefore afford to function without a crisis communication plan. Yet, many organisations still have no such plans. Many companies say they need it but think that with positive thinking and hope the inevitable will never occur. The reality is that Crises are often unavoidable. What is avoidable is being ill prepared. After all, Noah built the Ark before it rained. And, how is it possible that some companies find opportunities in the time of crises, while others succumb to the danger.

The secret is that they have a well-prepared and tested Crisis Communication and Management Plan and that all the staff, including those who will deal with the media are well trained, ready to face the crises.

Who in your organisation has had the responsibility and decision making authority to create and implement an effective crises communication plan, decide when and how to initiate media coverage – and when not to-, what to do once a crises does occur and how to ensure that the media tells your side of the story?

Does your plan cover the:

  • Definition of a Crisis?
  • Anticipating of Crises?
  • Tips on creating a how-to-manual on developing and implementing a crisis communication plan?
  • Creation of Contact lists?(And upkeep)
  • The link between Emergency planning and The Crises Communication plan?
  • Designating of Spokespersons?
  • Determining the most effective message to communicate to the media and stakeholders?
  • Maintaining Control?
  • Re-establishing lost goodwill?
  • Tips on how to prepare for a Crisis or a media press conference?
  • Tips and guidelines on how to deal with Social Media? (Twitter, Facebook, Blog Wars, etc.)

Organisations such as Hospitals should begin their crisis plan with a vulnerability assessment in which the crisis communication team looks at the likelihood of certain kinds of crises and assesses the organizations ability to respond. Below are listed some common crises with categorisation.

Most hospitals may be best prepared to accommodate Class A and B crisis, spurred by legal requirements. However, many may be less able to manage class C, although preparation for Class A and B may ready the institution to manage its own “disaster.” However, few hospitals may be properly prepared for Class D.

The value in grouping crises is in providing a potential list of scenarios for which the hospital may prepare and document their crisis contingency plan.

CLASS A

  • External Natural Disasters
  • Potential Medical Challenges
  • Fires
  • Floods
  • Severe thunderstorms
  • Tornadoes

CLASS B

  • External Disasters
  • Medical Emergencies
  • Building fires
  • Explosions
  • Structural collapse
  • Chemical or radiation exposure
  • Multiple victim accidents (Le., car, bus, train, plane)
  • Disease epidemic ~ scale poisoning
  • Riots
  • Paramilitary conflicts
  • Nuclear fallout

CLASS C

  • Internal crises / Medical Emergencies
  • Fire
  • Explosion
  • Disease epidemics
  • Serial killer or rapists
  • Staff-patient criminal actions (i.e., poisoning, suffocation)
  • Multi-victim food poisoning
  • Large-scale infections
  • Structural collapse
  • Air pollution
  • Terrorist attack

CLASS D

  • Internal Crises / Non-Medical Emergencies such as Severe disruptive union activities (i.e., slow-down, walk-out, strikes)
  • Unexpected executive death
  • Bomb threats
  • Class action lawsuits
  • Consumer demonstrations
  • Malpractice and/or negligence lawsuit
  • Citations by local/state/regulatory agencies
  • Indictments by judicial agencies of hospital or medical staff
  • Fraud or Embezzlement
  • Large-scale theft
  • Staff-patient abuse
  • Supplier disruption (i.e., blood, food, drugs and other medicines, construction, power failure)
  • Celebrity patients like Mr Mandela
  • Unusual medical treatment
  • Major changes in enabling or funding legislation (i.e., changes in charter conditions, cuts/ balloons in Medical aid allocations, tax exempt status, Medical aid fraud or abuse investigation).

Every hospital in a group should be prepared to deal with emergencies (other than that by the Casualty department). It is well known that the best way to prevent the spread of remorse and misinformation is by issuing factual information as soon as possible. At the same time, a hospital must protect its own interests and the patient’s right to privacy then relay factual information in an orderly, controlled manner.

That is why the hospital’s crisis communication plan should outline a procedure for communication with the media and other stakeholders. That is why your hospital’s emergency plan and crisis communication plan should be combined and tested.

