Supplementary Notes Crisis Management 1

Crisis Management Crisis Management

Supplementary Notes Crisis Management 2

When written in Chinese, the word “crisis” is composed of two characters - one represents

danger, and the other represents opportunity.

- John F. Kennedy

wei ji

Supplementary Notes Crisis Management 3

What is a Crisis?What is a Crisis? A significant, unpredictable,

disruptive event that has potentially negative results

The event stimulates media coverage Public scrutiny may affect the

company’s normal operations The event may significantly damage

the company’s reputation

Supplementary Notes Crisis Management 4

Assumptions of CrisisAssumptions of Crisis

Crisis can be anticipated Companies should audit their internal

processes to check for potential crisis Tell-tale signs can lead to crisis

detection Crisis can be prevented

Once potential crisis is detected, the company can take proper measures

Correcting it at an early stage will prevent a major one from developing

Supplementary Notes Crisis Management 5

Assumptions of CrisisAssumptions of Crisis

Crisis can be controlled Even if prevention is not possible, the

company can manage the crisis one step at a time till completion

Crisis can be turned to an advantage If the company takes the right steps,

the end results may be positive A crisis will run its course if left

untreated

Supplementary Notes Crisis Management 6

Examples of CrisesExamples of Crises Natural disasters, e.g. Katrina Public health and safety, e.g. SARS Labor relations, e.g. employee strikes Product failure, e.g. Intel pentium

computer chip Corporate mismanagement, e.g.

sexual harassment

Supplementary Notes Crisis Management 7

Examples of CrisesExamples of Crises Financial calamities, e.g. bankruptcy Individual actions, e.g. embezzlement Convention events, e.g. hotel fire,

speaker collapse National security, e.g. Singapore

Airlines hijack

Supplementary Notes Crisis Management 8

Four Stages of a CrisisFour Stages of a Crisis

1. The hidden crisis Like a disease invading a body Serious issues the company is not

completely aware of

2. The pre-crisis When hidden issues are not resolved The belief that the problem will solve

itself over time

Supplementary Notes Crisis Management 9

Four Stages of a CrisisFour Stages of a Crisis

3. The crisis Entire system in the company is in

complete chaos Outside help is not trusted or sought

4. The post-crisis The company can now discover what

went wrong Companies should use this stage to

reevaluate every potential crisis

Supplementary Notes Crisis Management 10

Crisis Management Crisis Management

1. Determine the crisis potential2. Develop appropriate crisis teams

and centers3. Write a crisis management plan4. Develop a communication strategy5. Practice and revise the plan

Supplementary Notes Crisis Management 11

Communication StrategyCommunication Strategy

Determine the audience that needs information

Determine who will be the spokesperson for the company

Determine the appropriate communication style, e.g. quick, candid, positive

Determine the appropriate timing Determine whether to use proactive or

reactive media approach, e.g. proactive – contact the media before something bad occurs

Supplementary Notes Crisis Management 12

Important LessonsImportant Lessons Crisis is often destructive if not managed

properly Communication needs are at the heart of

all organizational crises Crises can be anticipated, prevented,

controlled and turned to an advantage A proactive approach to media relations is

more successful than a reactive one

Supplementary Notes Crisis Management 13

THINK. KNOW. ACTTHINK. KNOW. ACTTHINK. KNOW. ACTTHINK. KNOW. ACT

Key to success…Key to success…

Supplementary Notes Crisis Management 14

Your HomeworkYour Homework

Think of a business leader in today’s context, who may be your role model.

Why do you admire him or her? What are the distinct leadership

styles? How has he/she contributed to the

success of his/her company?