You are on page 1of 6

Crisis Mitigation

At my company (a major food retailer in our area) when there is incident it is first reported to Loss and Prevention or Health or Safety Departments. They first assess the situation and determine what to do next. Generally, in most of the situations, these two departments are capable of handling the minor losses and damages. For example, a customer slipping down in icy parking lot will be a minor event whereas a flood inside a store will be major crisis. If event is beyond the scope of normal day to day events, the event is escalated. The above two departments get in touch with First Alert Team. The First Alert Team gathers and decides if they need to escalate and alert the Crisis Management Team. All the members have crisis hot line phone numbers and keep copy of the Crisis Response Plan. First Alert Team The First Alert Team is responsible for a preliminary assessment of the event and determine who, from the Crisis Management Team, needs to be involved to respond to a major event that has occurred which caused a disruption of normal business operations or has the potential of severely impacting the company's reputation. Crisis Management Team The Crisis Management (CM) Team controls and oversees the continuance and recovery of the company's operations and infrastructure at the time of a major disruption to normal business operations has occurred or any event that would affect the company's reputation and good standing with our customers. The team's responsibility is to coordinate corporate-wide issues such as policies, customer relations, and local, state and federal issues. All affected departments are notified and report their progress to the CM team. Each department has their own business resumption plan. The departments know how to use the plan and the information documented within it. These plans were based on worst case scenarios. Each plan addresses two types of disasters that can affect them, they are: 1. Their department or facility has been affected by some type of event and they cannot conduct business from their respective locations for a length time period. 2. The Information Services computer center, located in Head Quarters has been severely damaged and recovery will take place at the company's remote site. Crisis Management Team Members: Following group of play key role in Crisis Management: 1. Sr. VP Risk Management (Chair of Crisis Management Committee) 2. Co-Chairs: Risk Management VP and Lead Counsel 3. Loss and Prevention Department

4. Chief Information Officer (CIO) 5. VP Corporate Communication 6. VP Legal 7. + One or more applicable Subject Matter Experts depending on the type of event: Food/Construction/Injury/Environment/Operations/Project Fresh (Department producing fresh food at stores), Market District, Pharmacy/Property Managment Group/ Human Resoruces/ GetGo/ Logistics/ Chestnut Ridge Beverage Company/Own Brands

Roles and Responsibilities of CM Team The CM team Leader's responsibility, depending on type of event, a. Coordinates strategy on resolving the incident. b. Decide whether or not to declare a disaster. c. Declare a disaster as required. d. Monitor Progress. e. Approve move into rebuilt primary site. f. Approve the discontinuance use of alternate locations. e. Critique plans. The CM Team Member's responsibility, depending on type of event, a. Enact strategy to respond to event. b. Coordinate restoration of business functions at primary site. c. Coordinate plan requirements between participating departments. d. Monitor and report progress e. Coordinate rebuilding primary site. f. Determine when to move

Handling Crisis
Identify and Define Crisis The first step in handling crisis it to find what is the nature of crisis. Crisis is analyzed and based on the type of crisis, appropriate Crisis Action Plan is invoked. a) Food or non-food Corporate Brand Product b) Pharmacy Incident c) Personal Injury incident or serious accident d) Business Interruption/ Natural Hazard Event (Pandemic Flu, major storm damage, power outages, labor disruptions, etc as per Disaster Recovery Document) e) Environmental Incident or serious damage to third party property. f) Other Media/Image Event. Crisis Plan Activation

"Loss and Prevention" and "Health and Safety" Departments are the ones who are called first when any incident happens. They quickly assess the information and call the "First Alert Team" to assemble. Crisis Management Team is also alerted. The First Alert Team takes following steps: 1. Ascertain and summarize facts, obtain any relevant documentation. 2. Double check facts with Subject Matter Expert (SME) before deciding whether to trigger CM event 3. Write short summary of facts, including SME opinion a. Essential facts: include Who/What/Where/When/How/Why. b. Find what kind of event is it: i. Is it technical? (Point of Sale System down) ii. Is it physical? (Fire, Storm, Flood, etc). iii. Is it verbal? (Food supply is contaminated). c. Write down Issues related to safety if any: Were there any injuries? Were buildings damaged? Were facilities evacuated? Who is on site in charge? Were Police/Fire/emergency services notified or need to be notified? Is there anyone else to be notified ( i.e vendors, suppliers, media). 4. Decides which CM Team members to be involved and Alert that CM core group - review facts known to date and facts not yet available. 5. Activity Log is created and maintained. Date, time and activity comprises activity log. It is used to track when who did what and what happened when. The CM team when it gets call from First Alert Team: 1. Question the facts handed by the First Alert Team; ensure no gaps in knowledge or understanding. 2. Prepare and summarize possible actions/options, including the 'do-nothing' option 3. Analyze possible worst-case scenario, validate with SME and estimate the probability of worst-case scenario. 4. Decisions: i. whether to handle event at Core Group level ii. or invoke CM Process at VP level iii. or invoke Sr. Executives at once for decision. 5. Move key persons to a designated physical site to coordinate crisis response. Handling of Crisis Calls by CM Team: 1. Chairperson calls meeting to order approximate 1 minute after set call time. 2. Chair takes attendance 3. Chair summarizes known facts to date, including SME opinion. 4. Chair tables any/all possible courses of action, with recommendations. 5. Chair polls group for agreement or revision, one at a time (chair will conduct this section by calling the roll, each person to speak one at a time.)

