The Law of the Few: World Class Corporate Crisis and Communications Teams

Many companies navigate the routine complexity of business with adequate or acceptable managem

Team Sport

ent, however it is the truly stellar company/s that excel not only on a routine basis but especially in times of crisis. It is select skills, experience and traits that are able to applied during times of critical decision-making that separate them from the herd.  Specific skills and attributes are not something that can be learnt in the minutes and seconds required in order to apply to a critical decision making process but are acquired and developed over many years and supported by advanced processes and tools.

To understand the best-in-class for corporate crisis management and decision-making we need to consider a number of things. Given that the timeliness of response is often predicated on how little time is wasted on logistical or bureaucratic processes before getting to a point of action, therefore companies with existing policy and procedure that is both rehearsed and updated, put themselves in the top 10 to 20% immediately. This element is certainly not a significant contributor to their success our outcome. Second, the quality of information on which decision-makers and leaders are basing their actions upon. This information alone does not comes from traditional sources such as television and paper it increasingly is inclusive of social media. The voices of many, albeit nonofficial, can have a significant impact on the outcome of the overall damage/survivability of an incident faced by a company.

The best-in-class companies not only acknowledge social media but have means of tapping into influencing and monitoring all social media channels as required, not just in times of crisis but on a routine basis. Lastly and most significantly it’s the character of the individuals that fill the functions within a crisis or communications plan. It’s this area will look in more depth to determine the requirements attributes and success factors as crisis management is seldom the catalyst for success or failure but that of crisis leadership.

In Malcolm Gladwell’s groundbreaking book The Tipping Point he mentions three significant class of character that are an important influence on social trends and epidemics. These three main character traits are also vital if not pivotal in the success of corporate communications and crisis response. Companies that lack or fail to identify and leverage from these key character and personality traits fall far behind the best of class and most innovative companies. These character traits and abilities are not governed by job title position or function they are skills possessed within a person and therefore should be leveraged in accordance with the skills to the desired outcome rather than relying on a predefined job title or function within the company. These three character traits are 1. Connectors. 2.  Mavens and  3.  Persuaders. In very rare instances one or more of these skill sets may be founded in a single person but any one person shouldn’t be relied upon in adding depth to any team, which is always sound practice.

What makes someone a connector? The first–and most obvious–criteria is that connectors know a lot of people. They are kinds of people who know everyone

No great team has all the solutions nor knows all of the information, however is vitally important that the team have access to an individual or group of individuals that can connect to all the known and possible resources in a short-as-possible time period. Connectors as such are fantastic networkers with not only huge personal networks but also plug into other complementary networkers or fellow connectors that maybe industry, technical, media or stakeholder orientated. They can aide immensely in benchmarking or calibrating the sentiment of particular decisions/actions or even the most appropriate channel to make sure that their message is heard clear and concisely with the required outcome.

Every company should have at least one connector in a crisis or communications team or one that can be called upon quickly and effectively. It should be painfully evident this is not the type of skill or network that is built up overnight and therefore can’t be expected to be turned on by the flick of a switch; it may take years if not decades to develop and refine.

Second of the three kinds of people who control the work of mouth epidemics are a Maven. The word Maven comes from Yiddish, and it means one who accumulates knowledge

Mavens are active if not and borderline fanatics in their collection of information relative to a specific discipline or social scenario. Once again it’s essential that corporate decision-makers and crisis management teams include such knowledge collectors. Some companies may have them within their own organic structure or call upon them as part of their service providers or trusted advisors, in some instances even board members. Mavens may manifest in many shapes, forms, gender and age but they are very quickly identifiable by their sheer depth of knowledge and cross-referencing ability to join problems with solutions. A single conversation with an effective Maven may save corporate decision-makers hours if not weeks of procrastination and circular discussions.

Mavens are teachers, Connectors are conduits but neither may be Persuaders and the reality is that some people are actually going to have to be persuaded to do something, this is the role of the persuader. A Persuader is not a snake-oil salesman, although many very effective salesmen and communicators are Persuaders. Persuaders are able to influence through their tone of voice, their physical appearance, their social observations, their empathy towards listeners or just in the way and manner they use all of the skills to communicate their particular message. Many famous politicians, while drawing criticism for their lack of knowledge and other skills, have been exceptional persuaders. Not advocating the requirement for “empty vessels” but persuaders have a rare and unique talent to be able to communicate and influence people to do something, that something being consistent with your objectives. It is a very dangerous process to use any of the identified skills and characteristics in the roles in which they’re not suited, in particular the use of a persuader in a lesser role or not that of an influencer.

