Beruflich Dokumente
Kultur Dokumente
Crisis Management
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2 Crisis, What Crisis?
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4 Planning for Crisis
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6 Leadership in Crisis
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8 When Disaster Strikes
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10 Communicating Crisis
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11 Reputation in Crisis
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13 Learning from Crisis
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14 In Crisis ... The
Unofficial Version
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15 Crisis Assessment
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16 References &
Further Reading
CRISIS MANAGEMENT
The high-profile terror attacks that make up the public perception of crisis are a
relative rarity: most crises come not as bolts from the blue but as ‘problems’ - and
often it’s mismanagement of their early stages that escalates them to crisis point.
G preventing the crisis in the first place: how to spot the tell-tale signs of a
corporate disaster waiting to happen
BULLETPOINT
FOCUS REPORTS G planning: for crises ranging from product recalls to floods
G the element of surprise: how to respond to what you could never have predicted
I N S I G H T
G the who and how: what makes a good crisis leader? and how do they get their
INSPIRATION teams behind them?
SOLUTIONS G defending your corporate brand: how to fight back against attacks on your
company’s reputation
K N O W L E D G E
IN JUST 16 PAGES G avoiding repeats: how to learn from crises
The report ends with a diagnostic guide for your own crisis plan. Is yours fit for
purpose? The guide will help you fill the gaps now - before crisis hits.
Chapter 1
A QUESTION OF ETHICS
Crisis indicators Astra USA: just as pressure
reduces inhibitions and shows
Long before it’s written on the bottom line, managers should be alert to not-yet-visible signs that people as they really are, a crisis
things are starting to go wrong - they act as the corporate polygraph, testing stress responses: activates a company’s core
beliefs and reveals its ethical
identity both in terms of financial
G root causes of organisational (and human) behaviour: eg distrust, bureaucracy and and workplace wellbeing - ‘that
low performance expectations; indicate trajectory of the firm is downward and symptomatic sinking feeling’ can trigger,
of corporate indecisiveness, lack of accountability and failure to acknowledge work done; instead of panic, a down-the-line
can block performance approach to fairness: Swedish
pharmaceutical firm Astra
showed its ‘ethical rationality’
G parametrics: eg production numbers, percentage market share, staff satisfaction as over allegations by six employees
measured by regular surveys; show up earlier than financials that a US executive had fired
older, married women and
pressured new, younger
G non parametrics: natural disasters and random acts of violence are relatively rare - most replacements to have sex with
crises show early warning signs in: him; despite the executive’s initial
denials, the pharma:
O data: technical, research and operating systems reports
G fired the accused and other
O individuals: listen to warnings from employees about organisational processes and executives
decisions; even if you subsequently reject their suspicions, welcome whistleblowers
G launched an internal
and devil’s advocates investigation
G set up a hotline for employees
Conversely, firms are better able to ride and survive a crisis if they learn first to build ‘healthy’
to call investigators
organisations in non-crisis situations. Instead of focusing exclusively on monitoring, they can anonymously
develop a trusting workforce eg by
Timely communication and
O supporting whistleblowers unwillingness to compromise on
employees’ wellbeing reinforced
O spreading positive stories about their observations the firm’s awareness of its own -
and its stakeholders’ - values.
Research: under such conditions staff won’t hide problems when they can still be fixed.
G create multiple scenarios: does it set out each employee's role in the event of each
emergency? are priority actions listed first? are the contact details correct?
G update with new data: eg new premises could present a new set of risks - it’ll
involve giving new maps and contact details to emergency services
ADVANCE PREPARATION
Oklahoma: advance preparation
for crisis speeds recovery - of
employees, morale and trust.
