LOSS CONTROL MANAGEMENT

CRISIS MANAGEMENT
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“A crisis is an unforeseen event which
may put the reputation and smooth
running of an organization in
danger”.
• is a relatively new field of management.
Typically, proactive crisis management activities
include forecasting potential crises and planning
how how to deal with them, for example, how to
recover if your computer system completely
fails. Hopefully, organizations have time and
resources to complete a crisis management plan
before they experience a crisis.
Crisis management in the
face of a current, real crisis
includes identifying the real
nature of a current crisis,
intervening to minimize
damage and recovering from
the crisis. Crisis management
often includes strong focus
on public relations to recover
any damage to public image
and assure stakeholders that
recovery is underway.
“The best defense
is a well planned
offense”
• PREDICT – anticipate everything that could go wrong with your
company. Identify the issues.
• POSITION – decide what your position will be on these issues.
• PREVENT – take preventive measures.
• PLAN – in case prevention doesn’t work, prepare a plan for dealing
with the crisis.
• PERSEVERE – follow your plan and stick to the positions you have
taken. See the crisis through in a thorough and professional manner.
• EVALUATE – if the plan is enacted, review the results to determine if
there are other steps that can be taken to prevent the crisis from
happening again.

These steps will help get your crisis management plan started and keep it
vital and updated as your surroundings change.
Crisis Management can be generally be
put into two categories -

1. Manmade
 Violence
 Vandalism
 Accidents
 Operator error
 Negligence
 Defective equipment
 Poor planning and scheduling
 Strikes
 Fire
 Illnesses such as food poisoning
Crisis Management can be generally be
put into two categories -

2. Natural
 Weather
 Earthquakes
 Communicable disease

Some examples of potential issues to consider

include motor coach or plane accidents, robbery,
death on tour, strikes, natural disasters,
bankruptcy, terrorism or war, and travel scams.
The team, regardless of size, will be responsible for
identifying all audiences that may be affected by
each crisis situation. They can also designate
contacts to gain specific information on each
situation as needed. The crisis team is charged with
identifying various scenarios that could be adversely
affect the company and developing a model or plan
to follow in each. Prepared media statements, press
releases, notification lists and materials will help keep
a crisis situation under control and calm the person
who must deal with the situation
• When responding to a crisis situation, the response
should be honest, timely and direct.

• Incorporate your ethical standards into the policy. Do

the right thing, being fair to all parties to the best of your
ability.

• Think now about how your business practices will be

interpreted by the media during an emergency. It is
important to have background information on your
company available. It is your responsibility and in your
best interest to provide current, complete information.
Understand that the media wants to know
three things: what happened, why did it
happen and what are you going to do to
make sure that it never happens again? If
you understand the media’s psyche, you are
on your way to finding a solution to the
problem
Crisis team members should know each roles. Clearly
identify job assignments and responsibilities and let those
who will serve as spokespeople know so they can be
prepared to jump into action should the need arise. Team
members should have immediate access to each other at all
times in the event of a crisis. Finally, the news media must
be briefed on a regular basis. All phone calls from the media
must be answered quickly and completely. Keep a media log
listing the date and time, source, reporter, phone number
and the question. Stick to your core message and deliver
that message to everyone.
• The crisis management process does
not end once a crisis has occurred and
been resolved. Each situation should
be carefully evaluated. Look at the
media coverage received, the resulting
image of your company, short and long
term programs to rebuild image and
review position statements for
relevance and necessary revisions.
Only after a crisis management plan has been
put to the test can the crisis team evaluate its
effectiveness. If a company has been lucky
enough not to have a crisis situation in which to
test its plan, it should be constantly monitored
to make sure the position statements are still
relevant and no new issues have arisen. A crisis
management plan should be a living document,
undergoing constant evaluation and updates.
• Motor coach or Plane Accident
• Robbery
• Natural Disaster – Weather
• Fuel Crisis
• War or Military Conflict
The key to crisis management is
critical thinking-analyzing risk and
planning ahead for it.

Once a crisis has developed, it is too

late for prevention, and we are left
with “damage control”, with the
assistance of law enforcement
officials, mental health officials,
medical personnel or private special
ops teams.
Crisis Management – Singapore Style
 3 – LAYERED CRISIS ORGANIZATION

Severe software, hardware,

data-communications, or
data base failure

Infrastructure alerts,
failure, or unavailability Crisis
Detection Crisis Disaster
& Organization Recovery
Severe conditions Prevention
Terrorist threat
Bomb threat
Hostage situation

Other external threat

 A crisis involves an emotional aspect
and originates in an auspicious context
 Numerous parties (state authorities, associations,
consumers, representatives) may express their interest
and demand explanations.
 The rush of demands for information necessitates the
quick organization of communication
 During a crisis period, the very survival of the business
may be at stake.

