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Crisis Management…Are You Prepared? Be Ready or Be Crushed By Mark Pribish, Enterprise Network Board of Director
Cafferelli provided examples of corporate and individual crisis events including Exxon, Tylenol, Firestone, Enron, Wendy’s, Jack in The Box, Martha Stewart, Roger Clemmons, and Elliot Spitzer. While the Elliot Spitzer example provided the audience a good laugh, Kaufman noted that Exxon did everything right from an operational risk management perspective and yet Exxon still received negative press. According to Wikipedia, a crisis is a major, unpredictable event that threatens to harm an organization and its stakeholders. Although crisis events are unpredictable, they are not unexpected. In addition, three common elements related to most crises including: (1) a threat to the organization (2) the element of surprise and (3) a short decision time. Dave Jewel, Director of Risk Management of PetSmart highlighted four crisis events at Pet Smart including (1) Hurricane Katrina (2) Distribution Center Rack Collapse (3) Pet Food Recall and (4) Bird Health Issues (Psittacosis). Jewell summarized the bird health issues by talking about how PetSmart received sick birds (psittacosis) from major supplier and how the sick birds were perceived as “bird flu” by media and some customers. PetSmart had to quarantine the birds in stores during holiday and cold and flu season. The immediate impact tied up risk management, legal and corporate communications for several weeks. However, since PetSmart had a crisis management plan in place PetSmart was able to minimize legal and operational costs. Doug Klint, VP and General Counsel of Taser International provided a list of 10 crisis related events ranging from product liability lawsuits to negative news articles Based on Klint’s experience at Taser, Klint provided a list of TASER guidelines for crises management ranging from telling the truth and nothing but the truth to company transparency to knowing when to keep a low profile. Finally, Neil Kaufman who is the National Practice Leader on Crisis Management for Risk Solutions International, LLC., talked about how operational risk management should include business continuity management, information technology, security compliance, emergency management, supply chain and crisis management. Kaufman also talked about external market drivers ranging from the high cost of insurance to regulatory agencies and being at a competitive disadvantage. He then stated that the effects of not being prepared included the loss of customers and revenue and your business insurance premium increases. In the event you missed April’s Crisis Management Executive Forum and/or you would like additional detail presented by each panelist, you may click on the pdf link below to download the PowerPoint presentation. |
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