Protecting reputation and value in the face of adversity
As the current pandemic has shown, a crisis can have a sudden and devastating impact on people and organisations of all kinds. According to the World Bank’s Global Economic Prospects Report published in June 2020, forecasters estimate a 5.2 per cent contraction in global GDP in 2020 as a result of Covid-19.
Alongside this, falling stock prices, disrupted supply chains and severe travel restrictions will have left many Bermudian companies significantly more vulnerable to risk. In anticipation of a potential second wave of the virus, or an unrelated crisis such as a hurricane or cyberattack, organisations must act now if they are to ensure their long-term survival. This means learning from their response to Covid-19, evaluating the new risk landscape and ensuring their crisis plans address the current threat level.
Protecting your organisation and its stakeholders relies on being ready to respond to an escalating situation under pressure. As Boeing discovered last year, if you manage a crisis badly a hard-earned reputation built over decades can be lost in a matter of minutes.
So, to avoid the needless devastation to people’s lives and livelihoods resulting from mishandled crises, leaders must be armed with the culture, capability and confidence they need to prevent or overcome future crises.
The value of planningAccording to PwC’s 2019 Global Crisis Survey, by a margin of nearly 2:1 (54 per cent vs 30 per cent), organisations that had a crisis response plan in place fared better post-crisis than those who did not. Equally, those that kept their crisis plan up to date and implemented the lessons learnt were four times more likely to come out on top.
These statistics mirror what we have seen in the current pandemic. Businesses without a crisis management plan have struggled to exert any influence over their coronavirus response. Conversely, those with plans in place have coped significantly better.
For example, while some businesses remained in denial for weeks, one of our clients who recognised the value of crisis planning seized the opportunity to set the agenda and get ahead of the impending crisis.
Guided by a pre-prepared pandemic plan, they began scenario planning the potential impacts of Covid-19 on their business as soon as news of the disease emerged from China.
Consequently, when lockdown hit, they had already implemented a global travel ban for staff, explored contingencies for home working and taken steps to shut down non-essential operations, all actions which enabled them to exert influence over the crisis and protect their stakeholders’ lives and livelihoods.
Building future resilience
So, what can organisations do to ensure they successfully navigate the uncharted waters in which they are currently operating?
A critical first step to building future resilience is a structured review of your pandemic response. By identifying gaps and flaws within it you create a platform on which you can build, leaving you better placed to respond to the next crisis.
The review should involve anyone who played a key role in your crisis response. It should be transparent and constructive, with the emphasis on learning, not blame.
Start by reminding everyone of your Covid-19 crisis-management objectives. What did you want to achieve? What was your end goal? Next consider how your crisis response played out against these. What was the variance between your objectives and what happened in practice?
Take time to explore what worked well and what failed to hit the mark. Why was that? Be honest in your evaluation and ensure you capture actions and allocate responsibility for implementing them.
Creating robust crisis plans and procedures
When a crisis hits, a robust, clear and concise crisis-management plan ensures you set off on the right track. It provides a framework for successfully negotiating the first 24 hours and guides decision-making and prioritisation.
For their long-term viability, organisations with existing crisis management plans should update them now to ensure they can cope with future crises.
For those without a crisis management plan, the time has come to create one. As well as key principles for crisis management it should contain guidance on team activation, roles and responsibilities (who manages what) plus checklists and template materials such as media statements.
Whether you are creating a plan from scratch or updating an existing version, you must brief your team on the new procedures so they can deploy them effectively under pressure. If you don’t, you risk costly mistakes which could destroy stakeholder trust and confidence when the next crisis hits.
Coronavirus is the biggest crisis management wake-up call the world has ever seen. But out of crisis comes opportunity. If Bermuda’s business leaders heed the lessons they have learnt and adapt their crisis response capability accordingly, they will successfully overcome the challenges ahead.
• Jonathan Hemus is the managing director of Insignia, a specialist crisis management consultancy which works with leaders of businesses such as Cathay Pacific, DP World, Movenpick and Sky to ensure they do and say the right things under intense pressure in a crisis. He recently hosted a webinar for the Institute of Directors, Bermuda branch, during which he provided guidance on how to plan and prepare for crises. Mr Hemus can be contacted via firstname.lastname@example.org or through Insignia’s website, https://insigniacrisis.com/. To assess your organisation’s crisis readiness, complete Insignia’s free crisis management scorecard https://scorecard.insigniacomms.com/p/impact-scorecard. In addition you can contact the IOD Bermuda at email@example.com or call 336-2447
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