 The company must provide information within a short

period of time.
 Uncertainty can make decision-making difficult.
 The environment in which the business must
communicate is often uncertain and can change quickly.
 Two Kinds of Crisis

1. Local Crisis – affecting a single entity, a

local site

2. Global Crisis – affecting the image of the

entire group
 Examples of Risks
(a non-exhaustive list)
Industrial accident: explosion, Numerous technical problems Involvement of third parties
fire in a factory or during
transport

Internal or External Sabotage

Natural Disaster

Consumer Accident Poor/bad test results Frequent Complaints about a

product

Deterioration of a product Increase in number of client or

customer complaints

 Closure of sites Poor results for the market sector Bad financial results

Hostile takeover bid Loss of several big clients

 Boycotting of products Series of press articles calling Series of press articles

market sector into question, badmouthing the company
negative reports about competitors
 Examples of Risks (a non-exhaustive list)

Unexplained drop in stock Consumers Internet forums

value (making accusations against
the co.

 Strikes/social conflict Announcement of popular Mobilization of unions at

measures several sites.
 Restructuring Social Conflict triggered

 Repeated harassment Bad social climate Media rumours

 Fraud Suspicious or unusual behavior Opening or major legal

proceedings
 Investigation of a prominent Customer complaints Discovery of fraud
figure in the Group

Malevolence committed by Internal audit giving cause for

an employee using company concern
resources (internet,
embezzlement, etc.) Accusation against the co. by a
competitor or client

False information, rumours

published on a website
 Examples of Risks
(a non-exhaustive list)

 Unacceptable practices in  Ethical crisis for a  Questioning of the company

the company (child labour, competitor in the press or by
disrespect for people and  Large public interest in an
employees concerning an
the environment, ethical issue
overpayment) ethical issue
 Pollution
 Bad waste management

 Kidnapping of directors  Unstable political situation  The onset of a conflict

or taking of hostages
 Destruction of material  Injury or death of
 Death of one or several goods personnel
directors

 Terrorism

 Natural disaster
 Likelihood of occurrence and
levels of severity

1. When considering crises, it is important to

look at two at two criteria:

– The likelihood of occurrence or

probability of a crisis emerging
– The level of severity of a crisis

2. The probability of a crisis may be low,

medium or high depending on factors such
as the frequency of occurrence of particular
kinds of accidents in factories, certain IT
problems, etc.
 Catastrophic
High
scenario

Scenario involving
Medium
danger

Low Minor incidents

without
consequences

Minor Problematic serious

 Loss of Stock Media Activity Domino Loss of Financial Deterioration of Environmental
Human Life Exchange Coverage Halted Effect Market Impact Image Impact
Activity Share

No loss of No loss of Little media Halt in No No loss Week Small No impact on

human life stock coverage, activity domino of market financial deterioration in the
value local or for less effect share/ impact image environment
regional than 24 sales
media hours
coverage

No loss of Weak to Wide Halt in Slight Loss of Financial Deterioration of Halt in activity
human life medium regional or activity domino market impact image of 1 to 5 days
but loss of national of 1 to 5 effect share/
personal stock media days sales
security value coverage
threatened

Loss of Major loss Extensive Halt in Strong Major Serious Major Halt in activity
human life of stock national activity domino loss of financial deterioration of for more than 5
value and for more effect market impact image days
internation than 5 share/
al media days sales
coverage
 Identification of Crisis Management Teams

A crisis may be local or global according to the following criteria:

 A “local” crisis is one which affects one site in particular

 A “global” crisis is one which affects the image of the company
as a whole
 A local crisis may expand and become a global crisis

It is the responsibility of the director of each local entity

to appoint a crisis management team during the
monitoring period.
 The local crisis management team will
include (as a minimum)

 The director of the particular

local entity
 The communications manager
 The Human Resources Manager
 Technical, legal and financial
experts
 Employee representatives
It is also recommended that the director of each
local entity designates certain roles in advance:

 Chief Organizer
 Reporter
 Spokesperson
 For a global crisis, the global crisis management
team will comprise the following members:

 The Chief Executive Officer and Chief Operating Officer

 The Director for Legal Affairs and Group Development
 The Human Resources Corporate Senior Vice President (Group
Level)
 The Vice President, Investor Relations and Financial
Communications
 The Corporate Communications Director
 The Director, Corporate Sustainability
 The director of the department and/or region concerned
Staying Alert: Anticipation of a Crisis
Staying Alert: Anticipation of a Crisis

 External crisis with the potential to affect

 The sector of an activity of supplier in crisis
 The monitoring of competition
 Contact with public authorities and influential figures
 Press reviews
 Rumours in the press, on the Internet among
competitors
 Locations:

• A meeting room that would serve as a work room for the crisis
management team will be identified in advance at each entity. During
a crisis period, only members of the crisis management team will have
access to this room.

