Six steps to help your company survive a crisis
By Larry Mondschein, Ph.D., BSR
Today’s headlines about the swine flu signal a global pandemic, and officials around the world have acted swiftly to prevent its spread, issuing travel advisories for Mexico and the United States.
Many in the business community are now wondering how this will impact their company. While this certainly isn’t the first crisis the world has faced, it seems like we treat every crisis as if it were unique. But to sustain the enterprise and customer confidence, corporations need to be prepared in the event of serious business interruption — be it due to the swine flu or a drop in orders based on the economic crisis.
According to a Harris survey of 52 senior executives of Fortune 1,000 companies, only 15 percent said they were prepared for a worst-case scenario and would assign their companies a grade of C+. The author concluded that either you are ready or you are not ready to handle a crisis. Therefore, the 15 percent might deserve an A, and the rest an F. Would your company make the grade?
The key to weathering the storms of an increasingly uncertain world is to build safeguards into your business strategy. For those who embrace corporate responsibility, this is especially important. When things deviate from business as usual, having this plan in place means you have resources strategically positioned throughout the global enterprise to remain in business, and possibly come out ahead of the competition.
Beyond today’s swine flu scare, there are numerous examples of product recalls, material contamination, suppliers filing for bankruptcy, and labor disputes in manufacturing plants that threaten business continuity. The results can be devastating to the company as well as to the customer.
As corporations look back on the events of the past several months, the time has never been better to think in a socially responsible manner to reduce the level of risk throughout the global organization and fill the gaps in a company’s corporate responsibility strategy.
What follows is a list of six steps that can help companies survive a crisis. After all, as we learned from the swine flu, no one ever knows when the next incident may strike.
1. Evaluate your crisis management and communications strategy to ensure that it remains relevant and up to date. Include executive management teams along with backup and support staff to lead and follow up on these efforts to recover the business.
2. Prepare standby statements in advance of the crisis to ensure that they reflect ongoing business priorities and strategies. A reliable predictor of business survival is how well senior management handles the first 48 hours of an incident.
3. Ensure that the business recovery strategy has been vetted by key departments, including public relations, operations, regulatory/quality assurance, human resources, legal, supply chain/procurement, product management, and sales/marketing.
4. Test the entire plan via a tabletop exercise with key management participation. Recognize that there will be areas identified for improvement. The key message here is that there has never been and never will be a perfect plan. Think of the tabletop as an important part of your continuous improvement process.
5. Document your management action plan. Identify responsible people and make assignments with realistic deadlines for completion. Accountability and follow up needs to be a priority, as does keeping the plan up to date to reflect the current business environment.
6. Ensure that senior management has endorsed the business recovery strategy and embraced it as a tool to sustain operations, not only to be taken out in the event of a crisis.
This framework is designed to be part of your overall business strategy to ensure that the people, products, and services throughout your supply chain are safe and secure — and that your business is able to serve your customers without interruption.
Lawrence Mondschein, Ph.D., is Director, Pharmaceuticals & Biotechnology, at Business for Social Responsibility.
(China.org.cn April 28, 2009)
