Wednesday, March 30, 2011

No One Is Exempt From Crises

The Fiesta Bowl Board of Directors has fired long-time President John Junker.

At the Institute for Crisis Management we're always looking for "lessons learned" in cases like this, and it appears the Board's decision to "take decisive action" is the most significant of two lessons here.

The Board initiated an investigation that found Junker had likely violated state and federal campaign finance laws, involving a scheme to reimburse employees for political campaign contributions, then he took part in "an apparent conspiracy" to cover it up.

The ultimate investigation found "excessive compensation, non-business and inappropriate expdenitures and inappropriate gifts." You can read the 276-page investigative finding at

There is another lesson here too.

Although the Board has acted decisively, there are "aftershocks" that may cause even more harm. The Fiesta Bowl grew from a regional event to a major BCS Bowl. Now BCS Commissioner Bill Hancock says the Fiesta Bowl could lose its coveted top bowl rotation.

Hancock has said there could be other sanctions.

Almost all business and organizational crises have, what we call "crisis aftershocks." And just like the aftershocks following an earthquake, some of those cause more harm than the initial event/quake, and other times they just distract management from the original problem.

Monday, March 28, 2011

A School Shooting Affects Many People

A recent student attack on another student at a Middle School in Martinsville, IN, left one 15-year-old boy in critical condition days after the shooting and another 15-year-old boy in jail.

Their lives will never be the same. Their parent's lives will never be the same.

What about all the others?

School administrators and teachers in that building and in the rest of the schools in the system will be changed.

Many of the students and their parents will need help coping with the shooting.

Melissa Payne, a nurse at a Martinsville hospital was on duty when word of the shooting at her son's middle school reached the hospital. She tried calling his mobile phone, but he forgot and left it at home. When she couldn't reach him to be sure he was okay, she left her work and rushed to the school.

It took some time to find him. The school was locked-down for hours and hundreds of frantic parents assembled outside, waiting to claim and hug their sons and daughters.

Mental health experts say the first reaction of students and faculty is shock.

Bill Krise said his eighth grade step-daughter and her friend were within yards of the shooting and saw the victim lying on the ground and bleeding. He's already arranged for grief counseling for his whole family.

Clint Oliver, a clinical psychologist, says the shock of a violent event is felt by an entire community, whether its in a school or a workplace.

Shock, fear, disbelief, then anger and or sadness settle in.

With all of your other crisis planning, we urge you to include grief counselors and other employee assistance programs that can begin immediately and continue for months, and longer in some cases.

If you have more than a handful of employees or you oversee any kind of school, from nursery school to elementary, middle, high school or college or university, please include in your workplace/schoolplace violence or facility disaster plan a specific holding area, or meeting place, for evacuated faculty/students/employees; another for families and off-duty employees that will rush to the scene; and a third area for the media.

Those areas should be identified before you ever have a crisis and they should be separate and, where possible, identify restroom facilities that are ONLY for one of each group.

The holding area for evacuees and the holding area for families, friends and off-duty workers, should be protected from access by the media.

Friday, March 18, 2011

Facing a Crisis? Fix It, Don't Hide!

Bad news tends to makes more bad news, whether you’re in Japan or selling alcohol wipes to thousands of hospitals, clinics and doctors in the United States.

This week, a company apparently formerly known as the Triad-Group, announced its third recall in as many months. This time the company is recalling thousands of “povidine iodine pre pads” which may be contaminated with Elizabethkingia meningoseptica, an organism that may cause rare, but serious infections, including meningitis in newborns, pneumonia in patients on ventilators, and a flesh-eating bacteria that infects some humans.

I say, apparently “formerly” known as Triad-Group, because a search for their website at now has no sign of a company name, contact information or any other link to who or what the company is or does -- just the most recent recall notice.

The recalled product is packaged wipes used to prevent infections from cuts, scrapes and burns prior to surgery. The first recall was alcohol pads used to wipe the skin before an IV or other needle was inserted.

Triad put out a news release about the latest recall, under the name of the parent company, H&P Industries. Reporters were unable to get anyone from the company to respond to questions and the Triad website shows no company name, contact link or other information.

One law firm claims more than 100 people have called wanting to sue Triad because of problems after being treated with the alcohol wipes or another product, a lubricating jelly used by OB GYN doctors.

The most recent recall included iodine wipes sold by Triad/H&P Industries Inc. and packaged under the names Cardinal Health, Medical Specialties, VHA, Triad, Triad Plus, North Safety and Total Resources.

A month ago, the company said it shut down the production line that made the contaminated wipes and jelly, but there were reports they would continue to sell those products under generic and store brand names.

