Smart Business Magazine, Dec 2012

8 Smart Business Houston December 2012 CRISIS MANAGEMENT How proper planning can lead to an optimal response to controversial events Controversy sparks conversation and the recent Penn State scandal is no exception After details unfolded of the abuses committed by former assistant football coach Jerry Sandusky and the schools complicity in covering it up professionals have been talking about the steps taken and not taken by university officials to properly manage the crisis If there can be a silver lining it is that business owners are examining many for the first time how they would handle a similar crisis Organizational crises can explode in an instant These incidents briefly capture headlines but the physical physiological and financial repercussions can have a lifelong impact on people and threaten an organizations profitability productivity and brand image indefinitely Companies must act quickly to contain the damage and minimize the impact Prepare a management plan A crisis management plan helps a company coordinate its response and prioritize its concerns whether that involves protecting people the environment assets or the companys reputation A crisis plan also outlines all aspects of communication flow and who has what responsibilities Those identified to serve on a crisis response team should be familiar with the plan Some companies conduct practice drills to rehearse procedures and identify weak spots In the heat of a crisis a multitude of operational units and functional areas assemble to tackle immediate and tactical matters But when an employees actions intentional or unintentional cause or contribute to a crisis HR often plays a more significant role advising management on how to deal with employees involved as well as those impacted Immediate suspension of employees may be appropriate to allow time to investigate details or accusations Consider too whether authorities should be contacted If a law has been broken the company has an obligation to notify law enforcement officials Management may be reluctant to move too hastily but inaction or a delayed response can be perceived as ambivalence and further damage the companys reputation Companies should have a policy that dictates the precise steps to be taken when there is suspected or alleged misconduct so management can ensure it is following company policy as its continues to examine the matter Above all communicate Communicating internally and externally becomes paramount in a crisis Prompt and proactive communication provides companies the opportunity to tell their side of the story Ignoring or burying bad facts wont change them nor can any amount of spin but open and honest communication can shape how the company is perceived during and after the crisis After the initial impact consider the steps necessary for the company to fully stabilize and ultimately recover There could be ongoing investigations questions of liability or required actions involving workers compensation claims or potential lawsuits Also consider what additional employee assistance may be needed As with many things in business the best defense to a crisis is often a good offense Businesses can prevent many mishaps and certain misconduct by ensuring that employees are familiar with company policies and thoroughly trained on safety protocols And if something still goes wrong having provided the proper instruction may mitigate some company liability Also as with the Penn State scandal ongoing abuse could be stopped and damage minimized if wrongdoing once discovered is immediately reported to appropriate authorities inside and outside the organization Companies should have procedures in place that allow employees to anonymously report incidents without fear of retribution Familiarize employees with those procedures as well as the possible disciplinary or legal ramifications of not reporting illegal activities Promote openness Promote an open culture that encourages forthright communication and forbids collusion and cover ups The most visionary business managers cannot predict the timing or nature of their next company crisis but they do acknowledge that a crisis will eventually occur Preparedness precautions and practice can help companies respond promptly to crises and minimize the damage they can cause Business Initiatives John Allen JOHN ALLEN is president and COO of G A Partners a Texas based HR and administrative services company that manages human resources benefits payroll accounting and risk management for growing businesses For more information about the company visit www gnapartners com Click or scan to read more columns by John Allen