Many can now probably identify these key character traits and how successful they have been in routine and critical environments. However, it should be of major concern if you can not identify these traits within your own corporate crisis and communications team. Additionally if you have a total absence of any-and-all of the skill sets within your corporate crisis and communications team. You may survive the day to day routine rigors of business but survivability rate when exposed to critical incidences without these key elements is very poor.  Even worse are those that assume that job titles within the company or even gender have imparted these skills upon each and every one of their senior executives is a gross oversight. The question remains can you identify these assets or can you contact them on your worst day? Your survival may very well depend on it one day.

¹ The tipping point by Malcolm Gladwell chapter 1–The three rules of epidemics, page 38

² The tipping point by Malcolm Gladwell chapter 1–The three rules of epidemics, page 60

Pareto’s Law-20% of your assets will be exposed to 80% of threats. Do you know which ones?

Bad weather or even natural calamities do not affect every city in the world nor every resident of the affected area. Accidents, an inevitable part of some environments, do not affect all your people or totally devalue all your assets. Terrorist do not consider everyone a viable target nor are their actions likely to impact everyone over the course of their lives. The facts remain that only a small percentage of events or incidents resulting in loss of value or productivity will affect your business but conversely a smaller part of your overall assets are likely to succumb to these events; possibly even repeatedly. If this is the reality, why are there so many singular strategies for organizations, one-size-fits-all policy, uniformity in the approach when greater economy could be achieved by focusing on the priority areas? Most of the threats (80%) will only likely place at risk a smaller percentage (20%) of your assets. Do you know which ones?

Too much time and deliberation is spent perfecting the process of identifying and qualifying the threat. While it remains a valid and useful phase the process becomes unexplainably weaker or less popular once value and measurable impact are introduced. This is in part possibly due to the skill and experience of those conducting the analysis/assessment who typical originate from a weak financial background. Even for those with little resources, training or even time, a qualifying exercise to determine what the impact of service failure, disruption or other stressors will provide you with a workable project plan for applying solutions, counter measures or treatment options. This should have financial implications, tangible and intangible. The higher the number, the greater the priority and easier to be presented to business leaders or collaborators. The easier you make the measurement or driver, in a format most commonly used, the greater adherence and buy-in you will get. Abstract terms, ratings, scientific pontification or just made up data will only erode the objective and almost all will loose interest. No single person ever saved an entire organization, it takes systems and team work that follows a plan.

Many conventions are derived from habit or transferred from what others believe to be comparable models. Take fire sprinklers and suppression systems for example. A worthwhile investment and certainly mandated in some jurisdictions to prevent loss of life, undue stress on public services or even making local authorities look bad. Whatever the driver they are common place. However, not every square meter of a building is at risk of having a fire originate in that locale. Much of the planning and installation works on the assumption it could start anywhere, spread anywhere so lets just cover the entire structure. Not necessarily an efficient or effective process but wide spread practice none-the-less. Transferring this methodology to all/any other part of the business would have questionable benefits or make financial sense. These kind of general applications of similar strategies discredit the validity of risk management and force undue cost onto organizations that quite reasonably at times will forego the entire solution because the bulk of the concept is unnecessary, leaving the critical minority (20%) unprotected.

Vision and direction begins with policy. However, this policy is a guiding principle with brevity and clarity not a standalone document. It should include the priority of care or concern such as people, brand, buildings, etc. Priority of response along with the objective of the efforts should be made clear to all. Any and all measures, outlined in subsequent procedural documents and training, should be measurable (financially, operationally and even brand integrity) and constantly reviewed. While policy is unlikely to change for longer periods of time, the process and even certain objectives may as the business changes in both culture and nature. The most effective policies are a single paragraph that encompasses all the aforementioned elements and does not dictate tactics for execution but ensures everyone at least moves forward in the same direction.

Data is a great tool for creating foundation analysis but it should originate from both objective and subjective sources. Single minded collection, measurement and review lead to much bigger falls. No company knows everything about itself or everything else around it, no matter what some may think. Comparative information, data, review and even assessments ensure greater transparency in the final outcome. Care needs to be applied to ensure it is not a popularity contest or management by consensus, a final impartial decision maker is still required. Companies of all sizes can apply this approach cost effectively and expediently while enjoying maximum return on investment not just plain old return on investment (ROI).

