Crisis planning and preparation

Authorship

Andrew Taylor, chief executive officer, Bronzeye Group, London, United Kingdom

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Ports and airports are national assets. Usually high profile and expected to be resilient, they are also inherently dangerous places. This combination of factors ensures that any accident or event is likely to be picked up by the media quickly. Whether the story stays as local news or escalates to the national and international media is obviously dependent on many factors, often completely outside of the control of those who have to deal with it. Nevertheless, the way in which an event is managed from the outset has the potential to adversely affect business continuity for years to come. In addition to the endemic high risk within a port and because of their high profile, ports can expect to attract the attention of terrorists looking for publicity and organised criminals looking for opportunities. This ‘threat mixture’ demands a sophisticated and intelligent plan to mitigate risk and to drive response when an event occurs.

As with all things injurious, prevention is far simpler and much cheaper than treatment and cure. Unfortunately for CEOs and boards, who are always mindful of costs, that fact may only become obvious with hindsight. In addition, company executives and managers are increasingly considered to be criminally liable for negligence on the part of their companies. Events are statistically inevitable. Yet our experience at Bronzeye Group is that our advice and training is often sought in response to an event rather than to help plan and prepare for such a probability.

Th e US Fe d e r a l Eme r g e n c y Management Agency (FEMA) sums up the challenges faced in this area: “The emergency management community faces increasing complexity and decreasing predictability in its operating environment. Complexity will take the form of more incidents, new and unfamiliar threats, more information to analyse (possibly with less time to process it), new players and participants, sophisticated technologies, and exceedingly high public expectations. This combination will create a vastly different landscape for risk assessment and operational planning. Pressure to perform in this environment will be extraordinary.”

The Deepwater Horizon example

The BP/Deepwater Horizon oil spill in April 2010 involved large corporations with a global presence – BP, Anadarko, Halliburton and Transocean were all key stakeholders. They got into collective trouble over their poor handling of something which they might reasonably have expected to be a possibility, and should therefore have prepared for. The underlying cause of the event may have been an attempt to reduce operating costs, but poor crisis management reversed any savings. In May 2010, BP CEO Tony Hayward commented: “I would like my life back” in a television interview which caused outrage at the time, this came in
the middle of an event which turned into a disaster and swiftly, a fiasco.

Deepwater Horizon was operating in 1,500 metres of water 50 miles off of the Louisiana coast – a hostile environment dealing with a volatile substance. Just like ports, oilrigs are home to risk and threats. This particular event ultimately cost the companies involved (and their insurers) billions of dollars and will continue to do so for the foreseeable future – legal experts talk of a 20-year legal horizon. At this stage, a compensation fund set up by BP had paid out over $US12.6 billion in compensation. The disaster ultimately cost Hayward his job too – his poorly chosen comment shows how important it is that those who face the press on behalf of companies must be properly briefed and prepared.

The parties involved in this incident should have had a combined crisis management plan and their teams should have been working together. This seems not to have been the case, and the result was significantly detrimental to business continuity. It is possible to assume two things: firstly, that the crisis management teams at each of the companies were unlikely to have trained and practiced together and secondly, that a credible, coordinated, mutually beneficial crisis response was not produced when needed.

Learning lessons 

In the case of the Deepwater Horizon disaster, it seems that everything that could have gone wrong did go wrong. Thankfully, few of us are likely to face such a catastrophic event. But it’s not only major events that can cause critical problems for business continuity. Small events can quickly spiral out of control when poorly managed. That is why we have to plan for the worst and hope for the best. In the Deepwater Horizon example, instead of a co-ordinated and well-rehearsed damage limitation exercise, we saw BP become the news story. Both the media and the public have a preference for bad news. Allegations of incompetence and criminal negligence quickly followed, the results spiraled until the American public began to boycott then blockade BP filling stations.

Media management and communication must be part of a crisis management plan. If the media is allowed to get into a mindset that there is culpability, they will dig into that story. It is not enough to merely issue press statements or hope that your staff are saying the right thing on their respective social media outlets. Systematic, proactive handling of the situation in combination with effective management of the underlying incident is the only answer.

Deepwater Horizon provided us with a very clear demonstration of what can happen when the crisis management ball is dropped. If the right personnel are not in place, if they are not adequately trained and prepared, they will always struggle to deal with the handling of an incident, even a simple one.

Spot the problem and resolve to solve it

Smoking kills one person in every two of those who participate in the habit. But if two smokers were chatting during a smoke break, each would likely assume that the other one would be the unlucky one, not him/herself. Sadly, it seems that many businesses follow a similar logic when formulating crisis/disaster planning into their corporate plan.

In the event of an emergency, critical support from local and national agencies may not be forthcoming – their assets are finite and they will be prioritising their response accordingly. Governments generally require businesses to take care of their own incident response planning and preparation. Some do. But often this preparedness is honoured more in the breach than in the observance. The facts are sobering on this but there are many companies – and this includes some major names – which treat this as a box-ticking exercise. Many CEOs see this requirement as a chore at best and low-priority at worst and some simply don’t bother at all. It is estimated that as many as 80 percent of businesses will habitually fail to conduct an appropriate level of disaster/crisis planning and preparation into their business routine.

That means that up to 80 percent of businesses have a potentially fatal flaw built into the fabric of whatever they do. Furthermore, resilience considerations should also include business partners, service providers and equipment providers. It is vital for businesses to consider if they could survive if one, some, or all of those elements were removed.

Some businesses will rely on the proactive promises of third party providers. This ticks the boxes and resolves some of the problems on the surface. It can work too, but only if the company proactively supervises/manages the relationship and the training includes these providers. Vigilance can wane with time and you can be sure that it is when focus is at its lowest, a mishap will occur.

A good example of where this type of arrangement went wrong is the 2012 Olympics. The UK government awarded the security contract for the games to Group4 (G4S). Their bid was low but G4S did not provide the required service level and the UK government was forced to deploy thousands of troops to fill the security gap. Unsurprisingly this company’s competence continues to be questioned by the media – as it has also bid for a similar role for the Commonwealth Games to be held in Scotland in 2014. The event caused major problems for the UK government, whose crisis management efforts were constantly playing catch-up with the media.

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