6. Chair recaps the discussion and decision and agreed actions. 7. Call ends. Crisis Situation Analysis During crisis call: 1. Recap of situation from person that called First Alert Team 2. What type of event is it: 1. Is it technical? (Some technology piece down? like FuelPerks rewards redemption system, computer center power failed)_ 2. Is it Physical? (fire, storm, flood, etc) 3. Is it verbal threat? (Example Food supply got contaminated) 3. Where is the disaster 4. Should notification be send to the Crisis Management Leader for that area? Do we need to activate any other Crisis 5. Management Team at this time? 6. Who is affected? How? 7. When did it happen? 8. Do we know what caused it? 9. Can the situation get worse? How? 10. Identify key constituencies: 11. Do we need to involve outside agencies? Police, FBI, FEMA, other? 12. Do we need to make a public statement? 13. Do we need to notify employees? Customers? 14. If it is technical disaster, activate emergency response from suppliers,. 15. Develop and Evaluate alternative course of action: a. Determine if critical information still needed, if any b. Identify alternative courses of action c. Activate Crisis Management teams as appropriate Business Continuity One of the key important pillars in crisis situation is to have Business Continuity Plans (BCP). The plan allows company to withstand a catastrophic event, be it accidental, man-made or natural; and company is able to resume total operations in an efficient and effective manner. With BCP in place, Crisis Management team will be able to provide the swift and decisive leadership that will be the key for successful recovery or response to the event. The employees know what to do in case of Crisis with the help of these plans. The objectives of the Business Continuity Plan are: 1. Keep the company solvent. 2. Respond to emergency swiftly and effectively 3. Resume operations either at main facility or at the designated alternate facility with minimal disruption to the companys customers. Communicating with External Constituencies During crisis information about events might be incomplete. Vendors, customers, and the public may act based upon rumors and inaccurate information which will be detrimental in crisis handling. To mitigate media exposure, company has designated one primary spokesperson. Currently Director of Corporate Communications handles all disseminated external and internal messages. The

spokesperson role is to synthesize the reports and information the Crisis Management Team receives from different sources and craft messages that are simple, verifiable and consistent. These are the rules while communicating with external contacts: a. Only designated company spokesperson may speak about the status of company to the news media, public officials, customers, vendors or anyone else. The spokesperson serves as gatekeeper to empower other senior executives to provide subject matter expert background to outside parties. b. The Management team will provide the official statements of the status of the organization. It is critical not to deviate from this official statement in any remarks made internally or externally. Refer all questions to management team at the crisis command center or to the company spokesperson. c. Employees should not volunteer any information about internal challenges during the crisis. If asked they should only provide official statement or refer to the company spokesperson. Following means are used for communicating to the External Constituencies: a. Press Releases, via PR Newswire, BusinessWire b. Corporate Website if available is used to post: i. Emergency notices and updates. ii. Employee notice and instructions. iii. Press Release of emergency c. Make phone calls to Major Investors d. Verbal notice at corporate phone. e. CEO/COO/CFO calls the Board Members to keep them up to date. Communication to Internal Constituencies: The internal constituencies requiring communications during a crisis are: 1. Executive Management 2. Emergency Team 3. Board of Directors 4. Broader Employee Base The primary purpose of these communications is to: 1. Ensure people know that company is in crisis and recovery mode. 2. Obtain employee Status 3. Non-emergency employees are informed about the status of the recovery and targeted return date. Events requiring Communications: 1. Call to Senior Executive Management and Human Resources to trigger plan. 2. Notify Management and Emergency Team Employees that Crisis Plan is in effect. 3. Daily or Periodic Updates. Following means are used for communicating to the internal Constituencies:

a. Emergency Employee Hotline b. Corporate Intranet Site c. Periodic Conference Calls.

Here's a starter list of seven items that should be included in any crisis communications kit: 1. A list of the members of the crisis management team 2. Contact information for key officers, spokespeople, and crisis management team members. 3. Fact sheets on the company, each division, each physical location, and each product offered. 4. Profiles and biographies for each key manager in your company 5. Copies of your company, division and product logos, your press release format and the scanned in signature of your CEO on disk 6. Pre-written scripts answering key questions that you have generated through your crisis scenario analysis. 7. Contact information for each of your key media contacts both locally, nationally, and if appropriate, key financial press and analysts. 8. Business recovery plan should be readily available and annual test run of the plan should be done.