CRISIS MANAGEMENT:
MORE THAN DISASTER RECOVERY

By Gerard F. Ventolo

Crisis Management is to often narrowly viewed as involving only the backup of computer and communications systems. However, in its broadest sense, crisis management involves business survival planning. Crisis Management can be said to consist of an umbrella of communications intensive business planning applications which are not mutually exclusive even though they impact diverse areas of a business organization. The common focus of the crisis management function is best defined in a “non business as usual environment”. The development of an effective crisis management plan affords an organization the ability to respond effectively to an adverse business scenario and actually capitalize on what would normally be considered a negative event.
The discipline of crisis management is gradually being incorporated as a strategic planning tool in many organizations. Current business philosophy indicates that such a planning activity can result in the creation of early warning systems which allow an organization to anticipate a potential crisis and thus preclude the development of a major crisis. Even when the organization fails to avert a crisis scenario, effective crisis management planning can minimize legal liabilities, the loss of public confidence, and the loss of market share. In even the worst case view, a well defined crisis management plan will expedite the recovery of critical business operations.
The key ingredient to effective crisis management is the flow of timely and accurate information to all parties involved in or affected by the crisis. Information and information delivery systems have become the most valuable components of an organization’s infrastructure. In that role, the effective utilization of information serves as the first line of defense against a crisis and is also the most effective vehicle in the process of restoring both business systems and public confidence.
As earlier mentioned, crisis management can be described as an umbrella of communications intensive business planning applications. These applications include: Business Crisis Intervention: The provisioning of a communications plan to address audience specific concerns. Recent product tamperings and recalls have brought this element of the application to the forefront, however, the application also includes a broad range of organizational crises such as: boycotts, labor strife, corporate fraud, management succession, mergers and acquisitions, and negative public relations stories. The fundamental focus of this component of the application is to develop predetermined communications channels through which an organization can deliver a specific message to multiple and diverse stockholders. An example of such channels include the utilization of AT&T 800 Service or DIAL-IT 900 Service for consumers to call for up-to- date information regarding a recalled product. A company may also utilize an electronic mail medium to quickly reach its distributors with critical information. Perhaps most important is the fact that the message heard by the stockholder is that of the company spokesperson, not that of a media observer.
Telemarketing Center Backup: Telemarketing today represents an enormous and growing marketing channel for most companies. If fact, it is estimated that during 1987 more than $150 billion worth of goods and services were sold via Telemarketing. It has thus become critical that an organization take the necessary steps to ensure that this marketing channel is never disrupted. The crisis management application addresses this need in two distinct scenarios: first the loss of the primary center due to a business crisis event such as work stoppages, weather conditions, or a physical disaster; and second, in the event that an existing center is unable to handle seasonal or peak sales periods or special event promotions. In either case it is critical that an auxiliary plan be available for immediate execution to keep the organization’s doors open for business. Such a contingency plan could utilize intelligent network services to route calls to a backup telemarketing site such as American Transtech.
Computer Security and Disaster Recovery: This element of the application focuses on maintaining the security and availability of an organization’s most valuable asset - its information bases. The utilization of automated information bases has created the potential for an entire scenario of corporate crises. The growing dependence of information systems has become so critical that the average business can only survive 4.5 days without access to its information bases. In information intensive industries, such as financial services, the unavailability of the information infrastructure can result in business failure within 48 hours. The protection on this corporate asset has also become mandated in certain industry environments and compliance is not a matter of choice. The development of an effective crisis management plan must focus on both providing for the security of existing information bases as well as a recovery plan to be implemented immediately upon the loss of the infrastructure. A most important aspect of the crisis planning activity is to establish meaningful risk analysis profiles for all critical business functions. The contingency plan should not be determined by the cost of providing redundancies and backup, but rather by the financial impact resulting from the loss of the supported functions. It is often feasible to utilize an outside consultant to evaluate existing security and contingency plans as the consultant is less likely to be biased by internal constraints or predeterminations of what is needed. In all cases, the final product of the planning process should be a living document and a policy which becomes a component of an organization’s business as usual plan.
Crisis Management planning makes good business sense. The impact of a catastrophic event is potentially so severe that prudent management should not risk it. Business functions continue to become more critical and time sensitive. As such, Crisis Management and its contingency planning and preparation must be viewed as both a strategic and operational necessity. An effective Crisis Management planning function can enable an organization to anticipate and manage change. Simply stated, Crisis Management planning is “a smarter way of doing business."


Written by Gerard F. Ventolo, AT&T Crisis Management Services

This article adapted from Vol. 1 No. 3, p. 19.


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