The clock is ticking, the world moves on and the business you had an hour ago is not the one you operate now. The process needs to be renewable, adaptive but above all constantly applied by monitoring and surveillance. Monitoring is required of the business, its actions, its impact, resources, threats, disruption impact potential and relevance to the overall business concerns. Many events that arrive on the doorsteps of your business first visited your neighbor or the business down the street. Just because you weren’t watching will not get you a leave pass on the impact your lack of preparation may bring to your organization. Larger companies have internal resources for this purpose, but the smartest have both internal and external for the reasons of effectiveness previously mentioned. Smaller companies, increasingly thanks to technology and a global market, can enjoy all the benefits of outsourced support that the larger companies do without the cost of ownership or inefficiency but with all the benefits.

Only a fraction of your workforce are at risk; a percentage of your travelers too. Not all your fixed assets are of equal value nor will they be exposed to the same single loss expectancy (SLE) or annual loss expectancy (ALE). Only some markets need heightened levels of support and protection as much as only some markets are the most valuable to your overall financial health. Every single email piece of information your company possesses shares the same value. A single piece of code could be worth thousands but a warehouse of files could be nothing more than an administrative cost and operational burden. The problem with this all is that most companies simply don’t know which end is which. The one-size-fits-all approach is cheap, easily understood and been around for years. Secretly the more profitable, efficient and even safer companies have dispensed with the rule-of-thumb and focus their 80% resourcing on the most valuable 20% assets. Do you know your most valuable assets and are they better preserved than the lesser value assets? Or are you just applying the same approach for everyone, thing, process or bit because that is the way it has always been done?

Business class is cheaper than economy: whole-of-journey travel risk management

Just what have you cut?

The majority of travel departments/managers are only empowered, authorized or capable of looking at travel management from a cost perspective exclusively. However, to truly ensure that the process of travel is efficient, profitable and safe; a much wider focus is required-predominantly in the areas of cost, productivity and safety.  When such a wider and more comprehensive perspective is engaged, most organizations will discover that business class flights are in reality much cheaper than economy class for the majority of their executives and traveling talent.

Consider a short-haul flight of under four hours. For an executive this will typically translate to an eight-hour working day. If traveling in economy class they will typically need to be at the airport nearly 2 hours before departure. Even with privileged frequent-flier status they will need to be checked in much earlier than their business class counterparts. Without such privileges, the time required maybe even longer as check-in queues and airline efficiency lengthen and decline respectively. The immigration processing will potentially be lengthened also as many airlines now have preferential immigration processing of business travelers. The traveller in economy will now be left to fend for themselves in the public seating/WiFi/meals environment of economy class travel. Boarding time will be  lengthened and carry-on luggage will be reduced which again will have added to the overall pre-departure time.  Regardless of the physical size of the traveller, their work laptop, the airline or the seating space; very few people get anything close to productive work conducted whilst in economy.  Not to mention, when corners have been cut,  everyone within proximity of a business laptop user can often see the entire content and context of business presentations, e-mails, discussions and intellectual property. The arrival stage will also entail longer immigration processing times, time lost awaiting baggage and jostling within the bulk of the flights travelers. If after all this, on a short-haul flight you expect the traveller to bring their A game or deliver pivotal business results, you should prepare yourself for disappointment now.

Conversely, a journey that has been considered in a whole of risk  manner will play out significantly different. First, the traveller will have the time and flight best suited to the work productivity objectives and reduced commute, check-in and processing times. Utilization of the business lounge will ensure productivity and access to information and systems prior before departure. Overall fatigue and affect on the individual will also be reduced. Whilst not entirely risk free, the threat to personal belongings, company information  or other valuables will also be reduced.  Productivity (best calculated by adding the per hour cost to the company for the executive and the per hour revenue potential of the trip or executive) will also be enhanced by a compact yet usable mobile workspace. Even if the individual is not conducting work on a computer platform, the demands to the individual  are also diminished.  It is also almost ensured that the executive will hit the ground running and clear the aircraft, immigrations and baggage claim much faster, leaving only the commute from the airport to the place of business. This streamlining and efficiency is also replicable for multiple travelers or trips.

When analyzing all of these factors (even in a developed country) the hundreds or even thousands of dollars between economy class and business class travel is often much cheaper than the thousands or tens of thousands of dollars  of business productivity, time and dollars at risk. However, the functional heads responsible for cost, productivity and safety are all typically measured and evaluated on cost containment rather than profitability or maximized earnings of their senior executives. All of these elements are significantly amplified in developed or developing countries. When the entire journey is constructed along whole-of-journey travel risk management lines thousands or even millions of dollars in opportune business can be preserved while appropriate expenditure managed. Reduction or elimination of disruption and wastage can be easily achieved. When it comes to whole-of-journey travel risk management most companies are penny wise and pound foolish. There is nothing more comical and economically tragic than a senior executive or CEO traveling on a budget airline. While sitting in cheap seats being nonproductive and paying five dollars for peanuts or drinks they are losing thousands of dollars or even millions in productivity or earnings for the sake of a few bucks. In the wake of the financial crisis, some very savvy financial institutions openly conveyed that they dare not reduce the privilege, risk or status of their major wealth generation executives for fear of losing them to more competitive or sophisticated banks or financial institutions. Why should this be any different in the face of many other threats to talent and revenue?

