Stages of Crisis & Crisis Management. Objectives Describe stages of crisis process Identify key principles of crisis intervention Discussion of classic Tylenol poisonings case Apply stage management approach to team case. Malaysian Flight Crash System Map of Financial Crisis
Segmenting complex processes
Like most human events, crises can be described in terms of stages, or relatively identifiable sequences of events and reactions. Stages enable planners to monitor risks, progress, target stakeholders, and take strategic action appropriate to the stage.
Fink’s Crisis Lifecycle
Risk cues that potential crisis can emerge
Triggering event with resulting damage
Crisis no longer a concern to stakeholders
Lingering effects of crisis
Mitroff’s Five Stages of Crisis Management
Warning signs & efforts to prevent
Probing & prevention
Search risk factors & reduce potential for damage
Keep from spreading to uncontaminated areas
Return to normal operations asap
Review & critique CM efforts for improvements
Jack Welch’s CEO of GE
Avoiding or minimizing
Keep quiet or buck-passing
Shame Mon-geringSelf defense, blame & credit
Blood on the Floor Somebody pays
Crisis Fixed Life goes on, prevent future crises
An “ecomap” or ecological map of stakeholders can help to identify all involved parties in the crisis. Concentric circles are used to set parameters on primary or direct stakeholder involved, secondary or “spillover” effected, and tertiary or very indirect affected. These help prioritize response to them and ensure that no one is left out of consdieration.
Secondary (Vicarious) Effect
Regardless of the crisis model used, crisis management involves four strategic considerations, or the “Four C’s.” All plans should include at least these aspects.
J&J’s 1982 Tylenol Tampering
In this presentation you will cover:
When the Johnson & Johnson Company faced the Tylenol poisonings in 1982 they applied the Four C’s quite effectively. They relied on the value and strength of their culture credo which also identified the stakeholders
The Crisis Begins…
Tylenol, killer or cure?
-- Washington Post
The Tylenol Scare
Most public recovery strategies incorporate the following five components:
In 1982 FDA estimated 270 product tampering cases. Following the Tylenol crisis, several other tamperings plagued other companies. Impact could have been reduced by learning from J&J’s experience.
The Tylenol comeback (and how they did it)
What did Toyota do: Halt production. Halt sales. Find the problem. Fix it. Recall vehicles. Fix them.
“The gas pedal issue in question affects eight of Toyota's top selling models: RAV4, Corolla, Matrix, Avalon, Camry, Highlander, Tundra, and Sequoia. It doesn't affect the Prius, other hybrid models, Yaris, or Sienna. It also does not affect Lexus or Scion models. They sell roughly 2 million vehicles per year in the United States. A halt of production of only one month could mean the loss of roughly 100,000 sales—or, assuming an average profit of $3,000 per vehicle, roughly $300 million. Each month. “
In your team, identify a crisis in an organization you are sufficiently familiar with (perhaps one you experienced)
For each of the stages, use your team to describe the events of each stage (use chalkboard)
For each stage identify what people needed (identify a specific group of stakeholders to keep the format manageable)
For each stage, discuss what was done and how (in)effective it was.
If you were a consulting team for this organization, what recommendations would you make for each stage for a better outcome?