Posts Tagged ‘sustainability’

Recession recovery poses crisis management risks for industry

On the weekend I wrote a post for our new Energy & Industrials team blog, titled Habitual behaviours force shippers and miners into crisis management mode.

The basis for the post was the correlation between:

 “…two seemingly unconnected events…25 people were killed in a West Virgina mine exposion [and] a Chinese coal carrier ran aground on the Great Barrier Reef…I say ’seemingly unconnected’ because geographically the two events are about as far apart as you get. The respective industries are also unrelated…”

The connection is actually in the habitual behaviours performed by the respective companies, and to learn more about those you should click on the link above and read the original post.

What I’m more interested in here is a quick look at the sheer volume of corporate crises that we’re seeing in 2010. At least four major car makers (Toyota, GM, Honda, Nissan) have had multi-market product recalls. At least two major consumer brands (Nestlé, Unilever) have had issues with palm oil. I’m not even going to touch anything that’s been specifically labelled as a “social media crisis” in this list of examples.

Looking at all of these, the common link is still habitual behaviours. Whether it’s cutting corners on safety or engineering standards, taking short-cuts on voyages to speed up transit times, weakening the supply chain by creating untenable bottle-necks or driving suppliers down to almost margin-less prices, or other unsustainable corporate behaviours…none of these things are “one-offs”. They are all tried and tested behaviours that have become ingrained in an organisation’s culture.

When the global financial crisis hit, many of my clients assumed I was run off my feet with crises. The opposite was true. One or two disasters in a recessionary environment will have a much greater impact on business managers than they would do in the good times. (RM, if you’re reading this, I was still busy!)

In the past 18 months we first saw a deluge of stories about banks’ risk managers being ignored, followed by story after story about careers in risk management being the new black. When the economy is in meltdown and your business is more exposed than ever before, you pull all the stops out to ensure crises just don’t happen. When the revenue tap gets turned back to a trickle, you cut “non-essential” operations – those pesky things like marketing budgets (where’s my ROI???), crisis training (why are we doing this if we haven’t had a crisis in three years???), media monitoring (we’ve cut our marketing, we don’t need to pay for media clips???).

Which is why we now have problems.

After 18 months of hyper-sensitive operational behaviour I think companies have forgotten what it’s like to have to deal with a crisis. Regardless of the growth in social media over the same time, the fundamental principles of good crisis management haven’t changed, but it seems the effective execution of those principles has gathered enough dust to make a real difference. This has been compounded by those bad habits being repeated faster, on a bigger scale, as companies try to trade their way back to the heady days of 2007.

There’s not actually any reason why so many of the high-profile crises of the past six months should have made the headlines to the extent they did.

I expect we’ll see still more high-profile crises rolling out before the end of the year. It should be a good year for crisis management consultants, because for every company in crisis today there are usually three or four who were lucky it wasn’t them. But that’s not good news for shareholders.

Climate change: highlighting the importance of behaviour as communication

Last night I attended the launch of the Advance Green Network at Australia House in London. This network seeks to bring together ex-pat Australians, and their colleagues, to help get people involved in the quest for a more sustainable future.

Keynote speaker, Howard Bamsey, Australia’s Special Envoy on Climate Change, made the point that in the lead-up to the UN Conference on Climate Change, COP15, what governments around the world are looking for are commitments. And this is the basis for this post – on an issue such as climate change, the public requires not a communication solution (ugh), but a behavioural one. What is it that I/you/we/they can do that actually makes a difference? And…will you do it?

This differentiation can be a difficult one for issues and crisis management. If your crisis is an oil spill, a plant explosion, a tsunami or any one of a hundred other things that visibly change the world, then your response involves actually fixing something – either patching it up, or eliminating the source of the problem. Clearly that’s behavioural.

The challenge comes with reputation-based issues where there’s a desire to deal with the symptom rather than the cause. Anything that falls under the general heading of “complaints” is usually a good example, i.e. product faults, customer service incidents, automated “help” lines and the like.

In these instances our first reaction is usually to deal with the complaint, and if that’s successful then that’s usually the end of the issue (in our eyes). The problem with this approach though is that it never deals with the cause of the complaint – we just slot into a pattern of complaint, fix, complaint, fix, wash, rinse repeat. Until one day we realise we’ve accrued dozens of complaints, made hundreds of refunds or lost thousands of pounds worth of sales.

For crisis managers then, it’s important when these niggling issues arise to take five minutes out from the problem, and really consider if fixing it requires us to say something, or do something. Think about the message you send by acting, rather than placating. Actions speak louder than words, and for good reason.