The empirical data and evidence of enhanced productivity and efficient travel risk management exists at present in every company. The only limitation is that few are rewarded or supported in harvesting, processing and analysis of such data. If companies and their respective leadership took the time to stop and analyze such processes or even historical culture within the organization, they would find that simple and efficient adaptation of such processes like the use of business class travel versus economy class travel could potentially unlock thousands of hours of productivity and greater business competitiveness. This is certainly the case in developed markets and significantly more acute in developing markets where there is an accumulation of much greater threat, costs, threat disruptions and safety issues.

The question then  is not “Is business class is cheaper than economy?” but more a case of  “Can you accurately prove that it’s not?”

Here today gone tomorrow-International gatherings and sporting events; security threats and concerns

Where to now?

International events such as major product launches, corporate meetings, annual or regular sporting events continue to fall outside the standard methodology and practices of risk and people risk management. Many organizations and individuals, also fail to anticipate or include this in travel risk management strategies for leisure or non-corporate travel.

The bigger the event; often the greater lack of oversight. Many organizations and planners have gotten themselves into what they consider ‘ a well rehearsed process’. However, given the continual growth in this area, one event could be just one of dozens or even hundreds on their annual calendar. Therefore, some planning groups do not even start their planning for these events until mere weeks before the start of the event.  They have become so familiar with the process (in their minds) that they simply template their planning preparation and even the threat profiles.

Issue motivated groups, criminals and even terrorists all have wants and needs. Along with these wants and needs, there a number of capabilities, intent and even historical success that are required before they can even be considered to be truly a threat.  More often than not, criminals and terrorists prefer people over places. Meaning; they will go to where the people are, particular if they gather in large numbers. It often has less to do about location than the accessibility and opportunity for victims or attention. Increasingly, terrorist and issue motivated groups, are about striking at social activities rather than iconic landmark locations. This means that many are at walking into the exact locations or circumstances preferred by both criminals and terrorists alike. In recent times sporting events have even been high on the list of preferred locations. Even athletes have become preferred targets.

Online bookings, cheaper airfares, product launches, the thrill of seeing your star athletes perform live are all increasingly motivating more and more people to travel to these major events and super events. This can in turn result in small or moderate sized cities and locations expanding well beyond their infrastructure capacity or overburdening everything from amenities to emergency services. The planning and preparation vary from city-to-city, location-to-location and even encompass cultural limitations. One should never assume that one particular event held in different locations is even remotely close to the same standard of planning, preparation or resources met with at the last.

Over the course of the next few months, everything from the soccer World Cup to the Shanghai Expo will see hundreds of thousands or millions of travellers descend on individual or clusters of location. These events to, have persistent and specific threats that will affect all travellers and attendees. They will range from the minor and routine, the life-threatening or catastrophic.

Part of the threat are travellers or attendees themselves.  In simple terms you should know before you go. Understanding, adapting and preparing for the local circumstances, rather than just transit or your location of origin, is far more important if not pivotal to determine the success of an overall trip. Many times; Google just does not cut it! One should have accurate and specific advice that helps shape your decision planning an even logistics. Increasingly companies are providing this on behalf of their employees.

Local standards vary. The nature and even the scope of services provided at many of these events are likely to be different to what you may be accustomed at home. You may think it remote, or even unlikely to require such services but you should at least pay attention in order to understand how they will work in the event of an incident, accident or even an emergency.

Plan. Set time aside, to research study and understand the location and even the event in which you are travelling to enjoy. If you have resources to draw upon, use them. If not, seek them out, share and collaborate; but do not omit. It’s not so much the plan that’s important, it’s the planning.

Manage. All journeys (regardless of planning) present choices at various stages of the event. Informed and wise choices are based on the extent and knowledge applied to those particular choices. Ad hoc, ill informed, or simply cavalier choices often result in dangerous outcomes. Ensure you remain updated to changing circumstances. Maintain awareness of your activities and the surroundings in which you’re travelling.  This should be applied to every stage from arrivals, transit to hotels, travel between events and locations; up to and including your return to the airport and subsequent departure.

