Protecting Assets, Reputation and Share Value
Crisis Management is in short about protecting the organization’s assets and reputation and ultimately its share value.
But, as crisis management is a fairly new science, little academic research has been carried out so far, although there are various viewpoints available across the internet from a number of subject matter specialists.
Therefore – in my approach to crisis management and response – I am taking offset in the only available research based book* on crisis management which highly inspired me when developing the crisis management plan and CMT setup at Tullow Oil Norway.
*) Crisis Management: Leading in the New Strategy Landscape. Crandall; Parnell, & Spillan (2014). Available on Amazon sites.
A Holistic and Risk-based Approach to Crisis Management
My approach to crisis management is founded in a four-phased Framework as presented by Crandall et al, which is based on their extended research and best industry practices as known today. They explain that “the progression of stages in the crisis management process follows a four-phase sequence. There is the landscape survey, followed by strategic planning, then crisis response, and finally the organizational learning stage”.
Crisis Management Framework
(Source: Crandall et al, 2014)
External vs Internal Threats
Crandall et al are pointing out that “human-induced mis-steps are at the core of the majority of crisis” and are bringing forward that a 2010 survey revealed that “50% of crises originated with management and 32% were initiated by employees”. Although these figures very likely are not directly transferable to our industry, they indicate that crisis threats do not only originate from operational incidents, severe weather conditions and the external landscape, but do indeed also exist inside our organization. Thus, the risk mitigation and range of corporate type exercise scenarios should reflect both internal and external crisis threats.
The Crisis Response Wheel System
My preferred method for managing a crisis response is visualized in the ‘Crisis Response Wheel’ which is divided into six phases: ‘Situation Analysis’, ‘External Analysis’, ‘Internal Analysis’, ‘Strategy Formulation’, ‘Strategy Execution’ and ‘Strategy Control’.
The purpose of the Crisis Response Wheel is to guide the Crisis Management Team [CMT] through the crisis response processes in a planned and structured way.
It is though critical for any user of the Crisis Response Wheel to acknowledge that the wheel is meant as a guide, thus the indicated times of duration for each phase are estimated times only.
Especially the ‘Strategy Control’ phase is difficult to estimate as the duration of this phase highly depends on external factors. Finally, during the Strategy Control phase, the CMT Lead must consider when to re-enter the Crisis Response Wheel and move on to the next Situation Analysis meeting.
Crisis Response Wheel
The Six Phases of the Crisis Response Wheel
Phase 1 – Situation Analysis
The purpose of the Situation Analysis is to find as many facts as possible about the incident. Facts are put into a ‘Situation Report’ where also initial actions are stated. Taking offset in the Situation Report it is now possible for the media team to develop media statements.
Crisis Response Wheel Flowchart [left] and Situation Analysis Board [right]
Phase 2 – External Analysis
The external analysis is an integrated part of the complete SWOT Analysis and focuses on external opportunities and threats related to the particular crisis situation. The goal here is to get a status on the external situation and thereby being able to consider threats but also identify opportunities. The external landscape survey should consider Political/legal, Economic, Social [hereunder media], and Technological forces, also abbreviated as PEST.
Phase 3 – Internal Analysis
The internal analysis is an integrated part of the complete SWOT Analysis and focuses on internal strengths and weaknesses related to the particular crisis situation. The goal here is to get a status on the internal situation in the organization, to whether there are any issues that could influence and thereby strengthen or weakening the overall situation from an internal point of view. The internal landscape survey should consider aspects as Technology, Human resources [hereunder internal partners], Utilities, Security and Time constraints, also abbreviated as THRUST.
SWOT Analysis Board
Phase 4 – Strategy Formulation
The output of the Strategy Meeting is a Strategic Action Plan. The strategy formulation must be based on the Situation Report and the results of SWOT Analysis and the plan should be dynamic and developed for the particular incident/crisis. It should include objectives, strategies, focus areas, limitations, planned actions and if decided media statements.
Phase 5 – Strategy Execution
The output of the strategy execution is the implementation of the Strategic Action Plan. That can be done using a step-by-step approach:
- Visualize and communicate the strategy
- Delegate tasks
- Measure and report progress
- Make decisions to keep the strategy current and on course
Phase 6 – Strategy Control
Strategy control is a type of Performance Analysis that is benchmarking between ‘What was planned’ and ‘What has happened’. It is as such a tool which can be used for Strategy Alignment. The chosen strategies might not have worked 100%, thus a strategy alignment may be needed in order to meet the set objectives.
Performance Analysis Board
A final word on the Crisis Response Wheel System
A successful application of any type of response system requires the full understanding of that system and also that it has been properly introduced to and frequently trained by all CMT members. Look up the courses here
However, you will also need the necessary tools included in the Crisis Response Wheel System [CRW-S] which can be found in the online shop, where image file versions comes at no costs and 100% customizable files can be purchased in various large scale formats.
Therefore, you should be able to download the whole system. But before doing so, then I could suggest that you book an online coaching session where you can seek clarification and get the necessary advice to help you make better and informed decisions about the implementation.
Crisis Response Wheel with Meeting Agenda