Coming up with a plan
Lessons learned in ‘emergency
emotional care’ from the Following a plan prepared in advance enables leaders to switch to prioritisation vs making
counselling team sent in after the knife-edge decisions in a hurry and with limited data. But what should the plan look like? To
Oklahoma bombing: formulate a crisis plan:
G let them know what’s coming:
pre-brief teams on what they're G define ‘crisis’: or critical incident for your firm eg the death of an employee’s spouse
likely to encounter
won’t bring BP’s operations to a halt but it might adversely affect a small firm dependent
G monitor teams for signs of on that worker for its smooth running
stress: and offer counselling if
needed
G evaluate existing resources: eg employees trained in first aid
G demobilise teams on the way
out: ask them to describe their G set up a first-response team: establish who’s authorised to call for assistance or make
experiences and pass on
problems for leadership referrals over employees’ wellbeing; create a document identifying who will do what - with
involvement contact details
G address individual issues: in
one-to-one counselling G train first-responders: ensure training covers common reactions to stress eg loss of
meetings sleep and depression
It doesn't just work for terror
attacks; study recommends G identify family liaison people: how managers deal with families of affected employees
managers counsel employees can boost or sink a corporate reputation; treat employees’ immediate families as
after redundancies, robberies, extensions of employees
accidents or (especially for
frontline staff) physical assaults.
G develop communication channels: distribute the list of emergency procedures and
resources to all employees; include contact details of post-crisis counsellors
O plan for the long haul: managers can’t just brush off an old plan when the crisis hits; it G it seldom works: how quiet
needs constant testing, questioning and monitoring can a crisis be?
Tips for managers with a mission
G layer crisis managers to cause crisis:
into executive authority, the command (decision-making) level, and an incident response G the point is to meet the firm’s
team to deal with the situation on the ground; make command responsibilities clear (‘X will mission, not make changes for
do Y in Z circumstances’) and ensure there’s a second person ready to take over each role their own sake
if the main contact is unavailable G talk to employees - ask them
what’s worked in the past, what
G pool available talent hasn’t and what might work now
research: faced with a crisis, managers are more likely to rely on personal judgement and
go with intuitive (or, less often, negotiated) solutions vs those based on data; need to rely GLOBAL HEALTH CRISIS
on diverse experience and expertise to avoid groupthink and broaden judgement; the SARS: lessons for managing a
answer to ‘which option should we choose?’ needs to be based on the strength of available cross-border crisis from the
options vs the boss’s gut instincts epidemic that killed 800 and cost
business $60bn (£30bn):
G communicate consistently:
WEED OUT POTENTIAL CRISIS-CREATORS between HQ and operations in
other countries; avoid confusion
by ensuring regular updates to
Most crises are rooted in people - but because of familiarity, misplaced trust, employees are consistent
unwillingness to confront people, shyness they’re often the last place from which
G rely on facilities managers for
managers expect a crisis to sprout. So crisis planning must involve a robust people information: ie for the true
assessment. situation on containment efforts;
use info to reassure employees
It might sound like a job for the FBI, but ‘profiling’ potential miscreants is straightforward. G postpone partnership:
Security consultancy Kroll suggests that today even smaller firms are more likely to: companies will likely avoid visits
and meetings during
G dig deeper during background checks: to include eg a reliable address history vs contamination scare
one provided by the applicant and a criminal records search G phone clients: expect them to
cancel meetings but keep them
G screen all employees, not just managers: temps and consultants (eg an IT in the loop
consultant with systems access) could pose as great a threat to the business as full- G don’t expect a warm welcome
time managers home: if you’re returning from
an infected area, HQ is unlikely
G adopt sophisticated methodologies: eg identifying ‘liabilities’ in applicants’ to let you anywhere near the
backgrounds, verifying education and employment histories across countries place - at least for a couple of
weeks
LEADERSHIP IN CRISIS
G brought peripheral strategies into the mainstream: by using human error as a first G trains for crisis: all employees
vs (as is customary) a last defence participate in crisis simulations
eg biological attacks -
contributed to effective
G changed the perception of risk: by recasting the management of political risk to response on 7/7
make mistakes okay, makes possible more innovative public policies
G provided a vision: 'A world-
G made error into a positive: admission that he’d been wrong underscored vs class Tube for a world-class
city’ - and (to avoid laughter at
weakened public perception of strength and effectiveness the state of the track and
signals still operated by pulling
G looked flexible vs indecisive: backflips usually come in response to public criticism giant brass handles) spun it in
and negative feedback - they showed he was listening terms of ‘heritage’
O reassure: eg that symptoms of trauma are normal - and point them towards sources Alltel: CEO Scott Ford leveraged
of information and support all his contacts to ensure
employees were safe:
G recognise the humanitarian
crisis: “Just getting everybody
The dreaded call taken care of was the first thing.
