Even rush-hour traffic can’t deflate your mood as you begin a much-anticipated long weekend.  As you imagine relaxing in the sun with a good book, a radio news story catches your ear:

“… A spectacular tour bus crash has claimed at least two lives, sent five others to hospital and is creating traffic chaos on a major highway this afternoon.  An ABC Tour Company bus, with up to 50 foreign tourists on board, careened out of control about two hours ago and crashed just outside the city limits..

“Emergency crews are on scene right now, evacuating the injured and fighting a fire that’s erupted in the area.  Witnesses say a number of injured and bloody passengers were able to escape from the vehicle before the fire started. 

“ABC Tour was in the news just last month when organized labour picketed its head office claiming the company’s use of non-union drivers was a hazard to public safety.  At this point, however, we don’t know what caused this horrific accident.  More on this breaking story after the weather…”

As the general manager of ABC Tour Co., what would you do now?

If you were the general manager of ABC Tour Co., wouldn’t it be nice if:

• you could get key managers together, even if just by phone, for a quick discussion?
• you had an easy way to call key staff back to work on a holiday?
• you had someone trained to talk to the media?
• you knew who to talk to in the police and fire departments to confirm what’s going on?
• you could easily identify who was on your bus – passengers and staff?
• you knew who’s job it was to contact next of kin for injured or killed passengers or staff?
• you knew where to get a replacement bus and crew to continue the tour for those uninjured?
• you knew who else to contact:  insurance companies, hotels, outbound operators, etc.
• you had trained staff able to answer hundreds of telephone calls from victims’ relatives, media, business partners, local officials, lawyers, etc.
• you were confident that your key managers knew what to do right now?
• you had a crisis management plan, with these answers in it, to lean on right now?

Crisis impacts organizations in four ways

Crisis comes in many forms and often happens unexpectedly.  Statistically, 71 per cent of crises are actually caused by smoldering issues[i] – things that have been brewing for some time before they erupt.  However, they generally erupt into crisis because we haven’t noticed them smoldering.  So, when crisis does occur, it often takes us by surprise!

No matter how they’re caused, a crisis typically impacts an organization in one or more of four ways.  In our fictional scenario, ABC Tour Co. will be impacted along all four crisis dimensions: 

• Operational Crisis – the company’s ability to continue normal operations has been damaged.
• Life Safety & Security Crisis – passengers and employees have been injured and killed.
• Reputational Crisis – the crash itself is a threat to the company’s reputation.  The link to claims that non-union drivers are hazardous makes this a particularly volatile crisis.
• Financial Crisis – this crisis will have an immediate impact on revenue, and likely expose the company to longer-term financial risks as well.

 Because of its reputational dimension, this crisis is a major one for ABC Tour Co.  If mismanaged, it has the potential to put the company out of business – and set a precedent that could have a major impact on the industry.  It is complicated even further because there will be a number of active forces involved, beyond the routine investigative authorities, each with an interest that is not necessarily aligned with the company’s:

• a union has previously expressed its opinion about the company’s use of non-union labour – and may seek to exploit this accident as evidence supporting its claim. 
• industry leaders may get actively involved to avoid a public conclusion that non-union labour was a key factor – this may help or hinder ABC’s ability to defend itself.
• foreign governments may get involved, advocating on behalf of injured or killed citizens.
• DMO’s may be involved – looking to protect the reputation of the destination area as safe for foreign travelers.

For ABC Tour Co. to manage through this crisis and emerge from it in a position to continue to achieve its business strategy, it must do a lot of things right.  And it must start making the right decisions immediately.  This is not a good time for “trial and error” management.  Wouldn’t it be nice if its management team had taken the time to anticipate a crisis and lay out some helpful guidelines in a crisis management plan that would help it make better decisions now?

Why plan?

There are many reasons to create a crisis management plan before you need one.  Here are three:

1.  Surviving the Information Gap.  In the early stages of almost every crisis, an Information Gap occurs:  there is never enough information available.  To make matters worse, much of the information that first comes in, will turn out to be wrong.  Unless they have planned and trained for a crisis in advance, most unprepared managers will respond in one of two ways:

• They may avoid making critical decisions until they “have enough information.”  Unfortunately, they may never have enough information because the situation will keep changing, getting worse, while they’re stuck in “analysis paralysis.”
• They may seize on the first news they receive and leap into action – basing their response on incomplete, often inaccurate, information.  While early action is important, it is just as important that it be focused on the right problem.

So what?  So, you should learn, develop and practice ways of making sound, timely decisions without all the information you might normally want.

How do you do this?  Much of what need to do in the early stages of any crisis is the same.  When developing a crisis management plan, you can identify what you will likely need in this stage and build a “tool bag” to dip into in times of need.

You can also break the crisis into bite-sized bits.  Focus your first decisions on containment – taking immediate action to prevent the situation from getting worse[ii].  You don’t have to solve the entire crisis right away.  First, you have to keep it from getting worse and buy yourself some time to assess the situation in more detail and then make a situation-specific plan to resolve it.

2.  Keeping your business strategy on track.  Effective crisis management is not just about surviving the crisis – it should be about managing through the crisis in a way that enables your organization to continue achieving its strategic objectives.

So what?  So, this requires some strategic forethought.  There are many ways to respond to a crisis, but not all of them will leave you well-positioned afterwards to continue on your mission.

How do you do this?  Organizations that perform best in crisis tend to be those organizations where managers have a clear understanding of the strategic goals and key success factors – before the crisis.  This knowledge enables them to quickly recognize when something threatens the group’s mission and to choose response options that have the best short term impact and carry the least long-term risk.  By planning and training in advance, you can help managers make better decisions under fire – and assess their abilities to do so before assigning them key roles in a crisis.

3.  Your insurance company may demand it.  If you are an international tour operator, your insurance company may have already mandated that you develop a written crisis management plan before they renew your coverage.  This is becoming increasingly common as insurers recognize that companies with crisis management plans are more likely to avoid a crisis and, if one does occur, better able to mitigate losses than those that without plans.

So what?  So, If you are an international tour operator, you should contact your insurer to see if they intend to require you to have a crisis management plan.  If so, when must you have it and what must it contain?  Get a head start on planning and make sure your focus is on managing through crisis, not just surviving it!

How to do this?  If you’re starting from scratch to build a crisis management plan, see the sidebar Next Steps for a quick list of how to get started.

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Mark Towhey is an international crisis management consultant who spoke on this subject at the 2004 NTA National Conference in Toronto.  His company, TOWHEY Consulting Group Inc. can be found online at www.towhey.com

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