WHAT IS A CRISIS?

The crisis, a universal phenomenon

Because a crisis spares no-one and knows no borders.

New Caledonia is in itself a small market with few media and few stakeholders, … an island on the fringes of the world, at first sight easy to manage, yet the risk of crisis is very real.

No organisation, public or private, is immune to a crisis!

Des exemples ici et ailleurs

Some examples from around the world

TOTAL

Following the shipwreck of the Erika off the coast of Brittany, the image of the Total group was suddenly and lastingly damaged. 2 years after the incident the company was at the bottom of the image barometer of French enterprises.

sociÉtÉ le froid

A video posted on Facebook reveals sales practices set up by the company to organise the black market for alcohol in the country (a video since seen more than 120,000 times)

UNITED AIRLINES

The airline company lost 10% of its value on the stock market after some information was clumsily taken up by a financial analyst without any verification then announced by a national press agency

concordia

The case of the cruise ship Costa Concordia running aground on the coast of Italy, with 32 victims, was especially marked by errors linked to successive versions relating to the causes of the accident, the behaviour of the captain and witness statements from passengers contradicting the official version.

Comment reconnaitre une crise ?

Firstly, what is a crisis and how to recognise it ?

Specifications

Examples

The most serious crisis

Very existence of the enterprise brought into question

Doping on the Tour de France

Serious crisis

Reputation (image, legitimacy) brought into question

Findus(Horse meat), Société Générale Bank (Kerviel)

Crisis

Stakeholder crisis, without direct responsibility in the enterprise

Death of Steve Jobs, former CEO of Apple

Difficult situation

Situation that puts an organization under stress

Departure of a key person, persistent rumours

HOW TO RECOGNISE CRISIS AND DYSFUNCTION

An internal conflict, a malfunction, the error of an employee or an accident do not automatically become crises, it’s sometimes simply the incapacity of the organisation to deal with a difficult situation which aggravates the problem and turns it into a “crisis situation”.

A crisis generates 3 major phenomena 

  • Internal/external overburdening that overwhelms the ability to communicate
  • A malfunction in the classic system
  • A potential challenge to the company, to people, to the company’s

Une crise, un événement à fort impact

A crisis ? A dramatic event with a strong impact

A crisis marks the history of an enterprise. It becomes an historic milestone from which everyone is able to situate himself at that point time and however the event was managed, it becomes part of the culture of the enterprise.

This implies that a crisis has to be managed both internally as well as externally. It is the paramount indicator of good crisis management.

The groups a company addresses during a crisis will remember the reaction of the company towards them, more than the event itself.

How to assess the risks for your company ?

There is a confirmed theory throughout the world relating to risk occurrence. Those companies the least prepared are always those that suffer the most damage, leading sometimes to the actual disappearance of the enterprise.

“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” Warren Buffett

simulate to evaluate

All companies seek to improve their performance, from management level through to their reputation via. their operations. A crisis is a formidable indicative factor of the solidity of your organisation.

Crise = opportunité

Crisis = opportunity

Crisis = opportunity

In Chinese, two ideograms stand for “crisis”, these are “danger” and “opportunity”.

In order for a crisis to rhyme with opportunity, real time crisis simulation is an extremely efficient diagnostic exercise.

By provoking the crisis, the debriefing and the development programme yourself, you are able to test the teams and the organisation, reinforcing collective feeling and efficiency if it is well managed.

A crisis is not a fatality: the more an organisation is prepared the less the need to activate crisis management. Many situations classified as “crises” are in fact difficult situations which are easily dealt with by a well run company.

Putting into place crisis management is costly and risky. The preparation of a crisis plan and the implementation of this plan for the organisation automatically increases the solidity of the enterprise.

Les conseils clés

Key advices

BEFORE THE CRISIS: BE PREPARED …

A company which improvises exposes itself to a risk it could have anticipated in the same manner as a financial or legal risk.

A company which is prepared is more capable of containing and dealing with a crisis to limit its duration and its impact, especially on its reputation.

To anticipate is to:

  1. Restrict or even suppress crises known as “symptoms” (a crisis stemming from the incapacity of the enterprise to manage a difficult situation)
  2. Be operational as quickly as possible (since the first hours are crucial)
  3. Develop the teams and create cohesion

Anticipating collectively:

The notion of crisis is relative to each person. Having a different interpretation of the same event can itself generate a crisis (not setting off the alarms or a deficit of information, etc.)

Being prepared is to be set to face a crisis

The best moment to identify risks, to simulate the consequences of a crisis, to prepare your teams and to set up the right procedures, is during calm and normal times.

It’s a little like checking to see if your boat will hold up to a storm and trains you in the right reflexes.

DURING THE CRISIS: IN THE EYE OF THE STORM

The first hours are crucial. The shock of the outbreak of the crisis can throw the company into panic, or into denial.

 

Stress can then lead to taking incoherent decisions which are only aiming to manage the short term.

This is a major threat.

Keeping a cool head, bringing your crisis team together and defining a realistic objective associated with efficient steering, often constitutes the best guarantee.

While you are dealing with the crisis on the ground, don’t forget the manner in which it will be perceived.

The reputation of your enterprise or the internal climate have necessarily been affected; the diagnosis will enable you to review the results correctly and to reconstruct a strategy and define your actions.

Did you build your strategy based on a context which has just collapsed ? Correctly identifying changes will allow you to target strategic decisions and to define the proper management of change.

The quality of the analysis will allow the correct strategy to be defined to retake control over your reputation.

AFTER THE CRISIS, DRAW THE LESSONS

A crisis can fundamentally change the life and culture of an enterprise, or even a region. The post-crisis diagnosis is an extremely important moment.

A crisis can result from a defect within the company or simply from fragility.

By identifying it is to correct it.