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integrated crisis integrated crisis management: management: building a framework building a framework for unified response for unified response

How to Create the Most Resilient How to Create the Most Resilient Team in Crisis ManagementTeam in Crisis Management

Kristen Hartwigsen, Nike Inc.Kristen Hartwigsen, Nike Inc.

Global Business ContinuityGlobal Business Continuity

objectivesobjectives

• Overview the Nike Global Business Continuity

Program framework

• Define Integrated Crisis Management

• Outline internal integration

• Outline external integration

• Integrate testing and training in the culture

nike mission statementnike mission statement

To bring inspiration and innovation to every

athlete in the world.* *If you have a body, you are an athlete.

To bring inspiration and innovation to every To bring inspiration and innovation to every

athlete in the world.* athlete in the world.* *If you have a body, you are an athlete.*If you have a body, you are an athlete.

• Blue Ribbon Sports (BRS) was founded in January, 1964 by Bill

Bowerman and Phil Knight.

• In 1972, BRS introduced a new brand of athletic footwear and

changed the company name to Nike, named for the Greek

winged goddess of victory.

• In 1973, Steve Prefontaine becomes the first major track athlete

to wear Nike brand shoes.

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nike, inc. statisticsnike, inc. statistics

• FY 06 Revenue: $15 billion

• Employees: 25,000 Worldwide

• Headquarters: World - Beaverton, OR; Europe - The Netherlands

• Major Distribution Centers: Memphis, TN; Belgium; Japan; Korea

• Retail Stores: Niketowns; Nike Factory Stores; NikeWomen

• Subsidiaries: Cole Haan, Nike Bauer, Hurley, Converse, Exeter, and Nike IHM

Nike WHQ

Beaverton, Oregon

a matrix organizationa matrix organization

footwearfootwearfootwear

USUS

US

apparelapparelapparel

equipmentequipmentequipment

golfgolfgolf

EM

EA

EM

EA

EM

EA

asia

pa

cific

asia

pa

cific

asia

pa

cific

am

erica

sa

me

rica

sa

me

rica

s

su

bsid

iarie

ssu

bsid

iarie

ssu

bsid

iarie

s

VP, APAC EquipmentVP, APAC Equipment

reports toreports to

Global EquipmentGlobal Equipment

APAC RegionAPAC Regionca

teg

orie

sca

teg

orie

s

regionsregions

Every department at Nike Every department at Nike

reports to two business units reports to two business units

–– the category and the the category and the

regional management.regional management.

importance of integrationimportance of integration

• International Coal Mine Tragedy– “A top coal company official expressed regret Wednesday that the

families of the 12 dead miners were mistakenly led to believe for three hours that their loved ones were alive.”

• Hurricane Katrina– “The Federal government should work with its homeland security

partners in revising existing plans, ensuring a functional operational structure - including within regions - and establishing a clear, accountable process for all National preparedness efforts.”

• Kim Family Rescue– “The duties of OSP and the duties of involved Sheriff’s Offices were not

clearly understood… OSP took the lead in the coordination of investigation information…this was appropriate until the search area could be defined…at that point, the Josephine County Sheriff’s Office should have assumed operational control for the search mission.”

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strategy

The strategy was to develop

a simple framework,

capitalize on existing

resources, and drive

standards, starting with

NIKE’s global crisis

management infrastructure.

strategystrategy

The strategy was to develop

a simple framework,

capitalize on existing

resources, and drive

standards, starting with

NIKE’s global crisis

management infrastructure.

inception

The Global Risk

Management department

began NIKE’s business continuity program in

June, 2005 under the

sponsorship of the CFO.

inceptioninception

The Global Risk

Management department

began NIKE’s business continuity program in

June, 2005 under the

sponsorship of the CFO.

purpose

The purpose was to

formalize NIKE’s crisis management capabilities

and to ensure “tested

recoverability” for NIKE’s

most critical facilities and

global functions.