• In addition to the meeting room, a reception room will be designated

to receive external parties.

• Members of the crisis management team will be made known to those

responsible for security at each site and will have access to these
designated locations at any time

• Identify a potential operations center close to each site for use by the
crisis management team in case the site itself is affected by a crisis.
 Material Resources

 Telephone landlines and where  A radio, television and projector

possible a telephone line
independent of the switchboard
 Paper board/ flip chart
 A teleconference number and
videoconferencing equipment  An office supplies/kit

 A hotline number – if necessary  A notebook of plain white paper

to be used as a log book
 Computer and printer
 Fax machine
 Portable laptop computer with
DVD reader
 Forms for filling in the principal
 Mobile phone information to collect when
speaking to journalist
 photocopier
 Speaking to the Press
• Whether it be the professional, financial or general press, only
those authorized by the company to meet with journalists
may do so. Note that during a crisis period, one person (or two
people maximum) will be designated and authorized to speak
on behalf of the company. The communication managers at the
Group’s headquarters and the executive management may
express themselves concerning activities and issues for which
they are responsible, but should obtain from commenting on
other issues. Only the Chief Executive Officer and the Chief
Operating Officer have the right to address any topic.

• It is imperative that requests by the media or by

spokespeople from external organizations directed to
employees are passed on, through the director of the local
entity, to the central communications departments. These
departments will decide if it is appropriate to comment and
who would be the most suitable speaker.
 Basic Rules
• The involvement of all employees in conferences, seminars of
other external events must be submitted for authorization to the
communications manager of the site manager or the director of
the department concerned. This person will then pass on the
information to the central communications departments to
evaluate the request and give advice as well as to verify our
confidentiality.

• Any document (electronic or paper) widely distributed to either

an internal or external public must respect the visual identity
defined in the corporate Guidelines for Internal and Corporate
Communications. It must be reviewed by the local or national
communications manager. In the case of sensitive issues you
should ask for advice and validation from the central
communications departments.
 In the case of heightened risk or a
confirmed crisis
• Any events identified as hazardous will immediately be
communicated to the central communications
departments so that they can collaborate to determine
the best course of action.
• Local or national crisis will immediately be signaled to
the central communications departments who will give
their support to the local entity
• The entire personnel will be informed as to who has
been designated as spokesperson – the only person with
the right speak to the media
• A…..
 To ensure clear and concise discourse, prepare your
interviews in advance using reliable documents.
 Forge relationships with journalists; get to know
them and establish regular press relations with the
media
 Be sincere, precise and open. Don’t be afraid to
say that you don’t know.
 Never lie.
 Stay in control, resist pressure, do not say anything
“off the record” (do not give information that you
would not want to see published, a journalist
always does his job and divulges the information
that he receives – in other words, there is no
confidentiality!)
 Guidelines for Spokespeople

 B …..
 Do not send presents or invitations to journalist
 It is not the spokesperson who writes the articles, the
journalist has the last word.
 The journalist is no at the disposition of the spokesperson;
the spokesperson is at the disposition of the journalist.
 The journalist himself does not have complete control over
his article.
 Journalists generally request quick answers (although it is
sometimes recommended to avoid replying quickly)
 The target audience of the message is the reader or listener,
not the journalist
 Guidelines for Spokespeople

 C …..

 You are allowed to not answer immediately and

to note down the questions.
 You may reply “no comment on the issue” and
when in doubt, abstain from answering
 An article is never “owed” by a journalist or
publication, it may well never be punched.
 Reminder:
• The key tool for communication is the Crisis Management Directory
(containing contact information for all members of the crisis
management teams, cf. crisis prevention section, preventative
measures). Members of each crisis management team have an up-to-
date copy that will be sent to them during the monitoring period.
When there is a heightened risk or a confirmed crisis, the director of
the entity should make sure that each member of the crisis
management team has a copy of the Crisis Management Directory
• As soon as it I confirmed, a crisis must be dealt with in a
coordinated fashion, thus requiring dialogue between the
director of the local entity and the central communications
departments.
• A crisis may spread rapidly and have an effect on other parts of
the business, becoming a global crisis.
• A crisis affects the company’s image and therefore always
concerns the media. A crisis often encompasses several aspects,
and in particular legal matters, which must be taken into account
during the development of the plan of action.
 a. Local Crisis
• The director of the local entity identifies the crisis and sends a
warning message to the central communications departments and to
members of the local crisis management team concerned
• The central communications departments informs the member
concerned by the particular type of crisis.
• The member sends the information to all other Crisis mgt members
 b. Global Crisis