The rest of the stuff is frankly
just money”
How do you make a disaster into a crisis? Ask Robert E Murray, CEO of Murray Energy - the
owner of the Utah mine that recently buried six miners in an underground chamber, whose G use all resources: used mobile
networks to track down last
miscommunication started out as simply confusing but declined into ranting. missing employee - worked with
the army via an ex-colonel,
He started out well, jumping into his plane as soon as he heard of the accident, taking charge now-employee, to get her out;
“If I’d asked the head of
of the rescue operation and talking to the press ... so far, so good (vs worst-practice - Exxon marketing, he’d still be sitting
CEO took too long to get to Valdez and to take stock of the 1989 oil spill that turned into one here”
of the world’s worst (and worst handled) environmental disasters); but then Murray:
G slagged off the press: and everyone else - including union organisers (who’d suggested Gap: CEO Paul Pressler focused
on providing immediate help -
that retreat mining - widely acknowledged to be dangerous) could have caused the collapse and involving employees in the
effort:
G veered miles off-topic: with the families of six men still desperate for a breakthrough, G take care of immediate
lambasted environmentalists for their crusade against global warming as ‘an affront to the needs: offered housing and
coal industry and to the American economy’ - hardly uppermost in the families’ minds; clothing allowances
panned by critics as ‘callous’ and ‘damaging’ G organise access: extended
pay for 30 days - and
G contradicted the evidence: insisted an earthquake had caused the collapse - even when encouraged workers who lived
paycheque-to-paycheque to set
seismologists said the collapse had caused the tremors that had stalled rescue attempts vs up direct deposit so they could
best-practice: wait until the evidence is in before you start dispensing answers get hold of their pay
G empower the workforce: in
G disappeared: without explanation after three rescuers were killed; families said they felt order to build a sense they
‘abandoned’ were participating in the rescue,
Gap allowed employees to
transfer paid time off to 1,300
Lessons from the fiasco for crisis communicators: employees affected by Katrina
G be calm and honest - but optimistic: avoid spin but make it clear the firm is pulling out
the stops; despite his rantings and ‘near-insanity’, Murray got some praise for ‘candour’
G focus on the task at hand: in this case the safety of the victims - not extractives
industry critics
COMMUNICATING CRISIS
In the eye of the beholder
WORLD BANK BIRD CRISIS You can’t leave it to PR ‘minders’ to rescue the business when the press uncovers the world’s
Faced with bird flu in some of its largest ever case of embezzlement, a hamster’s head in your flagship product, or board
markets, the WB communications members in bed with a bevy of minor celebs.
team focused on one message -
‘our employees’ safety is our
priority’ - then looked for channels:
Salvaging the corporate reputation is the bosses’ job - and if investors, consumers and
employees can’t see that you have demonstrable faith in the firm, they won’t, either.
G online interviews - print and
audio: with those leading the
in-house work on bird flu These days a crisis is more likely to be one of perception than eg all-out wildcat strike because:
G Bill Clinton: instead of During the recent Virginia Tech shooting, the college’s website was the forum for
admitting guilt over disseminating information to the press and public during and after the incident; within 48
‘Monicagate’, countered
allegations one by one ... and,
hours it had added a memorial site to the dead for people to post condolences.
though battered, survived
G Northwest Airlines: US airline
declined to apologise for
‘imprisoning’ passengers during
Releasing pressure
a 1999 snowstorm - but restored
its reputation through targeted Anti-corporate activists will never be a CEO’s best friend; but companies can mitigate some of
local advertising - didn’t want to the most aggressive anti-corporate groups’ tactics:
draw attention of people who
hadn’t heard about it
G identify who wants what
G Merck: pharmaceutical firm managers can gain an idea of where ‘antis’ are likely to strike from their specific aims; eg
overcame critical press by
fighting US lawsuits and
Burma UK campaigns against investment in that country vs self-identified socialist groups
labelling the plaintiffs as with no fixed goals but a general distaste for business - the more wide-ranging the goal,
opportunists vs Audi: German the more difficult it will be to preempt
carmaker implied a guilty
conscience in the 1980s when it
G cooperate (or co-opt) asap
expressed sympathy for crash
victims following press claims questionable labour practices in eg China will draw fire for firms sourcing from factories
that its 5000 model accelerated there; it’s well worth communicating directly with labour rights groups and involving those
of its own accord; resulted in willing to cooperate in decision-making - helps resolve issues and (just as importantly)
US sales collapse avoids press hype with your firm’s name in the headline; TopShop’s decision not to sign
up to voluntary standards on labour didn’t help when some newspapers all but accused it
of complicity in slave labour
REPUTATION IN CRISIS
Damage control
Reputation and crisis management are closely linked; PepsiCo public affairs boss Rebecca CAN WE FIX IT?