purposepurpose

The purpose was to

formalize NIKE’s crisis management capabilities

and to ensure “tested

recoverability” for NIKE’s

most critical facilities and

global functions.

program historyprogram history

program scopeprogram scope

crisis managementcrisis managementcrisis management

ObjectivesObjectives

StandardsStandards

TemplatesTemplates

ToolsTools

TrainingTraining

TestingTesting

MetricsMetrics

ReportingReporting

Business

Recovery

Programs

BusinessBusiness

Recovery Recovery

ProgramsPrograms

planningplanning

Business RecoveryBusiness RecoveryBusiness Recovery

Immediate ResponseImmediate ResponseImmediate Response

MinutesMinutes HoursHours DaysDays WeeksWeeks MonthsMonths

Immediate

Response

Programs

Immediate Immediate

Response Response

ProgramsPrograms

crisiscrisis

business continuitybusiness continuity

executionexecution

impact to stockholdersimpact to stockholders

In today’s global,

24x7 economy,

an error in crisis

management

could lead to

devastating

financial effects.

In todayIn today’’s global, s global,

24x7 economy, 24x7 economy,

an error in crisis an error in crisis

management management

could lead to could lead to

devastating devastating

financial effects.financial effects.

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crisis management frameworkcrisis management framework

FACILITY TEAMS (IMMEDIATE RESPONSE AND BUSINESS RECOVERY)FACILITY TEAMS (IMMEDIATE RESPONSE AND BUSINESS RECOVERY)FACILITY TEAMS (IMMEDIATE RESPONSE AND BUSINESS RECOVERY)

Facility Evacuation

Internal First Response

External First Response

First Damage Assessment

Other Functional AreaDistribution

Center

EXECUTIVE CRISIS MANAGEMENT TEAMEXECUTIVE CRISIS MANAGEMENT TEAMEXECUTIVE CRISIS MANAGEMENT TEAM

CORPORATE ECMT US; EMEA; APAC; Americas; and/or Sub ECMTFootwear; Apparel; Equipment; and/or Golf ECMT

Incident Management

CommunicationsBusiness Recovery

SITE CRISIS MANAGEMENT TEAMSITE CRISIS MANAGEMENT TEAMSITE CRISIS MANAGEMENT TEAM

Incident Management Communications Business Recovery

OPERATIONAL CRISIS MANAGEMENT TEAMOPERATIONAL CRISIS MANAGEMENT TEAMOPERATIONAL CRISIS MANAGEMENT TEAM

CORPORATE OCMT US; EMEA; APAC; Americas; and/or Sub OCMTFootwear; Apparel; Equipment; and/or Golf OCMT

Incident Management

CommunicationsBusiness Recovery

NIKE BOARD OF DIRECTORSNIKE BOARD OF DIRECTORSNIKE BOARD OF DIRECTORS

integrated process flowintegrated process flow

OC

MT

(Q

uo

rum

)

Cri

sis

OCMT

SCMT

Joint Call

CORP

OCMT

USSC

OCMT

SCMT

Facility

CORP

OCMT

USSC

OCMT

SCMT

Facility

OCMT

SCMT

Joint Call

OCMT

SCMT

Joint Call

Human Resources

Communications

Operations

GIT

Human Resources

Communications

Operations

GIT

Time

integrating with communicationsintegrating with communications

• Ensure that all front-facing employees have an initial statement and are provided with subsequent statements.

• Establish a method to receive information into the Crisis Management Center (CMC.)

• Determine the process for analyzing and presenting information to crisis management teams.

• Distribute CMC statements on a established timeline.

• Determine web strategy and craft initial statements before the crisis.

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integrating with human resourcesintegrating with human resources

• Formalize incident policies and procedures beforehand, as possible:

– Pay Policies

– Extended Benefits

– Alternate Work Plans

– Child Care

– Time Off

– Reassignments

– Next of Kin Notification/ Death Benefits

• Determine and drill on life safety and headcount procedures regularly.

integrating with operationsintegrating with operations

• Pre-determine the range of solutions that can be used to recover operations over time.

