CRISIS MANAGEMENTCRISIS MANAGEMENTEng.Ahmed Ali El-KosairyEng.Ahmed Ali El-Kosairy

Eng.aelkosairy@gmail.comEng.aelkosairy@gmail.com

Crisis ManagementCrisis Management

Crisis managementCrisis management is the process by which is the process by which an organization deals with a major an organization deals with a major unpredictable event that threatens to harm unpredictable event that threatens to harm the organization, its stakeholders, or the the organization, its stakeholders, or the general public general public

Elements of a CrisisElements of a Crisis

Three elements are common to most definitions Three elements are common to most definitions of crisis: of crisis:

(a)(a)a threat to the organization, a threat to the organization,

(b)(b) the element of surprise, the element of surprise,

(c)(c)a short decision time a short decision time

Elements of a CrisisElements of a Crisis

• Crisis management & risk management

• In contrast to risk management, which involves assessing potential threats and finding the best ways to avoid those threats, crisis management involves dealing with threats before, during, and after they have occurred. 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

Crisis management - 1Crisis management - 1

Crisis management consists of:Crisis management consists of:

• Methods used to respond to both the reality Methods used to respond to both the reality and perception of crises and perception of crises

• Establishing Establishing metricsmetrics to define what scenarios to define what scenarios constitute a crisis and should consequently constitute a crisis and should consequently trigger the necessary response mechanisms.trigger the necessary response mechanisms.

• CommunicationCommunication that occurs within the that occurs within the response phase of emergency management response phase of emergency management scenarios scenarios

Crisis Management - 2Crisis Management - 2

The credibility and reputation of organizations The credibility and reputation of organizations is heavily influenced by the perception of is heavily influenced by the perception of their responses during crisis situations their responses during crisis situations

Crisis Management - 3Crisis Management - 3

* respond to a crisis in a timely fashion makes * respond to a crisis in a timely fashion makes for a challenge in businesses. for a challenge in businesses.

* must be open and consistent communication * must be open and consistent communication throughout the hierarchy to contribute to a throughout the hierarchy to contribute to a successful crisis communication process.successful crisis communication process.

Types of CrisesTypes of Crises

• Natural disasters // Natural disasters // fires,earthquakes, volcanic eruptions, fires,earthquakes, volcanic eruptions, tornadoes and hurricanes, floods, tsunamis, storms, etc...tornadoes and hurricanes, floods, tsunamis, storms, etc...

• Technical breakdowns // Technical breakdowns // IPS , MicrosoftIPS , Microsoft

• Human breakdowns // Human breakdowns // employeesemployees

• Challenges // Challenges // ww2 England , USA ww2 England , USA

• Organizational misdeeds Organizational misdeeds

• Rumors // PRumors // P&G &G Procter & Gamble logo, Intelligences Procter & Gamble logo, Intelligences

Products:CamayGilletteHead & ShouldersHerbal EssencesPantenePert Plus ArielBonuxBraunDownyTide

P&G Crisis

Crisis ManagementCrisis Management

Crisis management model Crisis management model - - Gonzalez-Herrero Gonzalez-Herrero and Pratt 95and Pratt 95

There are 3 phases in any Crisis Management There are 3 phases in any Crisis Management as shown below :as shown below :

1)The diagnosis of the Crisis or the danger 1)The diagnosis of the Crisis or the danger signals.signals.

2)Choosing appropriate Turnaround Strategy.2)Choosing appropriate Turnaround Strategy.

3)Implementation of the change process and its 3)Implementation of the change process and its monitoring.monitoring.

Crisis ManagementCrisis Management

Crises of organizational misdeedsCrises of organizational misdeeds

- when management takes actions it knows will - when management takes actions it knows will harm or place stakeholders at risk for harm harm or place stakeholders at risk for harm without precautions without precautions

Crisis ManagementCrisis Management

Types of crises of organizational Types of crises of organizational misdeeds:misdeeds:

- crises of deceptioncrises of deception

- crises of management .crises of management .

Contingency PlanningContingency Planning

a plan devised for an outcome other than in the usual a plan devised for an outcome other than in the usual (expected) plan.(expected) plan.

when an exceptional risk that, though unlikely, would when an exceptional risk that, though unlikely, would have catastrophic consequences.have catastrophic consequences.

Example: “suppose many employees of a company Example: “suppose many employees of a company are traveling together on an aircraft which crashes, are traveling together on an aircraft which crashes, killing all aboard.”killing all aboard.”

The plan may also include standing policies to The plan may also include standing policies to mitigate a disaster's potential impact.mitigate a disaster's potential impact.

TOYOTA – TOYOTA – CRISIS MANAGEMENT FAILURECRISIS MANAGEMENT FAILURE

Toyota’s communication Toyota’s communication strategy: strategy:

““Too little, too late”Too little, too late”

Beyond the quality problemBeyond the quality problem

Toyota mismanaged the crisis Toyota mismanaged the crisis

TOYOTATOYOTABasic Rules ViolatedBasic Rules Violated

• For senior mgmt: For senior mgmt: crises must become their crises must become their #1 priority immediately.#1 priority immediately.

• Sticking accelerators in 2008 - not treated as Sticking accelerators in 2008 - not treated as a serious mattera serious matter

TOYOTATOYOTABasic Rules violatedBasic Rules violated

Find facts & solutions fast:Find facts & solutions fast:

- Toyota managers at first in denial Toyota managers at first in denial

- accepted a ‘patch’ (remove floor mats), not accepted a ‘patch’ (remove floor mats), not solution solution

- when crisis exploded -- engineering when crisis exploded -- engineering solution/stopped productionsolution/stopped production

- Even today no one outside of Toyota knows Even today no one outside of Toyota knows what the real problems are – open to what the real problems are – open to speculation and rumorsspeculation and rumors

TOYOTA TOYOTA Basic rules violatedBasic rules violated

Communicate fully and accurately:Communicate fully and accurately:

- to all constituents to sustain trust to all constituents to sustain trust

- maintain trust with a recallmaintain trust with a recall

What Toyota did: What Toyota did:

hushed problem and hoped it go awayhushed problem and hoped it go away