Posted on February 9, 2018

Last week a colleague posed a question in response the World Economic Forums Global Risks 2018 report –

The Global Risk Report identifies extreme weather events, natural disasters and cyber attacks as the top three most likely risks.
How is that changing the way organizations should prepare for crisis?

So at the risk of being drawn in by this leading question – There has always been the need to prepare for crisis and fundamentally nothing has changed! What the report does, however, is reaffirm, is that we are living in an increasing turbulent and interconnected world. This underscores again the need for crisis management as the backstop against failure.

One of the challenges I continue to see is that many organisations erect artificial boundaries around the scope of what their scenario and crisis planning is both there to do and can achieve. Common pitfalls in approaches to scenario/crisis management include:

1. Over segregating planning and response functions instead of leveraging the natural synergy between the two. To paraphrase Eisenhower – ‘it’s the planning – not the plan that matters’;
2. Placing scenario and crisis planning activity within one functional area such as finance, marketing or security. This can often lead to functional bias in the way the planning is conducted and the way that risks and opportunities are considered; and
3. Limiting the scope and complexity of scenarios that are planned for which can often translate into a false sense of readiness.

We cannot neatly package up the different threats into their own scripted response because frankly the crisis that comes knocking will be multifaceted, interconnected, and may indeed cascade into further crises if not dealt with effectively. Take for example the Volkswagen emissions scandal that came to light in 2015 –  this crisis has drained Volkswagen's tank of social capital. Without this to fall back on it is undoubtedly making it even harder for VW to manage this last weeks reputational fallout over revelations it funded studies in which humans and monkeys inhaled diesel fumes.

Organisations can no longer afford to neglect resilience, treating it as an after thought or secondary consideration. ‘Structural’, ‘integrative’ or ‘transformative resilience’ (as described by Roland Kupers on page 54 of the WEF report) should be fundamental and conscious considerations of every business model and related decision.

So to get back to answering the question – Here are my top six recommendations:

1. Deliberately build resilience into your organisation and thereby lessen the likelihood of a crisis impacting you. Prevention is often cheaper than cure, or as Einstein said “A clever person solves a problem. A wise person avoids it”;
2. Align planning and response activity – so those involved are either same team or working in close consort, once again – “it’s the planning – not the plan that matters”;
3. Knock down any silos and let scenario and crisis planning be a cross functional activity with input and expertise leveraged from across the organisation;
4. Ensure the crisis management plan is flexible and agile. It should not be anchored too heavily to any one type of scenario or expectation of how an event may play out; and
5. Get comfortable stepping out of your comfort zone by regular exercising a wide array of complex scenarios.
6. Don’t wait to have perfectly finished plan before exercising it. Practice through exercising lies at the very heart of an effective crisis response capability and you don’t want to be caught short while you were distracted by over thinking the plan. The more you exercise the more flexible and agile your response capability will become.