An audit and benchmarking exercise could reveal opportunities for improvement and/or provide the assurance that everything is in order.

Conclusion

There are few kinds of organizations for which PR is more important than hospitals.

Hospitals must constantly strive to earn and keep a good reputation among doctors, patients, donors (if charitable), other funding sources and broad community leadership. If a hospital is not perceived by all stakeholders as providing quality care in a responsible manner it will fail. Because of the diversity of audiences, hospital PR must address a wide range of concerns and convey information at many levels of detail. Hospital PR also has a role in supporting the satisfaction and effectiveness of employees who perform critical tasks under difficult conditions.

Hospitals are typically among the larger institutions in their communities. Therefore, almost everything they do or say is potentially important and/or controversial. Public relations should be involved at the highest strategic levels of hospital management to help guide decision-making in ways that will help accomplish long-term goals.

My one blog article – https://deonbinneman.wordpress.com/2010/06/24/an-untested-emergency-response-plan-is-a-source-of-reputation-risk/ may also spark more debate about this.

You might also be interested in this information from my blog – I have my own product which is really a primer for starting the process of developing a crisis plan in a company – see http://deonbinneman.com/services/products/how-to-write-a-crisis-plan-toolkit/ and my blog post https://deonbinneman.wordpress.com/2009/05/26/how-reputation-event-crisis-ready-is-your-organization/ that could stimulate thoughts in this regard.

Anyway, I just thought that you might find my post and questions – thought provoking. Please access my blog for more information.

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Survey: Few Companies Are Prepared to Manage a Crisis


A News release by Fleishman-Hillard on Business Wire caught my attention this morning, especially the caption – Majority of Analysts Say a Poorly Managed Crisis Causes Detraction in a Company’s Value

According to the release, the biggest mistake companies make during a corporate or operational crisis is a lack of communication and transparency with stakeholders and employees, causing a negative impact on valuations, according to a survey jointly released today by the Canadian Investor Relations Institute (CIRI) and Fleishman-Hillard Inc.

“The survey reveals that a poorly managed crisis clearly has a negative impact on a company’s share valuation, so it is imperative for IROs to be prepared”

This is the same message I have punted for the past 15 years.

The survey polled financial analysts and investor relations officers (IROs) at companies across Canada and the United States on operational and corporate crisis preparedness. It found that while many companies are mindful of the potential damage crises can cause to their sales, reputation and share value, few have an effective crisis management plan in place to deal with negative scenarios — and if they do it is likely out of date. (See some of my previous posts on my blog)

Further, the survey found that half of responding IROs from the financial services and healthcare industries claim they don’t follow a crisis communications plan at all. The survey looked at both operational crises, which are issues impacting a company’s day-to-day business, and corporate crises, issues involving a firm’s executive team or finances.

“Given the recent widely known sector crises — the 2008 financial meltdown, healthcare product recalls, extreme environmental damages, automotive sector crisis and other headline-grabbing frauds and scandals — companies need to be armed with a plan,” said Tom Enright, CIRI president and CEO. “No sector or company is immune to a crisis; having a crisis communications plan in place is simply prudent risk management.

“The survey reveals that a poorly managed crisis clearly has a negative impact on a company’s share valuation, so it is imperative for IROs to be prepared,” Enright continued. “A crisis communications plan is one of the most important tools a company can have in its arsenal.”

Yet for those who have a crisis plan in place, only 29 percent of companies update it once a year, according to the survey results. As a rule, it is best practice to update a crisis plan at least once a year to ensure the content is evolving and maintaining relevance in today’s marketplace.

Not only is there confusion around the frequency of updating a crisis communications plan, companies also struggle with its focus:

  • 85 percent of responding analysts say a corporate crisis — fraud resulting in accounting restatement — has the greatest negative impact on a company’s value.
  • But over 50 percent of responding IROs say their company builds a plan that prepares them only for an operational crisis.