Don’t think you can do what this company appears to be doing and get away with it. You can’t change your name or business identity and continue to sell dangerous products and get away with it very long.

A company called Sierra Pre-Filled, owned by a Chicago doctor, was making and selling contaminated heparin-filled syringes last year, and when the lawsuits and federal investigations started piling up, he skipped the country.

Thursday, March 17, 2011

Ask Your Management Team If They Are Ready?

What a learning opportunity we have in the Japan triple disasters.

Consultants at the Institute for Crisis Management report back regularly that the initial crisis call was quickly compounded by a second or third or more crises.

In Japan the initial earthquake, one of the worst in modern history, quickly triggered the second crisis event – a major tsunami – and then damage to a major nuclear reactor complex.

Buildings were destroyed, people and property were swept away, electric service was disrupted and leaking radiation threatens thousands, if not millions of lives.

Your office, plant or other facility may never catch fire, blow-up, flood or be leveled by some natural disaster. But that doesn’t mean your operation will escape disruptions.

A crisis plan – three, in fact, should include an operational crisis plan, a communication plan and a continuity/recovery plan. They are essential to all well-managed organizations. That includes large and small businesses, manufacturing or service based, not-for-profits, public and higher education systems, health care operations and even religious organizations.

According to the U.S. Nuclear Regulatory Commission, there are 104 nuclear power plants in the United States, and in spite of public attention on the earthquake zones up and down the west coast, the power plant at highest risk is on the Hudson River 24 miles north of New York City.

Who knew?

Do you know how many thousands of businesses, plants, hospitals, schools, not-for-profits, and religious organizations are in a 100-mile radius of that nuclear facility? Are you located there?

You don’t have to have a crisis to have a crisis. But, you do need to evaluate the risks around you, and plan for them, just in case.

It doesn’t have to be a nuclear power plant, either.

We created and executed a table-top exercise not long ago, for a corporate crisis team. It was in the food sector and the exercise was to test their ability to manage a food contamination crisis.

But, their corporate headquarters is near the interchange of a multi-lane expressway and major cross highway. So, an hour into the half-day exercise, we arranged for a call to their “war room” announcing that a fireman was in the lobby ordering all 300 employees to immediately evacuate because a hazardous semi-tractor load had just been dumped 500-yards from the back side of their office tower.

They had a contingency built-in to their crisis plan for an alternate command site, up-wind and far enough away to safely work from. They got an A+ for their planning and their execution.

Are you prepared?

Friday, March 11, 2011

J & J and Triad Recall Costs

Johnson and Johnson and Triad Group are paying a big price for their mistakes.

On the one hand, the U.S. Food and Drug Administration has prohibited J & J from reopening its Fort Washington, PA plant until it meets FDA quality standards. The plant is one of three tied to repeated recalls of defective or contaminated medications, including Children’s Tylenol and Benadryl and Motrin.

Triad, on the other hand, announced it was discontinuing use of a production line at its Hartland, WI plant that was the production site for millions of packages of contaminated alcohol wipes and lubricating jelly.

J & J says it will continue to make the same products at plants in Las Piedras, Puerto Rico and Lancaster, PA. Triad announced it will continue to make wipes and lubricating gel under private labels and store brands.

Eric Haertle, Triad’s COO, and one of three siblings that own the private company, said the massive recall and mounting number of lawsuits against the company have led to “difficult times” for the family owned business, but he insisted they would be “cleared of all charges.”

The odds are against you, if you need a shot or an IV in your doctor’s office or a hospital or emergency clinic. In spite of a nationwide recall, it’s hard to imagine that all of the millions of wipes packages and lubricating jelly have been removed from supply cabinets. And health experts say they are even more concerned about the potential millions of homes that have packages of contaminated alcohol wipes in medicine cabinets with store brand names on them.

J & J has had 20 recalls since September 2009 including children’s medicine, contact lenses and hip replacement hardware.

So what does this mean to you and crisis planning, prevention and crisis management?

Both companies are taking major hits to their bottom lines. In its most recent reporting quarter, J & J recorded a 12-percent drop in profit, and sales of the company’s over-the-counter medicines were down more than 19-percent for 2010.

And, Triad is facing a growing number of multi-million dollar lawsuits, plus they are no longer manufacturing and selling wipes and gel to doctors and hospitals.

Remember, we always say, two-thirds of all business crises are preventable. Both companies could have prevented the crises they are facing.

YOU CAN AVOID MOST CRISES, TOO. All you have to do is the right thing, for the right reason, every day. Cutting corners and ignoring the “little things” will almost always end up biting you where you sit.