Actions. Think through plausible scenarios in advance. Consider what resources may be required. Complement those resources with your applied knowledge and access to support services. Should anything occur, that requires even the most routine of responses up to an inclusive life safety and security incidents, your understanding in advance will determine or govern a successful outcome. This should by no means be an individual undertaking, and all travellers or attendees should consider leveraging from other support networks.

Bad things happen to good people all the time. It’s just a fraction of the overall time required to be spent on planning, managing and determining actions, that will determine the success of any incident, big or small.

The Great Human Migration-Chinese New Year 2010

The joy of travel?

This year’s Chinese New Year (CNY) celebrations is predicted to result in 210 million travellers, akin to the entire population of Indonesia or Brazil up and holidaying at the same time. Up 10% on last year. Air travel alone will see an increase of 29 million air travellers over the 40 days, the average monthly visitor rates for either Hong Kong or Singapore. All this makes CNY one of the great annual human migrations.

While current or persistent threats continue to act upon traveller and expatriates alike, this pilgrimage will generate and amplify a number of issues.

Airline safety and security was on the cusp of an easing of accepted trends and boarding protocols thanks to continuous and mounting pressure from consumer groups and sovereign representatives. The December 2009 attempt to detonate a device on a commercial carrier has changed that and allowed for another round of preventative frenzies and reflection. Other less popular issues have also been tabled for review such as the proliferation of falsified passports, raised by the head of Interpol.

Any major convergence of people presents a variety of public health and safety concerns. Coupled with epidemics, pandemics and varied personal hygiene standards; this will raise the level of risk to those exposed. Specific pathogens are ideally suited for transmission during this time or may benefit from accelerated global transmission. The first line of defence will be the traveller themselves.

Novice and seasonal travellers will be at risk by their actions. Carrying large cash reserves (for gift giving and travel spending), extensive wardrobe (cold and hot weather temperate zone shifts), prohibited items needed for sustenance (food and water), health maintenance (medicines and foods) and an inability to keep up to date on events that affect their travel will present opportunity to thieves, delay and frustration.

Commercial conditions will change and in some instances become hostile. Price hikes, touting, fraud, diminished services and decreased service staff will frustrate the process. While it should seem obvious that cab drivers and government staff would also partake in the seasonal break many are unprepared when they discover decreased or suspended support. Many employees will take extended holidays around key dates or public holidays.

Natural events such as weather and earthquakes will continue unabated and have a greater opportunity to disrupt. Concentrations of travellers are not the only ones at risk with those planning on connecting or transiting through areas that are affected.

The holiday and travel activity this Chinese New Year should be memorable for all the right reasons. Acknowledgement and planning for the overall upscale movements of millions of like-minded travellers will smoothen the likely mental stress. The plan is not the focal point to ensure a great family time or break but the planning process. This is even more essential for the business traveller. Consider all the facts, get good advice, keep abreast of changes as they happen, look out for others, keep in contact and be prepared to do specific things if something does go wrong.

Bad things happen to good people all the time but that number reduces dramatically for those with a plan and support.

Full Article

The Great Human Migration Chinese New Year 2010 from Enterprise Security Risk Management

Travel Security and Risk Management Forum

http://www.linkedin.com/groups?about=&gid=2270825&trk=anet_ug_grppro

Product contamination-Did I hear someone say “Tiger Woods”

Crisis leadership or crisis management?

“We estimate that in the days beginning with Tiger Woods’ recent car accident and ending with

his announced “indefinite leave” from golf, shareholders of companies that Mr. Woods endorses

lost $5-12 billion in wealth.”

http://www.econ.ucdavis.edu/faculty/knittel/papers/Tiger_latest.pdf

The perpetual requirement for any company, especially those with a strong commercial brand association or derived income from public opinion, is the identification and management of stakeholders. The priority of communication can be readily identified with a simple x and y chart that apportions values for the level of interest and influence any group or individual may hold with your brand/company. For example, a stakeholder (media, investor, regulator, consumer, etc) with a very high level of interest in your brand, product, processes or return on their interest and is likely to know most things that occur relative to your success of failures. If that same entity has a high level of influence in your operations or the communications specific to your company, they will invariably be one of your highest needs when developing holding statements, pre-emptive advisories or response to publicly circulated content. Communicate with this group, quickly, sincerely and frequently and as a matter of priority. For those with less interest and influence, they will still get your message but at a time more appropriate to their weightage. Do not however underestimate the cumulative or cohort potential of this group should they surge to become a much more credible element should an issue of high emotional (mothers on issues affecting their children, unions), financial (investors or sponsors) or consumption (consumer groups; inclusive of the media) value rapidly circulate among one or all of your associated stakeholder elements.

