(July 2007) —“What is the worst thing that could happen to your company and what would you do if it happened? Would your company survive? Or would you be unable to recover and forced out of business?” asked Larry Eils, National Automatic Merchandising Association senior director of technical services. Eils introduced NAMA’s new Crisis Management and Response Manual (How to Plan for, Respond to and Recover from a Business Emergency), at a presentation during the NAMA Spring Expo.
Eils described a “crisis” as any situation that runs the risk of escalating in intensity, interfering with normal business operations, attracting close media scrutiny, jeopardizing the company’s image and damaging its financial position.
Every business is vulnerable to sudden disruption if a key employee is injured in an accident, a power outage disables its computers or a tornado, fire or other natural disaster destroys its facilities, and it is essential to plan in advance for such contingencies, Eils emphasized. He pointed out that the stakes are higher for companies that handle food, since incorrectly handled, stored or transported food products can have a detrimental impact on public health and safety that can impact anyone along the supply chain.
“Unexpected emergencies can momentarily shut down operations, or even worse, put you out of business for weeks, forcing your customers to go elsewhere – and stay there,” Eils cautioned. “Are you prepared for this? You may not be able to avoid a disaster, but you can be prepared when it hits.”
It is essential for operators to evaluate all crisis possibilities, consider their resources and commit to a strategic plan for crisis and recovery management. The new NAMA Crisis Management Manual is designed to facilitate this process.
According to Eils, a carefully developed crisis management plan includes a strong public relations component to protect the company’s reputation. “Crises, in almost all circumstances, immediately trigger a deluge of questions from many different areas,” noted the NAMA executive. “Employees, reporters, customers, government officials and local residents want to know what happened and to whom, when, where, how and why. Companies that wait to answer those questions often suffer unnecessary financial, emotional and perceptual damage. The ability to communicate quickly and effectively is clearly an important component of successful and effective crisis management.”
Planning for recovery is an essential part of the crisis planning process. It should be done at the senior management level, with predetermined actions and processes documented and distributed to key team members. “Understanding recovery as a process will prepare your crisis management team for the challenge of recovery, no matter what direction the crisis takes,” emphasized Eils.
Guiding users step by step through the crisis management process, Part I of the NAMA Crisis Management Manual begins with establishing a crisis management team, which generally includes three to five representatives from different parts of the organization. In selecting the team, operators should choose individuals who are very familiar with the company, have authority to make key decisions and will be readily available through all phases of a crisis.
The operator then should designate a lead staff member to manage the development of the crisis management plan, and delegate the research and design of different portions of the plan to team members.
The crisis management team begins its work by identifying the risks to which the business is vulnerable and detailing what can go wrong in the business as a result (such as losing a building or being unable to access computer files). The next step is to decide how to respond to each identified emergency, such as making an agreement in advance with another operator for reciprocal sharing of space if the facility of either is destroyed. For each potential situation, there must be a plan in place to keep the business operational in any way possible – and to communicate with customers and suppliers, Eils pointed out.
One or two team members should be designated to assess the degree of risk to life and property for each type of crisis, and the plan should spell out who is to be notified during various types of emergencies. “Make sure everyone involved knows what to do. Train others in case you need backup help,” Eils suggested.
With the team in place and working, it is essential to schedule regular meetings so developers of the plan can compare notes, make sure that content and efforts are not duplicated and verify that information is accurate and consistent.
Procedures for employees who are responsible for shutting down critical operations, equipment and business activities before they evacuate the facility need to be included in the plan, Eils emphasized. Top company officials should be specific in defining the level of authority vested in the team, as well as the chain of command within the team itself. Additionally, each member should understand who will make the ultimate decisions regarding the response to such crises as product recalls, lawsuits and investigations, and who will be responsible for communicating with the news media.
In many crisis situations, the legal implications can have a resounding impact on a business. As a result, the crisis management team should work with legal counsel to research all the laws and regulations relevant to each potential crisis, and be prepared to identify clear corporate policies for each case, according to Eils.
“The company spokesperson must understand, in advance, what comments to make to a victim or the media when a crisis occurs,” he added.
Some crises may raise both federal and state legal questions, while others only involve local law. Communication with a qualified attorney will help the crisis planning team identify those issues and prepare appropriately for them.
The crisis planning team must also consider specific training, practice schedules and equipment requirements for the employees who are responsible for rescue operations, medical duties, firefighting and other responses to an emergency at the worksite.
Also important in mitigating the effects of a crisis are drafting and publication of emergency notification and building evacuation procedures, as well as training and drill in fire extinguisher use, basic first aid and cardiopulmonary resuscitation (CPR).
Evacuation procedures should include a designated assembly area outside the facility and a process to account for all employees after an evacuation. Operators must also be prepared to explain to employees when, if and how to report to work following an emergency, and be clear on how their jobs may be affected. “Do you have an active and accurate list of all employees, with their addresses and phone numbers – including cell numbers? Do your key people have a copy of this list at the office and at home?” Eils asked.
Planning for emergencies also should consider improvements to infrastructure. For example, it is worth thinking about whether to install a generator onsite, with a supply of fuel, to avoid interruption to business if the electrical power fails. Eils also advised operators to survey their facilities and make plans to protect outside equipment and structures from weather-related catastrophes. Other prudent precautions include having portable pumps readily available to remove flood water, as well as battery-powered emergency lighting.
It’s also advisable to have a backup computer offsite, and a plan for moving records and computers to another location immediately following a crisis that shuts down an operator’s facility.
“Finally, and most importantly, your customers need to be considered. Be sure that you have a way of contacting your regular customers, if the need arises,” advised Eils. “A press release, an email or a sign that directs them to a new location or provides them with information on when you’ll be back in business can go far in reminding folks that you know your reputation depends on taking care of your customers.”
He added that operators must plan in advance to continue serving customers that don’t close their businesses as a result of a regional crisis that affects the vending operation, and set up ways to communicate and stockpile supplies to assure continuity of service.
The first section of Part Two of the manual is a workbook with samples of all the forms that the crisis planning team needs to fill in, in order to create a plan. Included are a letter of support that shows endorsement of the plan by top management; a form for designating the crisis management team, segmented by legal, human resources, operations and communications functions; and forms on which the team outlines key areas of vulnerability, tools for gathering facts, methods for continuing day-to-day operations, and plans for communicating with employees, customers and suppliers.
Other useful tools include forms that designate the spokesperson who will talk to media and government officials; a “crisis facts and figures” book; and guidelines for creating specific response plans.
Section Two also offers sample crisis scenarios and suggests ways in which to handle them. These include natural disasters, product tampering cases, investigations, civil/criminal lawsuits and an immigration/naturalization raid.
Natural disasters are detailed in Section Three, which recommends the procedures to follow in case of a fire, flood, hurricane, tornado, earthquake or technological emergency.
Worksheets to use during the crisis are supplied in Section Four. These include guidelines for onsite fact gathering, a news media worksheet, a news media communications plan, a crisis declaration decision worksheet, a crisis team relocation worksheet, an offsite office needs worksheet, and pointers for government, employee and customer communications as well as post-crisis followup.
Included in Section Five are samples of statements the company might make to the media, including victim response guidelines and how to communicate to the media about victims, questionable business practices, product tampering, worker injury, health and sanitation issues, discrimination, sexual harassment and environmental concerns.
Section Six offers guidelines for dealing with federal agencies including the U.S. Food & Drug Administration, Environmental Protection Agency, Occupational Safety & Health Administration.