Presented by Dan Pyle Millar, Ph.D., APR, Fellow PRSA

49th Annual Human Resources ConferenceIndiana Chamber of Commerce

May 7, 2013Indianapolis, Indiana

Planning to Recover

Major Thoughts to Remember1. You company WILL EXPERIENCE a crisis; overtime several.2. PLANNING INCREASES your chances of managing the crisis and the communication during and following the episode.3. COMMUNICATING with stakeholders IMPROVES your ability to manage the episode and recover from it.

Definition and Types of Crises. . . A significant disruption of an

organization’s normal activities which stimulates negative stakeholder reaction threatening the organization.

Types of Crisissudden perceptualsmoldering bizarre

Crisis Characteristics• Significant disruption of operations• Adverse effect on normal operations• Resolution exceeds the organization’s

capacity to respond• Generates substantial negative

stakeholder reaction• Generates extensive public scrutiny• Generates extensive news coverage• Worldwide coverage via social media

News 2002-2011

Crisis Origins

Sudden vs Smoldering

Crises Happen! 1990

2011• facility damages 5.5% 8.0%• casualty accidents 4.8% 9.0%

(4)• environmental 7.8% (4) 1.0%• class action lawsuits 2.2% 7.0% • consumer action 2.8% 5.0%• defects & recalls 5.4% 5.0%• executive dismissal 1.3% 1.0%• discrimination 3.3% 3.0%Source: Institute for Crisis Management

All Industries: 1990-2011

Crises Happen!1990

2011• financial damages 4.2% 8.0%• hostile takeover 2.6% 0.0%• labor disputes 10.3% (3) 8.0% • mismanagement 24.1% (1) 11.0%

(2)• sexual harassment .4% 2.0%• whistle blower 1.1% 3.0%• white collar crime 20.4% (2) 19.0%

(1)• workplace violence 3.8% 10.0%

(3)Source: Institute for Crisis Management

All Industries: 1990-2011

Crisis Categories

Changes 2010-2011

Adverse Effects of Crises• loss of sales and

profits• loss of jobs• tarnished

reputation• legal/consumer

action

• increased operating expense

• decreased employee morale

• loss of competitive strength

• government intervention

• mistrust of management

Harsh Realities of Crises•Most crisis situations can be PREDICTED and PREVENTED; those that can’t be avoided can be minimized•Serious problems don’t become a “crisis” until the PROBLEM ESCAPES THE ORGANIZATION

•The longer a crisis goes on, the MORE DAMAGE to attendance, earnings, stock price, morale, competitive position and trust in management•MANAGEMENT DENIAL is the biggest obstacle to effective crisis management•The primary concern in crisis communication management is the COURT OF PUBLIC OPINION not the court of law

Major Thoughts to Remember1. You company WILL EXPERIENCE a crisis; overtime several.2. PLANNING INCREASES your chances of managing the crisis and the communication during and following the episode.3. COMMUNICATING with stakeholders IMPROVES your ability to manage the episode and recover from it.

Strategic Objectives1. Keep the business running

• every hour lost = lost revenue• return to normalcy quickly = cash flow and stakeholder morale• work and work environment helps

employees adjust and adapt2. Minimize the damage

• reputation diminished = reluctance to buy, invest, supply, work for

• increased distrust of management• conserve fiscal, physical and human

capital

Strategic ObjectiveReputation creation

Reputation maintenanceCrisis

Reputation restoration

Successful Unsuccessful

Restructure Failure

Planning to RecoverBEFORE:

1. Assess your vulnerabilities2. Create a plan including:

a. Composition and responsibilities of crisis team to monitor the organization before crisis, make decisions during crisis, and guide rebuilding after.

b. Means to work in temporary quarters including at home

c. Names, contact information of key people including management, experts, security, and media contacts.

Planning to Recover

d. Procedures for centralizing information flow. e. Communication kits on personnel/organization including photos, video, backgrounders, sample release forms. f. Key message points grounded in the mission of the organization.3. Prepare management for open communication with all audiences.

DURING:4. Centralize the two-way flow of information.5. Inform affected publics in the most effective, efficient form.6. Respond to stakeholders truthfully, openly, quickly, informatively.7. Treat all stakeholders fairly.8. Keep all audiences updated as the crisis evolves.9. Monitor print, broadcast media, and social media; keep records on a timeline.

Planning to Recover

Planning to RecoverAFTER:10. Debrief everyone involved in the crisis.11. Write a brief report of causes, responsibilities,

successes, failures, and recommendations for improvement.