Information time to market is (in contemporary terms) all but instantaneous, even if you are not! It is therefore imperative that a degree of preparation be conducted for all companies, big or small. It is a folly for any company to operate with this knowledge and not have a process or service to continuously monitor the myriad of available networks that introduce or perpetuate content that could adversely affect your value proposition. This is only part of the preparation required, as any time spent on planning or preparations established before demand presents, will pay dividends well beyond their establishment value. For this you need a number of holding statements, media release, stakeholder communications and the like. This is further supported with a detailed, rehearsed and timely escalation protocol that allows you to identify, analyse, adapt and respond to applicable situations that invariably require customization as you can’t always predict the nature and theme of every issue in advance. You could of course ignore this totally and rely on your response only capacity but as they say “prevention is always better than the cure”, cheaper too!

Where Tiger, and many individuals and companies before him went wrong; despite the sizable investment and earnings capacity associated with his personable brand (especially since it appears to have been substantiated on a pious and family friendly ethos) was apparently to invest only in a response, albeit weak, without preparation and substance. You get what you pay for essentially. I personally could not care less about what he or any other athlete, actor; media personality does outside of their chosen expertise/profession. However, there are plenty that do and it sells.

The net result of the information storm that has ensued has the “Tiger” brand has been impacted. Pre-event equity will protect the brand to a degree but much like natural disasters whereby the government or companies are not “blamed” for the event, they will be evaluated on their subsequent response to the issue. Just ask the Prime Minister of Taiwan who lost his job as result. The impact in this case be measured in dollars and cents, both now and any future earnings.

A number of studies have been conducted on the investment loss attributed to crisis leadership failures and the results are consistent. Your investment pre-incident will pay dividends for daily and extreme disruption events, whereby a failure to plan all but guarantees a plan to fail. If only Tiger and his paid executives bothered to read the instructions first, we may have seen a much different outcome than is currently a slow moving train wreck.

Qui bono (Who benefits?)- Is your corporate resilience more about personalities than real threats?

The sky is falling!

The vast majority of companies, regardless of what they themselves believe, are significantly influenced in their resilience planning by the personalities that represent the process. Whether it is a sole champion or a department that is charged with the enterprise resilience strategy and execution of planning, it is most likely that their personal passions, skills, experience or even comprehension will dominate the overall corporate preparedness and response to actual threats. This phenomena is further compounded by the degree of humility or hubris of these executors and their ability to assimilate, even in the wake of such shortfalls, to rapidly and effectively respond to such oversights. Regrettably, it is often all too late to change at the 11th hour and many of the failing are dismissed/justified by environment, market forces, mother nature or just bad luck. Not the root cause. Sizeable amounts of money is lost, unrealized or expended on unnecessary opportune cost daily or annually as a result.

The scope and demands of modern and dynamic corporates, especially multinational or geographically dispersed entities, is by no means an easy task. A vast amount of knowledge and planning may be required and then resources/strategies applied to areas that warrant countermeasures/treatment solutions that then must be simplified or distilled for consumption and action by numerous stakeholders or line managers. Limited scope, ego, protectionism, arrogance, incompetence, budget constraints and many other issues act in unison to prevent a less than optimum result for all involved. The most resilient companies and the most efficient departments acknowledge all these issues and build such human failings and influences into the methodology to achieve superior results. Paradoxically, these companies are often the most competitive companies also thanks to this vision and forethought.

If this were not challenging enough, the character, charisma, communications skills or business acumen of the lead/executive representative of such functions could signal the final success or failure of all the accumulated work conducted that comes to then convincing the CEO/COO/CFO that a particular threat is credible or a specific investment is necessitated on the strength of the threat and the potential impact if left unchecked. Should they be found wanting, the threat remains unchecked. The squeaky wheel gets the oil!

Financial management has moved past this similar challenge (for the most part) by means of audits, internal checks, disclosure, review or external validation of findings. Risk management, of a non-financial nature, has a long way to go before such approaches become mainstream.

Resilience is based on a comprehensive understanding of all the assets/investments/capital at risk. Qualifying and quantifying the threats and the residual risk present; once current and proposed mitigation/treatment/corrective measures are implemented. A subsequent project plan based on budgets, tolerances, practicalities, strategies and threats is then initiated. None of this is possible or conducted until executive or leadership elements are consulted, convinced and contribute to the outcome, not retrospectively. The sheer diversity and complications of modern and fast paced business operations mandates that this process be a team sport and a collaborative approach.

If you have never met your risk manager, or contributed to the demand or have no budget for such measures, you are part of the problem and less a part of the solution and remain symptomatic of this chronic disease.

