The potential problems arising from large, multi-jurisdictional product recalls, catastrophic incidents or accidents involving well-known brands have been well covered by the media. Speed of communication today means that we have instant access to more information and potential mis-information than ever before.
The key message for businesses is that unless they have robust risk assessment, management and decision making processes in place, issues can be difficult to contain, escalate easily into crisis and have potentially catastrophic commercial consequences.
The most effective crisis management takes place before a problem arises. Some of the biggest potential crises have been identified and dealt with at an "incubation" stage. This is effective crisis management and to achieve, requires an organisational culture that is constantly vigilant for potential crises, has open lines of communication through all levels of management, a willingness to face and address unpalatable issues and an ability to make swift clear decisions.
It also does not aid effective crisis management when there is a culture of a hierarchical approach to management and a lack of open communication. Where this exists, more junior staff who may be better placed to spot the early signs of a potential crisis feel unable to point out such signs. As a result, problems slip under the radar and remain unresolved until they explode into crisis. It is much better to manage these issues early on.
It is not necessarily the reality of how a business manages a crisis that will determine how well it emerges on the other side, it is often how the organisation is perceived to have managed the crisis: in certain circumstances a crisis can morph into a very public trial of management competence. Get it right and an organisation's reputation and brand value can be enhanced; get it wrong and serious – sometimes terminal damage – can result.
What happens before a crisis
Encouraging a culture of openness and honesty to avoid potential issues being missed, developing effective crisis management plans and processes, and training those likely to be part of a crisis response team – will play a huge part in determining the fate of the organisation in the event of a crisis. Recovering from such events require continued communication and action to regain the trust of those affected.
There have been enough recent examples of poor crisis management (BBC over Savile, BP, Toyota) to persuade prudent businesses to recognise the impact that crises can have on long-term reputation, and to take steps to protect themselves through effective crisis management planning.
If you have any questions please contact Tristan Meears-White, Partner.This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.