Wednesday, February 29, 2012

Costa Crociere Still Doesn't Get It

Two days ago the engine room of the cruise ship Costa Allegra erupted in flames, leaving the liner and its 636 passengers and 413 crew members adrift.

The Allegra is a sister ship to the Costa Concordia that is still lying on its side on rocks off the coast of Italy, with some of its 32 victims still unaccounted for.

People are still talking about all the things the Italian subsidiary of Carnival Cruise Lines did wrong.

Within hours of the shipboard fire, Costa Cruises posted a brief "Press Release" on its website confirming there had been a fire and it was out, a distress signal was transmitted and everyone was safe.

The only other "fact" included in the buried announcement on the company's website was a statement that "tugboats and other naval and aerial units have been dispatched to Costa Allegra."

The next "announcement" on the website said the first boat should reach the liner in few hours, and then boldly concluded "Costa Allegra is in compliance with all certificates required by both national and international regulations."

Still no word about what caused the fire, how much damage there was, what the conditions were like on board.  The next day, the company announced "helicopters will ensure a continuous supply of food, comfort items and flashlights in order to mitigate guests' discomfort given the difficult conditions on board."

What conditions on board?

That last "release" estimated the ship would reach a safe port in two more days.

On the second day and the seventh "release" on the website, the company announced a 14 member "Costa Cruises' Care Team had arrived at the port awaiting the arrival of the disabled (they didn't call it that) cruise liner.

The eighth "release" proudly declared the latest contact with "Costa Allega, currently under tow to Mahe, Seychelles, (that) Costa Cruises reports that the situation on board is stable and weather conditions are good."

There were few details from Costa Cruise Lines --but that didn't mean word was not spreading around the globe about conditions on the ship.

Each "release" from the company carried the name and phone number of a Miami, FL based public relations company.  I can only assume that the company refused to take their advice, because a PR company qualified to help a company with this much negative news attention, would surely have advised them to be a little more forthcoming and show some concern and empathy for their passengers and their passengers' families.

Friday, February 24, 2012

If You Backup Data But Don't Have A Backup Place To Work

We had a client not too long ago that backed up their data every day and stored it "off site."

Their idea of "off site" was about 80-yards across the management parking lot, in a small house they had purchased.  If there had been an explosion in the plant, or in the research lab, or a tornado had roared across the site, their back-up would have been destroyed or at least inaccessible.

And more recently we heard about a small start-up company that backed up their customer data and stored it off site.  A fire broke out in the building where they had rented office space and the fire destroyed almost everything including their computers and servers.

It took them weeks to find new office space and get computers and a server and some office furniture. In the meantime their clients couldn't wait for them and went elsewhere.  And it wasn't many months before the business collapsed.

There are a number of lessons in these two examples.

A business without an operational crisis plan, a communication plan AND a recovery plan is a business waiting to fail.

A few years ago, you might have survived a business interruption that lasted weeks or longer, but today, competition being what it is, a competitor is quick to pounce on your customers/clients/patients and an interruption of service for more than a day or two is more likely to be fatal.

Ten years ago, Edgewater Technology of suburban Boston was the victim of an employee that went on a shooting spree and killed seven co-workers.  The business was a crime scene for nearly a week and it was almost two weeks before work resumed.  It could have been a business ending event, but management did  all the right things -- communicating with employees quickly and frequently; contacting customers and suppliers and treating the victim families with care, compassion and support.

The company not only survived but has flourished.  But, Edgewater is an exception.

If your facility is heavily damaged or destroyed, I don't care how big or small, if you don't have a plan and back-up place to work, your days may be numbered.

We have a manufacturing client that has worked hard to reduce redundancy in their operations and hold down costs.  But, when we started working with them I ask management what would happen if a storm, fire or other disaster leveled one of their plants?  Each plant makes a different household product and is sold in store chains all over North America.

I was assured that was never going to be a problem.  However, one of the operations managers called a couple of months later and said I had caused him to explore the "what ifs."  He concluded that if a plant were destroyed there was only one company that could build the replacement production line equipment and it was located in Europe.  He talked to them and they said it would take about six months to design a new production line, then the project would wait its turn to be manufactured in their facilities.  It would take nearly a year to make and another six months to ship it to the US and several months to install it.

The good news was that a new building could be up and ready for the production equipment long before it was ready to install!

Monday, February 20, 2012

CEOs Are The Backbone Of Crisis Management -- Or Not!

CEOs in a dozen Australian multinational chemical and petroleum industries were recently interviewed by Tony Jaques, Director of Issues Outcomes, and he found two themes consistent with similar industrial leaders in the U.S.

His study, as it appeared in The CEO Magazine, concluded that the more successful leaders in his country agreed "top executive participation" is the single most important element to good crisis prevention and management.

The same executives, however, voiced concern that many corporate leaders -- particularly those in smaller companies -- were not as aware or as committed to crisis planning and leadership, partly because of inexperience, lack of risk awareness and limited crisis preparedness.

Tony's report concluded that CEOs need to encourage a proactive crisis culture, establish and enforce standards and processes, set an example to build relationships before a crisis, and promote open communication and a learning environment.