12. Recognize and reward those who contributed to the management of the crisis.

13. Follow through on recovery plans to rebuild trust, reputation, employee morale, and reduce stress.

Major Thoughts to Remember1. You company WILL EXPERIENCE a crisis; overtime several.2. PLANNING INCREASES your chances of managing the crisis and returning to “normal”

3. COMMUNICATING with stakeholders IMPROVES your ability to manage the event and recover from it.

Preparation to CommunicateHas NOT Changed

Substance of CommunicationConfirmationContainmentCompassionCooperation with outside agenciesCorrection

Preparation to Communicate Has NOT Changed

Create a communication plan INDEPENDENT but INTEGRATED with the organization’s operational and business and continuity plans.•Find your vulnerabilities or threats•Write a plan responding to those threats•Create a message platform•Train personnel to use the plan•Train your spokesperson(s)•Exercise/update the plan (regularly)

You Can’t Hide!

Once the crisis escapes the organization . . .• world knows within minutes

• pack professional and amateur journalism results

• 24/365 news coverage

• immediate world-wide distribution: broadcast or Internet, reporters or blogs

• instant “experts” and “authorities” will comment

9/11 Raised the Bar

The Giuliani Standard:•visible•spoke shortly after the event•spoke with target audience (constituents)•provided useful information (updated)•expressed sorrow, grief, empathy•expressed positive perspective (action and attitude)

Develop a Message Platform

Develop your message platform for each potential threat:•based on organizational purpose“we design innovative software solutions for businesses”•organization-general, crisis-specific“our hearts go out to the families of those injured”•phrased in compelling manner andconnected to the audiences’ need for information“all employees are safe and accounted for”“on-site counseling will be available--as long as anyone needs it”

Use Your Message PlatformFirst words FRAME the story

•reduces confusion•give direction for future comments and activities

*shapes your perspective on the event“we are deeply saddened; we lost family too”

*emotional connection to publics; compelling

“they were a sight for sore eyes”*frame for future statements

“we are cooperating with investigating agencies”*platform for future actions

“a scholarship fund has been established”“we’ll be back to work on Tuesday”*saying nothing increasing confusion and invites speculation

NOT ‘no comment’

Use Current Technology

• Web site /Intranet site• Blogs, tweets, webcasts• Hot Lines/800 numbers• Facebook, Twitter,etc.• Broadcast Email• Voicemail automated• Cell Phones, tablets• Texts• Broadcast media

Smoldering Crisis: Avian Flu1. Influenza Pandemics strike every 30-40 years since 1500

•1918: “serious” 1.5 million in US died; 50 million worldwide

•1957: “moderate” 70,000 in US died •1968: “moderate” 35,000 in US died

2. Healthcare has not kept up with population nor pandemic demands3. WHO and CDC warn: Avian Flu a greater threat than SARS or Y2K4. CDC says “no question we’ll have a pandemic”

Impact of PandemicEmployees too ill to work

• 20-40% ill, 5% will die• Indiana with 6 million = 1.5 million ill, 75,000 will die

Employees and customers stay home as preventative, or ordered to

Vendors unable to supplyQuarantine stops deliveries

Impact of Pandemic

Healthcare facilities strainedPublic infrastructure fails

ElectricitySnow removal and road workFire and police

Investors panicWorld Bank expects “worst depression ever”

although short durationPotential social upheaval

Strategic Objectives

Prevent loss of employee confidence and morale

Restore operations quicklyRestore customer, vendor confidenceCooperate with local, state and federal authorities to return to “normal” quickly

Key Issues in PlanningFinancial: cash flow & bill payingPersonnel: US norm--work sick!

quarantine and ordered “stay home”sick leave paid sick days caregiver daysfuneral days

Legal:attorneys review all contractsHR review and plan exceptions for employee absence

policiesOperations: keep the business running as efficiently, effectively and ethically as possible

Items on the To-Do List1. Prepare for increase/decrease demand

of your product or service2. Prepare operations for disruption of

just-in-time delivery3. Prepare for diminished workforce4. Plan for domestic and international travel restrictions5. Set employee access rules6. Determine extent of employee

assistance with healthcare and social services

Items on the To-Do List7. Set policies of preventing spread of disease in the workplace8. Establish flexible worksite and hourspolicies and reporting9. Arrange for communication with employees, vendors, distributors, customers (e.g., time, place, technology)10. Involve employees in planning11. Set employee access rules12. Initiate planning with insurance and health plan providers, local healthcare facilities

Major Thoughts to Remember1. You company WILL EXPERIENCE a crisis; overtime several.2. PLANNING INCREASES your chances of managing the crisis and the communication during and following the episode.3. COMMUNICATING with stakeholders IMPROVES your ability to manage the episode and recover from it.

Best Advice

Prepare relentlessly!Rudy Giuliani, Leadership, 2002

Communicate consistently!Kay and Dan Millar, 2003

Contact Me

E-mail: dpmillar@sbcglobal.net

Identify yourself in Subject Line:HR Conference 2013