Crisis Management: a business asset we have to strengthen - Axess PR
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Monza – 20 April 2020 – Just by looking at the rate at which, on a global scale, we are going through emergencies, as frequently as two or three new devastating events per year, my first consideration would be to at  least change the color of the Black Swan, metaphor often used to define and describe unforeseeable and unpredictable events.

Going through the list of disasters and crisis’s that we have dealt with since the end of World War II, it is clear that unfortunately these situations are becoming more and more “white swans” that we have to learn how to live with.

Just to name a few of the most striking disasters of the last 35 years: we go from nuclear disasters such as Chernobyl and Fukushima, the Twin Towers in NYC, the many terrorist attacks from ISIS, the wildfires in in Greece, California and Australia just to circle back all the way to the Sars-Covid19 pandemic. I can assure you that the list from which I drew this small lineup of crisises, is extremely long and could easily make up the rest of this piece. The conclusion we can draw is that a globalized world, concatenated and interconnected, exposes us to some huge risks that call for predictive power, training and professionalism to reduce the impact of a any possible emergency on people and goods.

Our systems (companies, public services, local administrations, etc.) are usually not prepared enough. When something unexpected happens frequently what follows is incomprehension, helplessness and desertion. People are afraid. Organizations are afraid, even though they often turn a deaf ear to a review of their procedures and tools. As a matter of fact, there are a number of teachings that can be very valuable, both to prevent and to intervene during emergencies.

The first rule in Crisis Management, well known by any professional working in the field, is that it is fundamental to prevent, act or react immediately by understanding and selecting, in real time, the characteristics and the contents of the problem.

To be fast, since the time slot to examine what happened is minimal, it is necessary to have studied in advance and to have plans and procedures ready to use. 

To successfully manage an emergency and an ensuing crisis, often the natural development even though the two things are very different from each other, it is necessary to be prepared and equipped. I am not talking about card readings and crystal balls but rather of the good practice of building into a company, no matter the field, and even into a State, a Federation or a Community of States, a task force responsible for Risk Management, that would allow business continuity even in the event of predictable and unpredictable catastrophes, by implementing a valuable contingency plan to deal with the stopping of primary activities.

If you stop and think about it, it is a lot simpler than what it may seem. We do have in our communities detailed examples of different services prepared to take on any unexpected emergency seeing that they are well trained and equipped. Without bringing into play actions movies such as 007, let’s just take a look at any emergency room of any hospital, fire fighters, airlines or more in general the transport sector and the Protezione Civile.

It would be enough just to take inspiration from the models and processes that they all follow, by creating task forces whose main job is to identify these emergency scenarios. This could be done by setting up economical and human resources and by organizing a chain of command able to manage in the best and most efficient way emergencies and crisises. 

It almost seems impossible, right? Being able to foresee possible crisis scenarios that a company, a nation or even the entire world may have to face. But by following some rules, that may be hard to implement for those that don’t know the sector, everything becomes a lot more simple and it will be easier to contain economical and reputational damages that come with any crisis, and just to be clear any emergency becomes a crisis when it turns into public knowledge.

Crisis Management: a business asset we have to strengthen - Axess PR  Grafico Covid 1

The skills required to manage a crisis are:

  1. Full knowledge of the problem.
  2. Preparations of plans linked to the main emergency situations that may occur.
  3. Periodical drills to put in practice and verify that all the plans actually work.
  4. Constant updating of the plans.
  5. Allocations of exceptional resources to face and sustain any crisis.
  6. Creation of dedicated teams and the appointment of managers and technicians to manage everything from a strategic and operational point of view.
  7. Selection of alternative partners for the supplies: primary products, machines, logistics, human resources, etc.
  8. Plans to convert departments and personnel, including smart working and smart mobility.
  9. Communication strategies for the relationship with institutions.
  10. Consultants and experts in crisis management for all sectors: communication, legal affairs, engineers and technicians.

One of the major problems during a crisis is to be able to guarantee continuity to the business, both industrial, public or private services through a strong supply chain structured to work through emergencies thanks to a SG, “Sistema Gemello”, that can withstand the critical phase.

To build a valid SG it is necessary to have a strategic vision that takes in consideration Risk Management and the constant and updated evaluation of the risks. This vision has to also invest in the identification and setting up of alternatives that are prompt and accessible.

Many of the resources needed have to be already “in house” and anything that might be necessary, primary resources, machinery, backup staff and additional human resources, has to be already set up and ready to use.