Like all addictions or dependency behavior, the first step in breaking the cycle begins with asking yourself some fairly honest and confronting questions. If you can’t affect change then you need help, not time, but actionable collaboration. If not, are you merely a wolf in sheep’s clothing, only to be discovered when most needed?

Chicken or the pig, what came first?-The growing menace from Swine flu and other health crisis

The evolving threat from any health crisis should be a major concern to all those charged with ensuring their company’s resilience. When Swine Flu first surfaced, the public interest was akin to the gold medal tally board during the Olympics, if my country isn’t represented in the top five, who really cares? Sadly, with planners and medical advocates focusing on an inconsistent and flawed measurement tools such as the WHO’s running tally, most will not recognize the threat until it is literally upon them and rife within their communities. Much like the stock exchange, if the S&P 500 is surging, it is no guarantee that you are inclusive of the rally, alternately if it is plunging you could very well be unaffected. Why should the WHO’s numbers be any different?

When it is widely acknowledged that most governments, certainly within developing countries, are not the most dynamic of organizations and the list of failings by numerous administrations remains long and varied; why have so many placed such absolute trust in their ability to manage this particular crisis? Are so few people aware of the already over extended healthcare system in even the most developed of countries? When people are already waiting lengthy periods for non-life threatening surgeries and general practitioners are dwindling in number do they really believe that thousands of people even mildly ill simultaneously will be serviced in a timely manner? Not to mention the issues over any drug or vaccination that is rushed to market exclusive of any standardized clinical trials. I agree that the current trial periods may be too long but look at the countries that are mandating or implementing widespread vaccination programs of the first round of vaccinations. Concerning? Volunteers?

Even the most progressive multinationals have turned a blind eye to the inequalities of everything outside their home country when addressing planning and prevention for a major health crisis like swine flu. Their “home ground” view seems to be the same assumptions and standards for addressing the issue abroad. Since when has India had the same labor laws as the US? Since when has Indonesia enjoyed the same level of broadband connectivity to enable for employees to telecommute? And who in their right mind would assume that employees in China will stay at home and monitor their own health to ensure they do not contaminate the rest of the office/factory? Contractors and consultants in the UK recently declared that they were unlikely to stay away from the office if sick as they are on an hourly/daily rate which would be reduced should they not turn up for work. So much for that assumption! How many people do you think fill in the health declaration forms accurately when entering a country with such screening? Even Hong Kong’s current attempts are nothing more than superficial and mere inconvenience rather than anything of substance or consistency.

Malaysia has acknowledged their citizens are oblivious to Swine Flu and its affects. India is in a growing state of fear over the sudden realization they could be affected too, and they are helpless to do very much at all. Many employees in companies within India simply walk off the job to care for family if they think or confirm an ailment. How much of the world’s back office is situated in India? What do you think the impact will be from thousands who don’t turn up for work or significant diminished service capacities within India? South Korea, Taiwan and China all have major problems. They thought it was a European and Americas problem. Their population is ill informed, suspicious of the government, dependent on them to do something, have very underdeveloped risk management strategies and little to no budgets for such countermeasures, not to mention the care of extended family responsibilities well beyond that of the European and American cultures. Forget what the conflicting medical opinion is, do you really believe this will not be a problem?

Swine Flu (I don’t refer to water as H20 either) is not a human health issue. It is not limited to public health and safety. Like never before, company resilience to this issue will be determined by their actions and implementation, not industry standards or piecemeal government efforts. More concerning is that while these companies will be well prepared, their vendors, suppliers, consumers, affiliates, distributors, advocates and just about everyone else will not enjoy the benefits of their planning and be at the mercy of dynamically shifting environmental influences. You don’t need an economist to confirm the impacts of the economic downturn, equally any similar announcements by the medical fraternity will come well after the obvious, and at present, inevitable impact. On the scale of victim to survivor, where do you fall?

Asleep at the wheel-Outdated assumptions and current threats

Is my assessment still relevant?

Despite countless events and incentives to change, a startling number of companies are still behind the business curve with regards to their risk management. In much the same way a train travels on a set track that has been planned, surveyed, laid and maintained for predictable routes between key locations it doesn’t permit for deviation or adaptability. Given a large enough obstacle it can even be derailed, damaging the train, goods, passengers and requiring major repairs before service is returned. Shareholder value may be affected and the reputation of the company called into question. While the business demands swift and timely movement between locations, the business decision making process is likely to be much slower than the business operation.

Enterprise resilience is a relatively new term and still foreign to most. Outdated risk management structures are functional silos of threat identification, budgets, management and risk mitigation with higher than average potential for duplication, wastage and blind spots not covered by the functional departments or managers. The people overseeing the strategy or implementing the objectives may also be inexperienced or lack authority to encompass all the necessary business aspects.

