KEEPING A COMPANY STRONG
IN TIMES OF TROUBLE
By Michael Kutner
Companies generally prepare for emergencies by reviewing insurance policies, implementing back-up computer systems and installing sprinklers, while neglecting the human cost of a workplace crisis and its resulting impact on a company’s productivity and quality. This is unfortunate since, all too often, the impact that a crisis has on employees can financially paralyze a company.
Phillips Sweeney Petrochemical discovered this the hard way. Three years after its Texas plant exploded in 1989, the company had paid over $200 million in liability-related damages such as psychological distress. By 1994, the company still had hundreds of claims pending.
The post-crisis actions of management and fellow employees contribute greatly to the outcome of a crisis. The right actions can minimize post-crisis costs and prevent legal complications down the road.
A crisis need not be a huge catastrophic event to disrupt the workplace. Events such as the fatality of a single worker or a life threatening event such as a bank hold-up can devastate employees and take a costly toll on a company.
What steps can companies take to understand the critical incidents they potentially face and how to respond once the fire is put out or the police have left?
Nobody likes to think about bad things that could happen. But, from a business perspective, it pays to consider the possibility that they might occur. Whether a company is a multi-billion dollar organization, or a local start-up operation, analyzing potential crisis situations is beneficial for several reasons:
* It requires management to think about its company strategically. Asking "what is the worst thing that could happen to this company?" can lead to innovative ways of doing business. Shell Oil Company, for example, uses crisis planning to develop potential crisis scenarios in its long-range strategic business and planning process.
* It highlights weaknesses that might otherwise go unnoticed. A hospital in the South discovered that, in planning for a natural disaster, such as a hurricane, it would have difficulty implementing staff-involved aspects of its emergency plan because many hospital employees would be unable to get to work because of the hurricane.
* It helps management think about ways to prevent or take control of a crisis situation by understanding what to do before a crisis hits or taking action to prevent a crisis from escalating.
In assessing the critical incidents that could potentially affect a workplace, managers should consider the following:
* If any serious accidents or fatalities have occurred in the workplace.
* How much and what types of travel are done by employees.
* How thoroughly the company screens potential employees through background checks and drug tests.
* If the company has experienced any security-related incidents in the last year.
* Whether competitors have faced any serious incidents that could happen to their company.
It is impossible to anticipate every crisis that could grip a company. But that is not what crisis management is about; it’s about understanding the "tools" a company has in its "toolbox."
The fact is, many aspects of managing a crisis can be anticipated, such as dealing with the media, addressing productivity concerns, working with insurance professionals and handling security issues.
While large companies need to have comprehensive crisis management plans, all companies face potential crises. In fact, small and mid-sized companies face the greatest harm from a serious incident because they may lack the financial and managerial resources needed to fully address the post-crisis environment.
To a manager suddenly faced with the aftermath of violence, a serious industrial accident or even a freak rail or plane mishap involving employees, knowing how to handle the issues that will arise can prevent a company from throwing away millions of dollars due to poor decision-making and well-intentioned, but misguided, efforts.
When reviewing the tools in a company’s toolbox, managers should consider these questions:
* Are there formal crisis communication plans in place for addressing employees (including off-site workers), the media, community groups and governmental agencies?
* Are there security procedures to ensure safety of employees and property throughout the crisis and recovery stages?
* Has the organization developed relationships with local law enforcement, firefighting, emergency medical and related government agencies?
* How will the company address and monitor post-traumatic stress in the aftermath of the crisis?
*If certain department or operations have to be shut down, how will employee issues such as job reassignments, layoffs or leaves of absence be handled?
* Has legal counsel reviewed our communications and employee relations policies to protect the company throughout the crisis recover stage?
* Are there employee/family issues that need to be addressed?
Knowing the answers to these questions before a critical incident occurs can be the key to a company’s survival. In other words, planning for the worst is the best thing management can do for the company it represents.
In the aftermath of a crisis, any crisis, the work environment will be different. It will feel different. When managers understand how a critical incident can affect a workforce it becomes easier to determine the most appropriate way to address employee concerns.
The number of reactions that employees may experience following a catastrophic incident vary as widely as the possible types of crises which can occur. Staff may be affected by several things: their proximity to the crisis, past experiences, personality types, and severity of the event.
When assessing your work environment in the days and weeks after a critical event, consider the following:
* Do employee conversations revolve around a common theme? For instance, in cases involving violence, take notice of employees’ concerns for building security and related personal safety matters.