The 12 CEOs were relatively confident of their own companies and industries, but identified six common short-comings demonstrated by other senior decision makers:

(1) Denial and failure to prioritise. They said the idea that “it will never happen to me” persists among Australian managers, who often put off taking proper steps without fully contemplating what that means

(2) Lack of experience and full understanding of potential risks. Without having experienced a crisis, it is too easy to underestimate the threat from a wide range of risks, not just the obvious ones where managers feel more comfortable

(3) Inadequate systems processes and management discipline. Systems and discipline were seen as vital, but it was recognised they require work and effort with little obvious return

(4) Insufficient size and resources. While big companies usually have established structures and in-house crisis and risk expertise, smaller companies may think it's too hard and too costly and therefore don’t do enough

(5) Unwillingness or inability of executives to share crisis experience. Because crises are so sensitive and risky, CEOs don’t always share experience with their peers. As a result organizations fail to learn from their own crises and the crises of others

(6) Failures of leadership and upward communication. As one CEO told me: “If leadership from the very top of the organization doesn’t give adequate focus to crisis management, then why would you expect that layers of leadership further down the organization would give it adequate focus?”

To read the whole report:

Monday, February 13, 2012

The Game Has Changed

It hasn't been all that long ago that if someone accused you of wrong-doing it might take hours or days before some mainstream media outlet would find out and report it.  Which meant you might have hours or days to figure out what to do, what to say, and who will say it.

Now, when something goes wrong, or someone or some group believes something is wrong, it can spread across the country or even around the globe in minutes.

When the Susan G. Komen Breast Cancer Foundation made public the decision to stop funding breast screening exams through Planned Parenthood opponents to the decision immediately responded on Facebook, Twitter, scores of Blogs and almost every other form of social media.

That could have been bad enough, but when the mainstream media picks it up and magnifies the social media outcry, it's hard to ignore and sometimes even harder to overcome.

What's at stake is how fast you can respond and how effective that response is!

You can't hesitate and you can't sit around and debate among your management team what to do and what to say.

A crisis communication plan  -- if this happens this is what we'll do and what we'll say -- is now more important than ever. 

Every organization needs to monitor social media AND mainstream media and do it "as it happens" not once a day.

Then be prepared to respond immediately.

A crisis team and crisis team leader must be prepared, trained and responsible for a quick response, and you must be ready to use all available communication tools to respond -- including Twitter, Facebook, Youtube, your blogs, a crisis web site, and every other social medium that comes along.

This will only work well, if you have already established your presence on all of those social media sites and have a reputation for open, honest and timely communication with all your audiences..

Monday, February 6, 2012

Are You Asking "What If?"

Last year's tusnami in Japan, the Euro debt crisis, earthquakes, revolutions in the Middle East and tornadoes in the U.S. have been like a "smack up the side of the head" for business leaders, not only in this country but around the world.

Production in one country depends on vendors and suppliers in another country, and financing may depend on banks in different parts of the world.

All of this contributes to the increase in risk for manufacturers and almost every other kind of business.

If you can't get parts, you can't make widgets and if you can't make widgets, you can't sell them.

The CFO of Starwood Hotels and Resorts, Vasant Prabhu, says, "You have to more than at any time in recent memory think in terms of 'what ifs'."

The Institute for Crisis Management maintains that roughly two-thirds of all business crises are smoldering crises -- problems that start out with some warning or signs of trouble ahead -- and consequently two-thirds of all crises are preventable.

So it behooves executives and managers at every level to anticipate what could go wrong with their supply chain -- at home or abroad -- and what could go wrong with the banks that control their cash, as well as all the things good managers have always worried about and planned for.

Friday, February 3, 2012

The Tale of Two Captains

 A year ago US Airways Captain Sully Sullenberger made an emergency landing in the Hudson River off New York City, after a flock of geese had struck both engines of his aircraft and destroyed them.

He was last to leave the sinking aircraft, and every passenger was rescued alive.

One year later, Captain Franceso Schettino was at the helm of the Costa Concordia cruise ship when he apparently steered it too close to shore and struck rocks that immediately caused the ship to roll on its side and become partially submerged.  More than 4,200 passengers had to fend for themselves, and 32 passengers and crew did not survive. The captain has been accused of abandoning his ship and his responsibility toward his passengers, by fleeing to safety before everyone had been evacuated.

What makes one captain a hero and one a zero?

Probably several things -- from their upbringing, to their values and personalities.  But, another key factor is their training and sense of responsibility.

It appears that "Sully" was highly trained and a trainer himself, and committed to his profession and its standards.  We don't know much about Captain Schettino, but it seems obvious that he was not trained nor committed to the responsibility of being a ship's captain.

What does all that have to do with managing or running a business, a corporation or even a not-for-profit organization?

It has everything to do with being a good and successful leader.

You have to know what can go wrong and what to do when it does go wrong.   But even more, you must practice doing the right things when something goes wrong.  Real time crisis exercises and table-top crisis exercises will prepare a management team to be "Sullys" and a failure to anticipate what all can go wrong in your organization or business, and not preparing and practicing for those things, will only make you more like Captain Schettino.