“Although IROs clearly understand the impact that trust, transparency and proper disclosure can have on company valuation during a crisis, it’s apparent that most companies are unprepared to deal with the fast-moving affects of a corporate or operational catastrophe,” says Tom Laughran, senior vice president, partner and global financial communications co-chair with Fleishman-Hillard. “Timely and honest communications are essential for maintaining the trust of investors during volatile periods. In order to effectively communicate during an emergency, companies must continually examine and update their crisis plan to ensure all stakeholders have been addressed and that an efficient and actionable chain of command is in place.

When focusing on digital communications, the survey found that while many analysts and IROs recognize the potential impact that social media outlets — Twitter, Facebook and YouTube — can have on their companies, few have a crisis plan in place that incorporates social media protocols.

According to the survey, over 50 percent of responding analysts look to the corporate blog for information during a crisis, but only 17 percent of responding IROs say their companies use this tool as a channel for crisis communications. Given that less than half of responding IROs monitor social media platforms during a crisis, IROs clearly need to incorporate these tools in their plans to maintain control of the corporate message during a crisis and minimize wide-spread negativity.

An IRO’s role during a crisis is very important. As the conduit between analysts and the company, it’s imperative that IROs play a lead role in developing the communications plan. According to the survey:

  • 85 percent of responding analysts say IROs are a main point of contact for a corporate crisis specifically.
  • 55 percent of IRO respondents don’t know if the crisis communications plan is updated after a crisis.
  • 50 percent of IRO respondents don’t know if their company conducts crisis simulations.
  • Only 19 percent of responding IROs contribute to the corporate blog, which was deemed as an important source of information by responding analysts.

“Given the importance of the IRO’s role during a crisis, they need to play a much larger role in developing the crisis communications plan, executing crisis drills and regularly updating the document,” said Enright. “Their involvement in the process should be from beginning to end.”

Read more about the survey, the Canadian Investor Relations Institute & Fleishman-Hillard at http://www.businesswire.com/news/home/20110412005462/en/Survey-Companies-Prepared-Manage-Crisis

I will respond to some of these thoughts in upcoming posts. In the meantime , read these posts:

· Your Crisis Communication Response Plan is Due for Maintenance (And/Or a Rewrite) – http://bit.ly/ghxdw4

· Why You Should Plan for Crises Before They Happen – http://bit.ly/b0xDKb

· Is your company ready to deal with a Product recall? A Checklist for your convenience – http://bit.ly/8jdhh0 (Read this post in conjunction with the new Consumer Protection Act that was recently promulgated in South Africa)

· You better be Awake: Searching for Vulnerabilities – http://bit.ly/aFAFw

Deon Binneman to facilitate a Crisis Management and Communication for Reputation Protection training seminar in Beijing


I have been contracted to run a course for Marcus Evans called Crisis Management and Communication for Reputation Protection at the Grand Millennium hotel, Beijing, China 24 – 25 March.

Check out the Event Website: http://bit.ly/gcctGS

What Is The Cost Of NOT Training Management in Reputation Risk & Crisis Management?


3338374358_7a2e62c539_o Reputational risk is the risk that an activity, action or stance performed or taken by a company or its officials will impair its image in the community and/or the long-term trust placed in the organisation by its stakeholders, resulting in the loss of business and/or legal action.

Essentially all risks and all related components of the group potentially impact on reputational risk.

Think about this one for a second…

You’re the CEO of a large company with a daily operating budget that floats somewhere in the millions. Your profit margin is already pretty thin and demands all your management skills to keep things in the black. Suddenly, something absolutely crazy and totally unexpected for which even your best contingency planning didn’t prepare you hits you dead on, sinking your thin profit margin into a deep, deep sea of red ink. I’m talking billions here…

No, this isn’t a cheap attempt at dramatics. It’s a nutshell summary of what happened to the airline industry after September 11. We could argue that those are exactly the times when managers really need to remember what they learned in management school. The truth is, however, that (a) We don’t teach them how to deal with crises like that; and (b) they don’t have time to worry about soft and hard skills, etc. when their pants are on fire. All they will worry about is whether they can save the “money”, because after all that is what the shareholders will hold them accountable for.