Madeira cited reputation as ‘your biggest asset or your biggest liability’; manage your
Mattel: tips from the US toy-
reputation before a crisis and chances are you’ll survive it. Dos and Don’ts when crisis strikes: maker at the centre of the world’s
largest toy product recall crisis to
G DO aim for damage control vs damage disappearance date:
quantify the problem - and the scale of the damage; wishing it away or downplaying its G give it the full monty: this
significance won’t help approach to damage control
meant explaining what went
wrong, apologising, accepting
G DO go beyond apologies
responsibility and taking action
eg faced with multiple flight cancellations, US airline Jetblue CEO David Neeleman put the
firm’s money where his mouth was; instituted a reimbursement programme and a G get it out there: took out ads in
major newspapers eg the New
‘passenger bill of rights’ York Times and USA Today;
held a press conference
G DO prepare staff
G make the message clear: sent
to deal with awkward questions; the CEO needs to come out in charge - but frontline staff clear messages about what had
need to be able to give the same messages and answer customer questions gone wrong and what they
sympathetically, precisely and consistently planned to do about it
G play to (character) strengths:
G DON’T try to deal with emotional people logically Eckert filmed a separate online
don’t explain the details of your disaster recovery processes - no-one cares; instead, video apology; worked because
it was a competency vs
reassure people eg whose records have been hacked that it’s under control and won’t
character crisis - the CEO still
happen again - talk to them in person and show them what you plan to do; answer the encapsulated trusted, solid
questions people are asking - “Will I be OK?” and “What are you doing about it?” qualities of the brand
G make it personal ... and from
G DON’T grovel the top: CEO Bob Eckert
when H-P was caught tapping its competitors’ communications, CEO Mark Hurd was posted a letter on the group’s
apologetic but not prostrate; said “We’re a very strong company; we’re going to pull website addressed to ‘fellow
parents’, explained: ‘I’m a
through this” - important reassurance for employees as well as customers parent of four kids as well’
The long-held model of ‘engaging’ with adversaries doesn’t work because it assumes
they’re potential friends.
CONTROL THE AIRWAVES
Research: instead managers should adopt a more realistic ‘political’ model that assumes Skype: when 200m users lost the
rivals want to torpedo the business. How to fight attacks on corporate reputation: service, the disruptive innovator
and web-telephony pioneer went
G don’t wait for the facts into control-freak mode; the firm:
the public won’t; instantaneous emotions are likely to define the company’s image G didn’t connect: redirected calls
to its not particularly helpful PR
G forget appeals to reason people vs being open and
a leaked think tank report found that countering even outrageous allegations with facts accessible to its punters
doesn’t alter public beliefs; people don’t trust business - and education doesn't defuse G sang from the corporate
outrage over companies’ perceived misdemeanours hymn sheet: repeated the
mantra on its website rather
G don’t overreact than responding to specific
queries - gave the impression
mobile phones responded to ‘brain tumour’ scare with low-key independent scientific no-one knew what was going
studies vs press conferences and over-communication (which could have backfired on
by increasing press attention)
G declined to inform: ignored
the big question - users wanted
G admit when you’re wrong to know: “When will I get my
if you want to be believed when you’re right; McDonald’s responded to sustained Skype back?’’
criticism (and long-term consumer trends and expectations of business) by
switching from plastic to paper wrapping and ending super-sized menus; was
it responsible for obesity? no, but that didn’t matter as much as the need to
appear ‘responsible’
Post-crisis brand-building
I HELD THE LINE
Cantor Fitzgerald: boss Howard So you’ve been visible, given straightforward information and survived the crisis with your
Lutnick rebuilt the brokerage in staff intact. Now what? When it’s a matter of reputation, keeping quiet when your corporate
the aftermath of 9/11 after losing
two-thirds of its New York reputation gets dented isn’t just a bad idea, it’s also a wasted opportunity:
employees in the attacks; how?