In the process of managing a supply chain * it is necessary to identify some objectives: the pursuit of certain level of client service and the ability of meeting the needs of the market quickly and in a flexible way. There isn’t just one supply chain process, considering the fact that every sub-objective that makes up the management process is conditioned by different risks depending on the intentions.

Let’s just think at the managing of stocks during a catastrophe or the lack of supplies because of the unavailability of a provider that won the tendering procedure because of the superior economical conditions? What happens when we are tied to one provider only? We would have to go and find last minute deals, with higher prices and with the chance of buying products that are not of the same quality that we require.

This is why Enterprise Risk Management (ERP) is more and more considered as a way to look at the subject in a holistic and global way, concatenated crosswise to the company functions and focused on the critical risks regarding prior objectives.  

In a process like this, the people that are managing the entire operation and truly know how things work and how they should work, are to be given all the space they need to best handle things! Those same people that are active in the company system and that know how to act beforehand or, in serious scenarios, in a responsive way as opposed to company hierarchies that often lose all their value in  critical contexts but are still crucial in understanding the severity of the problem, have to personally take actions, using all those functions and resources that are competent and valuable during a crisis.

The pandemic we are living through right at this moment in unfortunately a perfect example of how “pricy” it is not to have the right people working the right jobs. Most of all it has to become an example of all the mistakes that are made when forced to learn while dealing with an emergency. It is undoubtedly true that every emergency comes with a surprise effect that can’t be planned, but if we were to start talking numbers, we would be talking of 20% -30% at most, while all the rest can be predicted and planned in advance, to fully be ready. We spent over two months looking at what was happening in China without ever thinking that we might or would be next. We looked astonished as the Chinese Regime built hospitals in a week, while we feelt protected and even immune because of our “healthy eating habits” or the level of excellence of our healthcare systems. Despite all of this, after just one month we entered a state of crisis and we have by now surpassed China for the number of deaths and infections. We just needed a bit of farsightedness and maybe a simple empirical observation, also from the OMS, to prevent and contain the spread of the virus.

There are a number of forward-looking models that are able to come up with apocalyptic scenarios and ways to manage them to reduce the damages for everyone, people and goods. We need to ask ourselves what didn’t and isn’t working in this pandemic in Europe?

Did we ever reflect on why with all the resources that we have equipped the European Union with we still don’t have a coordinate system of Protezione Civile on a European level?

Think of all the deaths that could have been prevented if a European Commissioner, dedicated to Risk Management, existed equipped with personnel and resources, able to coordinate all the Intensive Care of the Member States, with the power to make centralized purchase of medical devices, like the “extremely rare”  masks, and that could have worked together with China and America.

This is just an example that in a top down manner can be replicated up to the smallest community in the world to understand that investing in competence, professionalism, research, training and the creation of good structures can highly reduce the damages of any crisis no matter the nature of it.

The delay, the mistakes and the inexperience of those that, because of their role, found themselves in the position of managing this emergency have cost us lives, the stop of many business and even of the global economy. Having played a role of responsibility in a business or on a political level can’t be the only enabling factor to be assigned the role of “Commander in Chief”. Obviously during a crisis that involves an entire nation, or even the World like the Covid-19 pandemic, it is almost impossible not to allocate the final responsibility to the Head of State, but there is a great difference in taking final decisions based off risk maps that can preemptively point out the major risks and simply reacting when already in the eye of the storm with the sole goal to try and contain the damages.

To conclude this quick examination of some of the major aspects connected to the prevention and manage of any crisis, I think it’s important to once again restate the motto of whomever works in the field of Risk Management: the only effective way to manage successfully a crisis and to contain the damages to people and goods, both on a reputational and financial level, is to know the areas of vulnerability and to constantly map them. Investing in the realization and the update of “Preparedness Plan”, with both simulations and training for the personnel, is crucial and it will become more and more crucial in the future to the point of becoming a real business asset.

The crisis team, that we didn’t mention in the article, has to be a close-knit and stable. Meetings have to be held frequently and resources have to be budgeted. The transversal nature of Crisis Management asks for all areas of a business, that might be at risk, to be involved and heard during any sort of decision-making process. The Crisis Management team has to have members that are experts in the communications department in order to help the technicians and the management with the choice of timing and tone to use when speaking with the public opinion and the authorities.

In a moment of crisis there is no time to learn and the only way to manage an emergency is to have studied a lot before. What is fundamental is being prepared and working with the best team possible.

Dario Francolino

CEO of Axess Public Relations e Professor of Corporate Communications at CUOA (Consorzio per gli studi di Organizzazione Aziendale) Altavilla Vicentina

*Barbara Gaudenzi – sinergie n. 71/06

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