Crisis management, in contrast with Business Continuity, involves dealing – besides the Operational Risk Management – with a threat once it occurs. More explicitly, it consists of the processes by which an organization deals with a (major) event that threatens to harm the assets of an organization, its critical activities, its resources, image, reputation and stakeholders. It is a discipline within the broader context of management, consisting of skills and techniques required to identify, assess, understand, and cope with a serious situation, especially from the moment it first occurs to the point that recovery procedures start. Here are some recent and well publicized crisis incidents from the global business scene:

  1. Natural disaster (Tepco and the Japan earthquake & tsunami, 2011)
  2. Accidents (Cyprus Electricity Generation Plant, 2011)
  3. Technological crises (MacAfee, 2010)
  4. Confrontation (Greenpeace vs. Shell, 1995)
  5. Malevolence (Jérôme Kerviel and Société Générale, 2008)
  6. Crisis of skewed management value (Enron, 2002)
  7. Crisis of deception (Andersen, 2003)
  8. Crisis of management misconduct (DSK case & IMF, 2011)

We consider Crisis Management as an opportunity for protecting the value of a business and fortifying its response mechanisms towards the internal and external threats. During any type of crisis, pressure is not only a cause but also a consequence and management can perform better and protect the “shareholders & stakeholders value” if a “crisis as opportunity” mindset is adopted to lead the organization out of the crisis.

In general, management executives understand Crisis Management as a communications and public relations exercise and often assume a “reactive” strategy. Not only the firm’s reputation with shareholders, financial status and existence are threatened but potential damage to reputation can result from how crisis is managed! Crisis Management can assist a business to immediately address both the damage and implications for the firm’s present and future conditions, as well as opportunities for improvement.

The credibility and reputation of a business is heavily influenced by the perception of their responses during crisis situations. The organization and communication involved in responding to a crisis in a timely fashion makes for a challenge in businesses. There must be open and consistent communication throughout the hierarchy to contribute to a successful crisis communication process.

OUR APPROACH

Crisis Management consists of:

We use the “4-elements” analysis to define a crisis:

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