Monday, March 7, 2011

Be Cool or Freak Out

Business executives and the leaders of most other kinds of organizations are not exactly breaking down our doors wanting to know what they need to do to prevent crises or how to prepare to better manage the one’s they can’t avoid.

Here’s something to give them pause. Psychologist John Leach says when a random group of people find themselves in an emergency, such as a fire or natural disaster, 10-to-15 percent will consistently “freak out,” 10-to-20 percent will stay cool and composed and the rest will become “dazed and hesitant sheep.”

Another study says less than one-fifth of us will naturally react well in a crisis.

While doing research for his new book Nerve, Taylor Clark has concluded that many of us can overcome our predisposition to freak out or become dazed sheep through training! Who knew?

Psychologist Anders Ericsson says no matter whether you’re facing gun fire or an important presentation at work, practice under realistic conditions is a sure-fire way to get the best result.

What we’re talking about here is crisis planning AND crisis management practice. A table-top exercise a couple of times a year, using your crisis operations and communication plans will increase your odds of more successfully getting through the next real disruption.

Do you want to be one of those 20-percent that freak out, or 15-percent that stay cool?

There’s an old joke about a young person who stopped an old man on the street in New York City and asked him how to get to Carnegie Hall. His response, “Practice, Practice, Practice!

My response when asked how to survive a business or other organizational crisis, “Practice, Practice, Practice!”

Tuesday, March 1, 2011

Your E-Mail, Wikileaks and the Cloud

E-mail made news twice in February and both incidents should send shivers up your spine.

The most recent incident was Feb. 28 when 38,000 Gmail users could not find their e-mails. That was a fraction of total Gmail users, but that didn't matter if it was YOU and your e-mail disappeared.

Google engineers were still trying to figure out what went wrong three days after the bazaar disappearance. Most, if not all Gmail users had their e-mail restored within 24-hours.

The other heart-stopping story began earlier in February, when hackers, who call themselves "Anonymous" broke into the computers of HBGary Federal, a government contractor.

They stole thousands of employee and company e-mails and then posted them on a "searchable" Web site, much like Wikileaks has done with government documents.

The people behind Anonymous are apparent supporters of Wikileaks and the CEO of HBGary Federal, Arron Barr had tried to discredit Wikileaks and then threatened to publicly expose the people behind Anonymous.

So they struck first.

Here's the problem: Losing your e-mail is one thing, but what Anonymous did to HBGary Federal, they or others like them, can do to YOU and/or your organization. Just think about some of the e-mails you've written and saved and what they might look like to the wrong audience? Or, what about e-mails your staff or employees may have written about your organization or you?

Now, let's go back to the Gmail problem.

In the wake of the "lost" Gmails, there has been new interest in backing up more and more digital material on so-called "cloud based" systems. I work with some very intelligent computer specialists, who brag about the "cloud" and all of its possibilities. They, and others like them, believe their information is accessible at any time, from anywhere...and I fear they could be wrong.

Cindy Cohn, legal director of the Electronic Frontier Foundation says, "We think of cloud computing as a bunch of clouds. They're fluffy and white, but it's actually other people's computers and other people's computers can go down."

In fact, my great concern is that those "other people's computers" can be hacked and your important documents and e-mail can be stolen from there, too.

This month has motivated me to move my "saved" e-mails from my computer to an off-line hard drive storage device, along with all my other sensitive client documents.

Think about it!

Did Anyone Notice Toyota Was Right?

Toyota cars did not have an electrical "fault" that could trigger "unintended sudden acceleration" according to a recent report from the National Highway Traffic Safety Administration (NHTSA).

A 10-month long investigation appears to have proved what Toyota had maintained all along -- floor mats and driver error caused the sudden acceleration that made national headlines much of last year.

Now the question is: Is anybody paying attention? Does anyone care?

In 1986 Audi cars were the focus of a CBS 60-Minutes story that blamed faulty Audis for a series of car crashes following "sudden acceleration." Audi quickly spoke up and honestly explained to reporters that drivers were prone to hit the wrong pedal, in a panic, and instead of hitting the brake they were pressing down hard on the accelerator.

Toyota executives apparently assumed that last year, but were wise enough not to blame their customers like Audi did 20-years earlier. Even after federal safety experts cleared Audi, consumers were very slow to come back to the brand.

Toyota did not publicly blame its customers this time, and still got hammered in the media. But, the Japanese automaker seems to be recovering much quicker than did Audi.

So, what's the lesson?

Produce quality products, don't be too quick to point fingers when something goes wrong, commit quickly to investigate what went wrong and promise to fix it, if it needs fixing. And then work with the appropriate agencies and authorities to find answers and a fix.