he: G customers don’t forget: unless they have an alternative, they’ll hold on to blame and
G cried: public tears showed he associate the brand with the disaster well into the future
had a human side despite
previous copious evidence to G ... though they may forgive: in specific circumstances eg where a product has been
the contrary - he’d taken the firm contaminated once it’s on the shelf - but not where internal human error eg an employee
over in 1996 as its founder lay
on life-support forgetting to change a filter is involved; the good news? if they don’t know the cause, they’re
more likely to assume it’s technical vs human error
G got the firm back up quickly:
re-opened within two days of the
attacks and posted a profit the G they see the brand in terms of themselves: brands - and their memories of them - are
following quarter strongly autobiographical ie susceptible to nostalgia
G held the line: despite operating
in a high-attrition industry, A classic study of how not to do it: US fast-food chain Wendy’s faced with an accusation that
Lutnick hasn’t lost a single a customer had found a finger in her chilli, kept quiet even when she was discovered to have
senior manager because ‘I stood brought it with her in a bid for compensation. Lessons from Wendy’s reaction:
with my guys at hell’s door and
held the line’ - and they had
equity G appeal to emotions, not wallets
post-crisis brand recovery takes emotional reach - the relationship with customers needs to
G rectified mistakes: found that
behaving as he had before -
be reestablished vs Wendy’s, which launched a discount (though not on chilli) - mistakenly
aggressively - didn’t play well appealing to reason - and implying to many consumers that the freebie was an effective
publicly when he immediately admission of liability for the finger incident (‘If they’re not at fault, why give away free stuff?’)
cancelled dead employees’ pay
cheques; he claimed otherwise
G call up good memories
the firm would have run out of
cash and subsequently set up a remind customers of the good times via a nostalgic campaign focused on ‘autobiographical
relief fund with a quarter of referencing’ ie weaving the brand into customers’ past lives; eg ‘Remember when ...’ ; the
Cantor’s profits over 5 years technique:
O works beyond what’s actually remembered: reconstructive memory might make them
remember good experiences they never actually had; case study found many participants
remembered (the non-existent) Wendy’s Playland
DELAYED RESPONSE
BAE: faced with allegations that it
O gives comfort: focus groups after 9/11 identified nostalgic advertising as the most
ran a £60m slush fund to pay comforting because it reassured and boosted trust
Saudi officials as part of the al-
Yamanah arms deal, the UK G tap brand (as well as customer) heritage
defence firm (eventually):
marketers can use heritage as a reference point for campaigns; restage brand capitalising
G set up a committee: to assess on emotional connections already in the marketplace eg Wendy’s ‘old-fashioned
compliance with ethical business hamburger’ iconography
practices and anti-corruption
legislation
G weigh the cost
G made it credible: hired Lord the firm might risk lawsuits if it publicly accepts responsibility but this might be the cheaper
Woolf, the former Lord Chief
Justice of England and Wales,
option in terms of long-term reputation if the crisis involves human vs technical error
to head the investigation; the
other four members included
former Coca-Cola CEO Douglas
Daft - avoided the appearance HALO VS VELCRO
of bad faith and window-
dressing
How big a crisis the business faces will depend on how the public perceived it before -
G roped in whistleblowers: set they could end up with public sympathy and understanding, or more blame:
up a website where employees
and others can submit G ‘halo’ effect: despite widespread belief that prior good reputation will mitigate the
information confidentially
public perception of the same firm in crisis, study shows it doesn’t always work; vs
G offered transparency:
promised to make the G ‘velcro’ effect: so-called because a prior poor reputation will attract additional
committee’s findings public reputational damage; study of reaction to hypothetical firm that was rated low on a
G committed to act: the firm said ‘best places to work’ list and refused to support community efforts found that public
it would act on the committee’s didn’t just think they had crisis coming, they were also more likely to think the firm was
conclusions to blame for it
O what have we learned? eg new information on potential risks, and tacit information G operated on worst
about the firm including (invisible) routines that emerged in crisis assumption: ie that HQ would
be off-limits for the duration and
improvised - the HR recovery
O how did we learn? during the crisis but also before (in eg simulations and training) and team moved for three days into
afterwards (in sharing experiences of the crisis) a team member’s front room,
used mobiles with poor signals
O how can we use it? what’s the potential for transfer to the rest of the firm? and a dial-up Internet
connection for email
G re-allocated resources: staff
not delivering front-line services
DON’T GO IT ALONE acted as volunteers in the
community or temporarily
In the aftermath of its mishandling of nationwide forest fires, the Greek government ditched their job descriptions to
proposed ‘a cohesive mechanism’ based on European solidarity that would call out EU- do whatever needed doing -
relieved pressure on key staff
wide reserves in a crisis; the partners would: working 24/7
G offer a ‘phone call’ service: the idea is that help from other European countries will G took it off the page: ‘people
be only a phone call away strategy‘ based on ‘enabling’
and initiative proved its worth;
the policy came from the top
G pool forces: to act as reinforcements for national efforts; can be used proactively or but the momentum for getting
reactively, as required services working again came
from below
G coordinate efforts: eg via common training programmes and exercises, and expert
exchange
CRISIS ASSESSMENT
How would you cope in a crisis?