To further frustrate the process is the human trait that ensures the longer one is exposured to a situation, activity or location results in complacency or diminished ability to identify emerging risks. We have seen this in action most recently with companies operating in Thailand. Despite repeated and almost obvious changes in the situation across the country, but more so in the capital Bangkok, thousands of people and hundreds of companies were taken totally unawares when protesters blocked streets, business environment altered, airports closed and open violence on the streets. The situation was largely predictable and measured preparedness and planning would have negated any major disruption or continuity issues. Thanks to the legacy emotion of Thailand being a “great place” companies almost refuse to accept the new status and many have dismissed the past events as “isolated” and still remain vulnerable to what is the new order until resolution is evident. A similar situation is emerging in Malaysia at present. With a large foreign investment, multinational headquarters, expatriate placements and active international travel, the affects of the changing state in Malaysia will have similar impact on companies and personnel. The signs are there; rule of law, emergency services, crime, religious fragmentation, social unrest, health crisis and financial division are not easily remedied and constitute a here-and-now threat that must be mitigated accordingly.

Enterprise resilience begins at the top. If your board, C-suite or executive leadership is not engaged, the process is doomed from the outset. If the identification and preparation for threats are not inclusive of the enterprise and a representative counsel, the results will be similarly weak. Modern management and competitive advantage lays with those that are hard-wired to the assets and issues in parallel. To know what constitutes value, and the priority to the business along with emerging and dynamic incident surveillance rounded out with a replicatable and efficient decision making process will ensure survival of the fittest. This is an even more poignant issue for those with there manufacturing, management, back office processing or supply lines in developing economies where even the most basic of enterprise resilience strategies are specks on the horizon and not perceived to be an economic imperative. The vehicle is in motion, its speed increasing and the business may be depending on you as the designated driver. The question is, are you asleep at the wheel?

Penny wise, pound foolish-human capital risk management

Do you know the actual value?

In spite of the considerable investment and development around the preservation of assets and the mitigation of risks across conventional corporate assets such as facilities, information, equipment and products, the same methodology and motivation remains far less advanced in regards to human capital.

Before any organization even explores risk management strategies for their human capital it is fundamentally important that they first determine the value at risk. Not only is it a case of valuing the contributions of the individual or groups of personnel but differentiating the value in which they contribute to the company, whether it be through the provision of specific skills and services or the commercial value they present the company. These distinctions also need to be made between job functions or management/executive levels. No two individuals are contributing to the company in the same manner, much less two diverse business functions.  How many companies even know this definitive financial value of their people?

Following the basics of valuation, and any other unique considerations that the company may have (mobile work force, fixed laborers, knowledge capital, research and development) a unit cost can then be applied for prioritizing strategies or expenditure. For example, an individual that reflects a unit cost/investment per hour of $1 will be less likely to addressed as a priority when compared to an individually that presents a unit cost/investment per hour of $100. However, if there are significant numbers of the basic unit cost of $1 at risk, that group as a whole may be a greater priority than that of a single or limited $100 per unit cost individual.

Threats and residual risks associated with human capital are many and varied. Over time a detailed and thorough analysis can be conducted to determine the probability, velocity of onset and other governing factors that will provide a single or annual loss expectancy to the company. A single loss expectancy, such as death, may cost the company significantly more than just the forecast value identified in the first stages. Conversely, an annual loss expectancy, especially in light of the fact many companies are unable to even quantify this loss, may equate to millions of dollars in lost productivity, administrative burden or opportune costs.

To truly understand or appreciate the current or potential losses to a company through their human capital it is imperative to model the disruptions and time loss (inclusive of management and departmental support) to a cellular and group level. If someone falls ill, how long are they unproductive? What does it cost the company? Should the become a victim of crime or their business activity disrupted due to a natural disaster, what is the cost to the company? When applied to our entire human capital asset base, what is our single and annual loss expectancy?

“You can’t improve what you can’t measure” If you are making a truly informed decision on where your assets are distributed, you can then make informed decisions around strategies to preserve their value. You also enjoy the benefits of comparative investment/management. Most companies are surprised to discover that despite their commitment to their people, they actually devalue their contribution by not acknowledging them as an asset and preserving it accordingly. Are you one of those companies?

Companies that have undertaken to approach the management of their human capital consistent with other corporate assets have found the process highly rewarding and very confronting. Conversely, those adverse to such strategies or behind the curve continue to loose more money than the cost of such preparation and mitigation. They too find over time that penny wise turned out to be pound foolish.