The cost of not having a crisis management plan

By on March 16, 2015

Global crisis management guru warns that not being prepared can break a business according to Alan Hilburg, president and CEO of Hilburg Associates in the US and in South Africa.

“A crisis mitigation and management strategy is essential. Just like insurance, you hope you never need it, but not having it can be fatal.”

For nearly 30 years, Hilburg has been one of the most sought-after strategic counsellors in some of the most complex, high-visibility, high-risk crises and impossible situations.

Hilburg first gained global recognition when he led the Johnson & Johnson team in the textbook management of the Tylenol crisis, the number one crisis management case history studied worldwide. He has advised national presidents, university chancellors, members of Congress and many other high-profile individuals who found their reputations being threatened.

Many local organisations lack the internal capacity to effectively respond to a crisis, which leaves consumers scrambling to adjust to outages. Among recent examples here in the public sector are Eskom’s move to load shedding and the strike action at SA Post Office. Companies across the country who rely on these public sector organisations have seen sales drop and costs go up as a result of service disruptions. In both instances, one organisation’s lack of an effective crisis mitigation and management plan has had a knock-on effect on hundreds of companies who did not have an effective plan in place either.

Among recent cases in the private sector is the infamous Cell C banner. The subsequent bad publicity due to how a disgruntled customer’s compliant was handled is a good example of how not to handle a crisis.

Hilburg urges business leaders to ask themselves “What’s the cost of not having a crisis mitigation and management plan? What’s the cost of losing the trust of your customers, your employees, your shareholders, the media or your key regulators?”

He adds that the most common challenges faced when operationalising a crisis mitigation and management strategy include “migrating from having it to ensure it is comprehensive in that it covers all possible vulnerability scenarios, and that all the necessary roles and responsibilities have been understood and confirmed. Everyone within an organisation is responsible for business continuity – from leaders to marketers, to brand custodians to business continuity professionals.”

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