• Understand ramp-up times for business recovery solutions and accommodate during the immediate response phase.

• Develop damage assessment and salvage processes.

• Halt stock trading as a means of protecting shareholder value in the event of a really catastrophic event.

• Determine metrics to use

in order to assess overall

impact to the business.

integrating with governmentintegrating with government

• Participate in government emergency response exercises; involve these organizations in corporate simulations.

• Give responders access to corporate facilities to learn floor plans.

• Train government responders on corporate crisis management processes.

• Ensure corporate teams are at familiar with the ICS/NIMS structure.

• Establish relationships with local public response organizations.

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integrating with other businessesintegrating with other businesses

• Participate in local, geographic organizations.

• Create focus groups with other companies based on size, industry, or corporate cultures.

• Exchange information with business partners on corporate crisis management processes and work together to create viable business recovery plans.

• Leverage relationships with existing business partners to include Crisis Management.

OREGON CONTINGENCY

PLANNERS ASSOCIATION

a responsea response--throughthrough--recovery modelrecovery model

Phase 1Phase 1

SStabilize the tabilize the SituationSituation

Immediate Response

Phase 2 Phase 2

MMobilize and obilize and RestoreRestore

Business Recovery

Phase 3Phase 3

AActivate ctivate Critical PlansCritical Plans

Business Recovery

Phase 4Phase 4

RRestore All estore All FunctionsFunctions

Business Recovery

Phase 5Phase 5

TTransition to ransition to NormalNormal

Business Recovery

testing the frameworktesting the framework

• In September, 2007 the Nike Crisis Management

Simulation was built to

– Validate crisis management notification systems and

procedures; and

– Exercise the abilities of the Corporate and USSC OCMTs to effectively coordinate a unified command structure.

• The scenario included a 6.8 earthquake which affected

the Wilsonville, OR DC. Fatalities, Injuries, and 80%

facility damage occurred.

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simulation response timelinesimulation response timeline

8:12 am8:12 am

Wilsonville (W)

Immediate Response

Team Activated

8:40 am8:40 am

Corporate OCMT

Lead Quorums –

OCMT Activated

10:52 am10:52 am

Call Adjourns

Functional Areas

Break Out

8:30 am8:30 am

W Incident

Commander Calls

SCMT Lead

8:45 am8:45 am

Corporate OCMT

Meets at EOC; USSC

OCMT Activated

11:10 am11:10 am

Second Conference

Call; Updates from

Functional Areas

8:31 am8:31 am

W SCMT Activated;

Incident Commander

Calls 671-OCMT

9:17 am9:17 am

First Call Corporate

OCMT/USSC

OCMT/W SCMT

11:37 am11:37 am

USSC OCMT Begins

Reciprocal Strategy

Analysis

8:35 am8:35 am

W SCMT Calls

OCMT Lead

9:46 am9:46 am

Memphis SCMT

Self-Activates

12:14 pm12:14 pm

Simulation

Concludes

training is keytraining is key

• Create global quick-reference materials for team members to carry at all times.

• Implement the same team structure, processes, and tools in every area of the business.

• Ensure facilitators are the experts in the Crisis Management process and link different levels of crisis management teams together

• Know the corporate resources throughout the organization

• Incorporate more teams into testing as the program matures

some final advicesome final advice

• Athletes spend a lifetime

training for an event that

may not occur.

• In competitive running,

every step is critical to a

successful finish.

• The faster sprinters are not

always the best on the relay

team.

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BUSINESS CONTINUITY

kristen hartwigsenkristen hartwigsen

senior business continuity analystsenior business continuity analyst

nike, inc.nike, inc.

One Bowerman Drive

Beaverton, OR 97005

503.532.2779

kristen.hartwigsen@nike.com