It is in situations like these that a person will display their normal crisis management style, and unfortunately what will happen is that managers will go for quick solutions rather than proper root cause analysis. There will be a tendency to address symptoms rather than real causes.

Part of the problem lies in our training that we provide in organisations. I am not saying that the quick and dirty phenomena is happening because training departments are doing such a lousy job, at least not from the perspective of understanding what management is about.

Where departments fail is in not performing regular simulations under which crisis readiness and decision making under stress can be tested. Where training departments fail is in not providing their managers with hard nose business skills training, things to do when faced with a crisis, things to prevent smouldering crises from erupting into perceptual crises, teambuilding and decision making under conditions of severe stress, etc.

What is needed is a solid understanding of the processes that support problem solving and ethical decision making and proactive thinking while studying management struggles, confusion, dilemmas, and the moral challenges managers face. Managers need training in understanding the many elements of crisis management, including such critical areas as crisis planning and preparedness, crisis communications, security of human, physical and intellectual assets and organizational behaviour, communication management problems and strategies.

That way we can assure that our management teams can make proper and ethical decisions when times of trouble come, decisions that will rather build than destroy a company’s good name. Let me ask you a question:

  • Does your company have a crisis management plan that has been truly tested and simulated in the past few months?
  • Does Crisis Management & Communication training feature in your training calendar for the year?

Unless it does, your company is a long way off from being adequately prepared. Don’t be upset if quick and dirty solutions are part of your organisation’s behaviour patterns. Sometimes incidents happen due to unfortunate oversight. Most of these times I believe they happen because management have not been sensitised to the importance of managing a company’s greatest asset – its reputation.

In many cases Reputational damage could have been prevented had management received training in the management of reputation.

Prevention is normally better than cure. Management teams should receive training in what reputation is, why reputation is an asset and a risk, the various drivers of reputation, how it is measured and destroyed, strategies for building, sustaining and protecting reputation, corporate governance, ethics and media understanding and media survival skills. It does not matter if you are working for Government, a Corporate or an NGO – Reputation remains the same and has the same impact.

Often Management asks about the cost of training. Why not consider the flipside of the coin? What is the cost of NOT training management in reputation understanding?

The question to ask is whether Organisation’s do enough to sensitise their management teams. BP did most of the above, and yet, even that wasn’t enough. Now that is even more scary!

If you would like to learn, how to prevent reputation risk emerging in your organisation, or would like to hone your crisis management skills, you would not want to miss this training event coming up.

What: Reputation Defence & Protection (Reputation Risk Mitigation) Masterclass
This two-day Masterclass provides comprehensive and practical coverage of all aspects on how to protect and defend an organisation’s reputation, and is based on more than 25 years research and experience on how to protect business reputations. The title word includes the verb defend. The reason – the word defend is generally defined as to take measures to make or keep safe from danger, attack or harm, and implies the actions of protecting, safeguarding, shielding, supporting or preserving. The requirement to defend can be associated with an individual, group, place or thing, and can be associated with honour, reputation, territory, assets and allies (stakeholders). It offers not only international best practices but also provides guidance how to implement a reputation risk management and protection framework. Worldwide reputation risk is seen as the highest-order risk and most dangerous to organizations, because of its volatility and unpredictability. Part of the problem is that some regard it as a strategic risk whilst others see it as a consequence of a risk. The way an organization therefore defines it, will have a material impact on how it will be mitigated and treated. Because reputation risk is volatile, unpredictable and often unquantifiable, it often happens that; what an organization regards as a small incident or issue, erupts and has a major impact, because stakeholders viewed it differently. Understanding the systemic interplay of factors is therefore vital in understanding this risk. If you’re responsible for ensuring that your organisation responds to and survives any form of reputation risk event – this Masterclass covers all the key steps necessary.
When: Tuesday, July 20, 2010 11:00 AM to Wednesday, July 21, 2010 12:00 PM
Where: Hotel Indaba

Fourways
Johannesburg, Gauteng   South Africa