• The director involved sends a warning message to the central

communications departments
• The central communications departments inform the member dept
concerned by the particular type of crisis
• The members sends the information to all other crisis mgt members
• The members of crisis mgt alert and activate the global crisis
management team.
 As soon as a crisis is confirmed, the local crisis management
team (cf. prevention, preventative measures) must be
activated as soon as possible.
• (Issued during the monitoring period) to members of the crisis management
team and to the central communications departments.

• With the maintenance services. The crisis meeting room will be supplied
with his crisis guide, the Crisis Management Directory, the Directory of
Internal and External Publics, the Directory of Emergency Phone Numbers
and the logistics checklist.

• The journal of events is an account of the crisis which describes what

happened as well as recapitulating the action taken.

• If necessary a press reception area will be created and use may be made of a
press relations agency chosen in agreement by the central communications
departments.
 As soon as a crisis is confirmed, the local crisis management team
(cf. prevention, preventative measures) must be activated as soon
as possible.
• Organize a transfer from the switchboard or other phone lines being
requested for information to an authorized spokesperson, in particular for
calls from journalists. The crisis management team and the central
communications departments will work together to quickly develop the
model response message to give when answering such calls. Specific
information may be placed on an internet site toward which those
requesting information may be directed.

• The communications manager collects useful information such as

leaflets, press articles, etc., consolidates them and forwards the
information quickly to the crisis management team members. The
communications manager asks all members of the team to gather any
useful information that they know of.
 Involvement of the central communications
departments:

• Establishing the frequency of meetings or means to

communicate with the central communications departments:
conference calls, videoconferencing, etc.

• It is essential that all documents provided are factual. Third

parties may try to engage our responsibility with regard to the
crisis or its management and they will rely on and reproduce
our verbal and written statements to support the claims.

• Remind everybody that the spokesperson, as the official

representative of the company, is the only person authorized
to speak to the external public.
 Involvement of the central communications
departments:

WHAT TO DO?
• Before any action is taken, it is essential to respect the
warning procedure indicated in this guide and to work
together with the central communications departments in
order to make announcements appropriate to the situation.
As a general rule, we should try and make an announcement
as soon as possible while being vigilant about the first
information released since it will set the tone. However, it
is sometimes preferable to wait before making a statement.

• It is better to say “I don’t know yet, I will inform as soon as I

have the details” rather than to make a bad analysis or
prediction.

• Having a single spokesperson conveys to external parties the

importance of this official spokesperson representing the
company.
 Involvement of the central communications
departments:

WHAT TO DO?
• Give only a factual information. Before making an announcement, check that
the information to be communicated is accurate and obtain validation for the
statement’s content and how it is set out from the central communications
departments. When speaking hypothetically make sure that this is clear.

• Coordination is essential between the director of the local entity, and the
central communications departments to ensure that any information
transmitted is coherent and that any decisions taken are appropriate. It is also
important to make clear that steps have been taken to resolve the situation if
this is the case.

• By promoting the co. product, an eye care professional has in effect engaged his
involvement in the event of a problem with the product. Coordination between
the central communications departments and the subsidiaries is vital. The
clients involved should be clearly identified: chains, groups, franchises etc. It
will be essential to communicate about the crisis with these clients.
Involvement of the central communications
departments:

WHAT TO AVOID?
• Do not deny the facts of the situation and do not
trivialize them
• Do not make promises if you are not certain that the
company can keep them.
• Do not increase the number of spokespeople
• Do not neglect the sections and departments who are
unaffected by the crisis if the crisis persists
• Do not hesitate to ask for help from the central
communications departments.
• Do not lie and do not give your own value judgment or
opinion.
 Some strategies and principles

• Strategy of acknowledging the

problem (while looking for
solutions)

• The principle of coherence

• The principle of precaution

 To be avoided

• Refusing to communicate on a
subject

• Missing link strategy

• Scapegoat strategy

• Strategy of change or alteration

 List of Tools:
Recommend the documents to be developed:

• Recommended IT support: Word or Excel files that can be

sent by email and are easy to use.
• Crisis Management Directory
• Directory of Emergency Phone Numbers
• Directory of Internal & External Publics
• Press file
• Logistics check- list
• Position papers
• Q and A’s
• Press releases
• Internal memos