When I worked as a journalist in the financial services industry, I discovered that risk management, and risk assessment, form a major part of what insurers do. They have whole departments dedicated to this function with risk analysts who get paid a princely sum of money to predict future risk events.
My initial reaction was that this was an exorbitant expense for an event that may only happen one in every 10 or 20 years. Not only has Covid-19 convinced me to become a believer in the importance of this function, but the daily risk management of cyber-attacks and data leaks continue to reveal its true value. Think of Transnet and the reputational damage that company suffered following its recent cyber-attack.
This editorial focuses on proactive risk management. How do you know that a company is responding well to a crisis? Especially if that crisis has tipped the company into financial distress?
I recently read an article on forbes.com which quotes industry experts on how to develop a definitive checklist for evaluating the impact of a company’s crisis response.
Assess how well-prepared you were
Success is often measured by how well you have mitigated a situation. It comes in various forms, such as the story not making the rounds on social media, your brand not being mentioned and more.
Internally, success is having prepared your organization in hopes that it never has to act on or utilize any of your prepared tools. As with anything in life, if you are overprepared, you will have success.
Lee Gordon, Brunswick Corporation
Measure success against your strategic objective
There is no one-size-fits-all metric for evaluating a crisis response, and there shouldn’t be. When managing a crisis, organizations must determine their ultimate objective, devise their response strategy accordingly and measure their success and struggle against it.
Too many organizations get bogged down in competing objectives and noise, which all too often prolong or worsen their crises.
Anne Marie Malecha, Dezenhall Resources, Ltd.
Track RFC metrics instead of ROI
Rather than treat a crisis like any other ROI-focused marketing challenge, look to measure resolution and positive change instead.
Did your response help those most impacted by the crisis? Did your response effect change designed to prevent future crises? Did your response solve the problem at the root of the crisis? Tracking those RFC (results from change) metrics will have a more sustainable impact.
Leslie Poston, Austin Data Labs
Evaluate how much news of the crisis has spilled
No news in the media or on social platforms is the best measure of a well-managed crisis. Any crisis calls for internal agility to manage the situation and close all loops meticulously.
What works well is to have well-defined roles, maintain regular monitoring, keep information flowing constantly, identify experts and empower individuals. If news does leak out, then minimize the impact by being agile, authentic, empathetic and relevant.
Arati Mukerji, Tata Communications Ltd
Align a range of metrics with desired performance outcomes
From operational metrics, such as the time it took to notify the executive leadership team and employees, to revenue metrics, there are multiple ways for businesses to effectively measure the impact of a crisis response.
This range of metrics provides businesses with an opportunity to align with the performance outcomes they desire.
Celeste Malia, Expert Marketing Advisors
Measure short-term sentiment and long-term perceptions
An organization can measure the sentiment of the immediate public response on social media and assess if it’s improves through the crisis management process.
The long-term impact should be measured using a perception study. Quantitative and qualitative research can provide critical insight into possible reputational damage that might need to be repaired.
Jamie Ceman, Chapman University
Survey internal stakeholders to assess their concerns
An organization can measure its success externally through revenue, focus groups and surveys.
However, it’s the internal stakeholders who will keep a company going long after the public has forgotten about the crisis, so alienating internal stakeholders by not attending to their concerns can have long-term effects. Make sure to have surveys and manager check-ins to assess effectiveness internally.
Kyle Scott, Lone Star College
Make smart decisions
Going through a business rescue is stressful. At the end of the day, a BRP can come up with the best possible plan, but the rescue will never be a success if the owners/managers/leaders of the business do not put their best foot forward.
A lot of time and energy will be spent on implementing the rescue plan. therefore, distressed owners need to prioritize their time and energy into efforts that will have an impact on the business and that follow the path of least resistance. They cannot afford to pour all their time and energy into a project that goes nowhere and achieves nothing.
A recent Forbes article points out three ways in which a leader can prioritize their time and energy.
In vs. On the business
A useful way for leaders to look at their role is through the lens of In and On the Business. The In the Business activities are the day-to-day operational aspects of their leadership role. These are the urgent activities that come to the leader’s door and, if they let them, will devour all available energy and time. The On the Business activities are the more strategic leadership responsibilities of their role. These responsibilities are focused on long-term success, establishing culture, developing employees, and innovation. These are the responsibilities that only the leader on any team can effectively perform.
Each leadership role has its continuum of On vs. In the Business responsibilities with each being critical to success. A leader has to define what must be done or nothing else they achieve will matter.
Learn to say no
In our busy and complex world, leaders will often bring the mindset that everything is of critical importance and merits the highest priority. The unfortunate truth is that if everything is a priority then nothing is a priority. A leader must learn to say NO or push back against the inevitable onslaught of urgent activities that will constantly derail them from their most important leadership activities. This does not mean that the leader is not responsive to urgent requests; it just means they do not do it at the expense of accomplishing their most important goals.
Leaders must feel empowered to say “No” to good projects, tasks, and requests that steal their energy and focus away from accomplishing their most important priorities. Leaders must be responsive to urgent requests, just not at the expense of moving forward with their most important goals. The most effective leaders learn to, “Use their Noes to protect their Yeses”.
Lead through coaching
Almost all leaders rise to leadership positions because of their ability to problem-solve and get things done. Too often, when employees come to leaders with their routine challenges, the leader will immediately jump into solving the problem for them. The strategic mindset shift for leaders is understanding that success in their role is no longer to be the chief problem-solver.
Success as a leader is all about empowering others, developing employees, and building strong relationships for ongoing team success. The primary tool to accomplish this mindset shift is coaching. A simple and practical framework for coaching is Sir John Whitmore’s GROW model. GROW is an acronym that helps guide leaders to coach others towards resolving challenges or issues.
- Goals: Questions to uncover the issue and desired outcome: What do you want to accomplish? What are the primary issues or challenges?
- Reality: Questions to uncover their perspectives: Tell me more about the situation? What is getting in the way of success?
- Options: Questions to generate possibilities and solutions: What are your ideas for the next steps? How do you think you should move forward?
- Way Forward: Questions to define actions and accountability: What are your next steps? How will you keep me informed of progress?
Leading with questions does not stop the leader from sharing their experience, insight, or direction. Questions do allow the leader to understand the employee’s perspectives before making a more informed choice about what input is needed to support the employee’s success.
The role of BRPs
Where do BRPs fit in?
Developing a strategy to manage a crisis within a business is much like developing a business rescue plan. each plan is unique because companies face unique challenges that lead to the crisis that they are facing.
The seven steps mentioned in this article serve as a checklist that will allow business owners to take a step back and look at their business from an unemotional point of view. It also holds them accountable and provides them with a benchmark that can be used to make an honest assessment of their business.
BRPS can guide their clients through this list and help them assess the efforts that are being made to manage the crisis that they are facing.
The second seven tips on how to measure the impact of a company’s crisis response will be published next week.