Tuesday, April 12, 2011

Few Companies Are Crisis Ready: But We Knew That!

A new report out this week confirms that one of the biggest mistakes companies make in a crisis is a failure to communicate and be transparent with employees and other key stakeholders.

The report concludes the failure to communicate in a crisis contributes to a loss of value to the company.

The survey was conducted by the Canadian Investor Relations Institute (CIRI) and Fleishman-Hillard, Inc. in September, October and November of 2010 and included responses from 34 financial analysts and 78 investor relations officers in the United States and Canada.

One of the disappointing conclusion of the survey is that many companies are aware of the potential damage they face to their sales, reputation and share value, but many still do not have a crisis plan, and if they do, they admitted it was very likely outdated.

The report confirmed that half of the respondents from financial services and the health care industry don't use a crisis plan, even if they have one.

Recalling the financial crises that slammed the world since 2008,Tom Enright, CIRI President and CEO concluded, "...companies need to be armed with a plan." Amen! That's what we've been arguing for more than 20-years.

If you don't believe us, then heed Enright's words, "No sector or company is immune to a crisis. Having a crisis communication plan in place is simply prudent."

Thank you, Mr. Enright.

Another short-coming underscored in the report -- Of the few companies that have a crisis communication plan, only 29-percent update it annually.

Another disturbing finding -- More than 50-percent of respondents say they only have a crisis plan for an operational issue such as a fire, storm or perhaps workplace violence. Never mind that two-thirds of all business crises have nothing to do with "sudden events" and almost everything to do with human mistakes.

Another frightening finding -- Less than half of the companies surveyed monitor social media during a crisis.

No comments:

Post a Comment