Below is a guide to the crisis decision-making process. In your next crisis, use the checklist to assess how
you responded and measure performance in each of the staged criteria listed; the more efficiently the stages
are dealt with, the more likely you are to get out of the crisis - but poor performance at any stage could turn a PERFORMANCE
DIAGNOSIS
SEARCH
EVALUATION
‘INTERRUPTS’
DELAYS
FEEDBACK
Concepts of Care in Organizational Crisis Prevention S Simola Journal of Business Ethics (62) OTHER
2005
REPORTS:
Corporate Reputation and Crisis Management: The Threat and Manageability of
Anti-corporatism L Tucker & TC Melewar Corporate Reputation Review Winter 2005
Ethical Rationality: A Strategic Approach to Organizational Crisis P Snyder, M Hall, J Robertson, G Energising the
T Jasinski & JS Miller Journal of Business Ethics 63 2006 Workforce
The Five Stages of Crisis Management J Welch Wall St Journal 14 September 2005 G Making Change Stick
Is that a Finger in my Chili? Using Affective Advertising for Postcrisis Brand Repair KA Braun-
Latour, MS Latour & EF Loftus Cornell Hotel & Restaurant Administration Quarterly 47:2 2006
Maintaining Credibility During a Crisis: Challenges for the Manager J Jarret Public Management
May 2007
Peter Beattie’s Strategies of Crisis Management: Mea Culpa and the Policy ‘Backflip’
PD Williams Australian Journal of Public Administration 64:4 2005
Predicting and Pre-empting the Corporate Heart Attack T Fitzgerald Business Credit June 2006
BULLETPOINT
For busy managers
Unpacking the Halo Effect: Reputation and Crisis Management WT Coombs & SJ Holladay For information on
Journal of Communication Management 10:2 2006
our monthly journal
When the Going Gets Really Tough A Jack Financial Times 21 July 2005
please call
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2 Crisis, What Crisis?
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6
Planning for Crisis
Leadership in Crisis
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8 When Disaster Strikes
G
10 Communicating Crisis
G
11 Reputation in Crisis
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14
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15
Learning from Crisis
Crisis Assessment
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16 References &
Further Reading
Company
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The Leadership Skills Portfolio REPORT 4
CRISIS MANAGEMENT
Address The high-profile terror attacks that make up the public perception of crisis are a
relative rarity: most crises come not as bolts from the blue but as ‘problems’ - and
often it’s mismanagement of their early stages that escalates them to crisis point.
G preventing the crisis in the first place: how to spot the tell-tale signs of a
corporate disaster waiting to happen
BULLETPOINT
G the element of surprise: how to respond to what you could never have predicted
I N S I G H T
G the who and how: what makes a good crisis leader? and how do they get their
INSPIRATION teams behind them?
SOLUTIONS G defending your corporate brand: how to fight back against attacks on your
company’s reputation
Postcode
K N O W L E D G E
IN JUST 16 PAGES G avoiding repeats: how to learn from crises
The report ends with a diagnostic guide for your own crisis plan. Is yours fit for
purpose? The guide will help you fill the gaps now - before crisis hits.
Card No