<p><em>A crisis is any high-consequence event that has the potential to threaten an organisations existence, writes <strong>Amry Junaideen</strong></em><br><br>From an accident that disrupts your supply chain to a firestorm in social media, companies manage minor crises all the time. It's part of doing business. But dealing with a major crisis is a different matter. The focus is on a major event, or series of escalating events, that threaten an organisation's strategic objectives, reputation, or viability. It is the nature of crises to bring with them chaotic and uncertain environments, where impacts are difficult to assess and even more difficult to manage.<br><br>One such recent example is the packets of Nestle's Maggi 2-Minute Noodles that triggered India's worst food scare in a decade almost got lost in the post. Returned months later to the north Indian food inspector who first sent the samples - after a detour via Shimla in the Himalayas - the consignment eventually reached a laboratory in Kolkata, where tests found seven times the legal levels of lead. From there, what began as a minor labelling dispute that according to a local magistrate could have been settled with a $400 fine, spiraled into Nestlé's worst public relations crisis to date in India.<br><br>By definition, crises have far-reaching implications. Whether because of purposeful acts, simple mismanagement, or something else, crises often begin small but often escalate into full-blown events.<br><br>No one knows when a crisis will demand the best your organisation can deliver. These kind of crisis lay bare the readiness and responsiveness of an organization. They test a company's values, leadership and character at a time when there is no room for error. In today's world, technology and social media have dramatically increased the visibility of crisis, which can lead to greater reputation risk. Among S&P 500 companies, reputation accounts for close to 26 per cent of market capitalisation.<br><br>Crises are often multi-dimensional and are growing in intensity and frequency. A series of escalating events or triggers-or even a combination of issues and events-could collectively result in systemic weaknesses that undermine trust and reputation. The table below lists, what we believe, are some key triggers and threats leading to a crisis.<br> </p><table align="center" border="1" cellpadding="1" cellspacing="1" style="width: 500px;"><tbody><tr><td><a href="http://bw-image.s3.amazonaws.com/table-triggers-popup.jpg" target="_blank"><img alt="" src="http://bw-image.s3.amazonaws.com/table-trigger-thumbnail.jpg" style="width: 550px; height: 149px;"></a></td></tr></tbody></table><p><br>Addressing these kinds of threats requires organizations to step forward with decisive leadership and actions that are wholly consistent with their core values and character.<br><br><strong>What Companies Need To Be Mindful Of?</strong><br>It's natural to think of crisis in spectacular terms - physical catastrophe, international conflict or sudden financial failure. But in practice, a crisis is any high-consequence event that has the potential to threaten an organisations existence.<br><br>An organisation need a range of capabilities to manage Crisis effectively, including clear command structure, common situational awareness and transparent communications. Crisis Simulation is a demonstrated technique for developing and testing these capabilities using life lie scenarios models.<br><br>When crises are managed well, stakeholder value can actually increase. And, of course, the opposite is also true. There is no sure way to destroy value than in falling to manage a major crisis effectively.<br><br>Based on our experience there are essentially, five lessons, about crisis management that C-Suite executives need to bear in mind<br>1. Don't wait until a crisis hits to get ready. Monitoring, preparation, and rehearsal are the most effective ways to get ready for a crisis event. Organizations that can plan and rehearse potential crisis scenarios should be better positioned to respond effectively when a crisis actually hits.<br>2. Every decision during a major crisis can affect stakeholder value. Reputational risks destroy value more quickly than operational risks.<br>3. Response times should be in minutes, not hours or days. Teams on the ground need to take control, lead with flexibility, make decisions with less-than-perfect information, communicate well internally and externally, and inspire confidence. This often requires outside-the-box thinking and innovation.<br>4. You can emerge stronger. Almost every crisis creates opportunities for companies to rebound. Those opportunities will surface only if you're looking for them.<br>5. When a crisis seems like it's over, it's not. The work goes on long after you breathe a sigh of relief. The way you capture and manage data, log decisions, manage finances, handle insurance claims, and meet legal requirements on the road back to normal can determine how strong you recover.<br>Five key areas which represent key opportunities for improvement in the Crisis Management Approaches seen today are clearly in the areas of<br>a) 24/7 monitoring capability, which is necessary to track all the relevant sources of data for potential business disruptions,<br>b) Crisis Simulations where events or relevant crisis can be simulated for effectiveness, readiness and robustness of once model<br>c) Real time response, which considers an organizations ability to respond with the necessary expertise<br>d) Crisis communication which delivers business insights and financial acumen to protect shareholder values.<br>e) Fluid enterprise architecture that gives an organization the ability to respond to a crisis situation quickly but also enables it to address the crisis with the best tools in its arsenal - across all 3 facets of its architecture - people, processes and technology.<br><br><em>The author is senior director, enterprise risk services at Deloitte in India</em></p>
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