* Has there been an increase in absenteeism or turnover since the event?
* Has the incident triggered a rise in accidents?
* Have changes occurred in interpersonal relations among employees or departments?
*Is there a noticeable change in product quality related to worker performance?
These activities and changes, if they are occurring, are a few of the indications that management needs to focus on post-incident workforce issues.
A good crisis management program outlines how management should address the needs of staff following a critical incident. Actions should occur in the immediate hours following the crisis and continue anywhere from two weeks to several months, depending on the intensity of the incident. Dealing with a crisis on an employee level requires managers to exhibit a level of leadership that they may not have experience applying. It requires the manager to be strong like John Wayne and compassionate like Harrison Ford, all at the same time. And it means acknowledging that the crisis has touched everyone.
Though many managers don’t feel comfortable with this "touchy-feely" aspect of management, ignoring the stress on employees who have been affected by a serious workplace disruption can lead to decreased productivity, higher accident and injury rates, higher turnover, expression of anger and resentment among employees, and even sabotage.
Following a critical incident, employees will be distracted with concerns of how the crisis will affect their jobs and the company’s future. Employees will look to management for answers and direction. Having a plan of action in place to address employees’ concerns enables a company to return to a normal work environment as swiftly as possible.
The costly employee injuries caused by a crisis may not all be physical. Stress-related disabilities now account for 14 percent of workers compensation claims and are twice as costly as the average physical injury claim. Those who witness the event and those who try to rescue injured employees, for instance, may suffer emotional injuries, which are covered by workers compensation. To a company, stress-related disabilities - particularly those caused by a traumatic event at the workplace - can disrupt work performance and devastate good employees. A well-planned approach to addressing employee stress can minimize trauma and other and related workers compensation costs.
Management, therefore, has a responsibility to the men and women its company employs, to respond quickly to their needs following a crisis.
Unfortunately, no amount of corporate training can prepare managers to handle the impact of a crisis single-handedly. Following a traumatic event, the services of a crisis management consultant will most likely be necessary to develop a Critical Incident Response Plan (CIRP), an action plan which ultimately becomes a company’s life-line as it evaluates the aftermath of a traumatic event. This tailored plan helps management diffuse the stress and unnecessary chaos that affects employees during a business disruption. The plan also covers the coordination of a Critical Incident Team of psychologists, human resource personnel, crisis consultants, lawyers, labor relations representatives and others - all of whom will work together to minimize the disruption and costly impact of the crisis.
CIRPs are beneficial for another reason. Oftentimes, crisis situations present an opportunity for fraudulent claims from employees who see an opportunity to profit from a corporation’s misfortune. CIRPs be used to prevent exaggerated or false claims while ensuring that the needs of seriously injured employees are being met.
In addition to developing this important plan, a skilled crisis consultant will work with members of management to help them maximize their ability to manage personnel who have been impacted by the catastrophic event. What a manager does and says during this stressful time can either hinder or promote a positive outcome. Outside support from a company which specializes in crisis communications, therefore, is essential.
Some crisis management consulting companies bring to their clients another valuable resource - a staff of clinical psychologists who have training in disaster psychology. If the crisis causes a disruption that is too great to be handled effectively by management, crisis intervention and stress debriefings can be offered to personnel.
While dozens of corporate training consultants may be based in your area, it is best to look for a company whose services are restricted to crisis management support. Companies that diversify into too many aspects of training rarely possess the catastrophic management experience that is needed during a time of crisis. Since crisis management consulting is such a specialty, don’t be surprised if your search for a consultant extends into another geographic area. Crisis consultants are prepared to travel to you.
When considering a crisis management consulting company, be sure to question the following:
* The company’s approach to implementing a crisis plan
* The company’s experience in disaster management and response
* The types of organizational training that the company offers
* The types and levels of assistance that the company could provide before, during and after the crisis occurs
* Fee structure and rates.
It is also helpful to find out exactly how the consulting company would respond in event of an emergency. Establish what you expect from the consultant you select early on.
Being prepared for a crisis to occur is the key to minimizing post-event costs and disruptions. Remember, employees are a company’s most valuable asset. Address their needs first through a thorough response plan and your company will stay strong through the aftermath of a critical incident.
Michael Kutner is the President of Corporate Response Management, a crisis management consulting firm in Bensalem, Pa.
This article adapted from Vol. 9#1
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