Business Insurance

Proactive Crisis Management

Group of employees talking in a meeting

The definition of “crisis” is “a situation that has reached a critical phase.” (Meriam Webster Dictionary)

Whether there is a fire, explosion, vehicle-involved accident, or machine entanglement, a rapid response is necessary during the critical phase — especially if there are injured employees. Natural disasters, such as earthquakes, severe weather, power outages, and other similar occurrences, can affect employees as well if they are caught at work during such an incident. Knowing what to do during that critical phase, or “crisis,” is very important and is what we will discuss in this article.

The crisis that impacts your business may be impacting other companies at the same time, but there will be situations where a generic response simply will not work because of your specific company characteristics. A proactive crisis management plan requires a commitment to assessment, planning, and putting into action a crisis management plan before a crisis begins. Each business has unique hazards, different local emergency services, and different cultures – all of which affect how you plan.

All companies face management challenges each day, but everything changes significantly when a crisis arises. The management of a crisis can be emotional and stressful, but the decisions made will determine the ultimate condition of the company on the other side of the crisis. These decisions impact the company, its reputation, and/or potentially an OSHA inspection result.

Managing Crisis Effectively

There are many suggested approaches to analyzing potential accidents or incidents. One of the most effective ways to manage crisis effectively includes the following three steps:

  1. Conduct an Organizational Evaluation to evaluate your current level of crisis preparedness.
  2. Establish a Crisis Management Team to assist in the resolution of the crisis.
  3. Draft a Crisis Management Plan to give guidance to employees on what to do and how to do it.

Conduct an Organizational Evaluation

Why conduct an Organizational Evaluation? Many organizations will do this on an ongoing basis in the form of audits, investigations, or even job hazard analyses (JHA). It may feel a little redundant, but conducting an evaluation or audit is essential. The form this takes (i.e., checklist, narrative, etc.) is not as important as the outcome.

To conduct an Organizational Evaluation, you will first identify and analyze your company’s hazards. Some areas to evaluate include job tasks, operations, machinery, and environmental factors. Involve as many individuals as possible in the process, including those who engage in the day-to-day activities of the business, your human resources team, and those involved in loss control / safety. They know better than anyone how things can go sideways and are wonderful resources to evaluate hazards.

While evaluating these hazards, it is vital that every possible action, reaction, and response, be considered. These may be dismissed later, but the whole purpose of emergency preparedness planning is to anticipate future emergency situations, the impacts of those situations, and then to develop effective and efficient countermeasures.

Establish a Crisis Management Team

Regardless of the analysis and planning, success depends on a competent and well-trained team of company professionals. Although the team should include members from upper management, this group of individuals should have knowledge of every aspect of the company and be able to provide input regarding the area impacted.

Regardless of the size or makeup of the Crisis Management Team (CMT), one of the most important individuals in the group is the “point of contact” or “company representative.” This individual will be interacting with the public, media, employee family members, and governmental agency representatives such as OSHA inspectors. This person will be the face of the company and must be well informed and well-spoken with the trust of upper management. This individual should also be well trained in the company’s overall Crisis Management Plan, which we discuss next.

Draft a Crisis Management Plan

Once you have conducted your evaluation and have your team in place, the next step is to develop a crisis management plan. Some of the general aspects that need to be included in this plan’s procedures for various situations include:

  • Evacuation plans for the facility (and neighbors, if warranted).
  • Notification procedures for various entities, including governmental agencies, fire, police, insurance carriers, etc.
  • Triage procedures for injured personnel.
  • Emergency shut-down procedures for equipment that require specialized attention.

Other plans may include more specialized items due to the nature of the business, such as:

  • Hazardous materials issues, such as spill containment, and communication with emergency responders regarding reactivity of stored chemicals.
  • Fire/explosion issues with equipment and/or materials.
  • Flooding from inside or outside the facility.
  • Electrical failures.
  • Structural failures.

Your site hazards that were uncovered during the Operational Evaluation will drive the types of plans developed. For example, if a structural failure occurred in a processing plant, answers to the following questions would need to be answered, and the plan should have the procedures and people in place to be able to answer them:

  • Which employees and equipment might be injured/damaged?
  • How will those employees be rescued if the failure blocks access?
  • If certain equipment has been damaged, would it create other hazards?
  • What information do the emergency responders need immediately?
  • Is the media involved and how are they approaching the situation?

Develop a Communication Plan

A communication plan is an essential part of the overall crisis management plan. Under stressful situations, the company message to the public, or the appropriate governmental agency, could be damaging if it is not consistent, controlled, and correct. Communication with media, employees, government officials, family of injured employees, and others will be necessary. Each individual or group may require different information, which must be provided in an appropriate manner.

The communication plan should identify possible audiences, name the point of contact (or company representative), and outline necessary details. For example, family members will be the most distraught, and any message must be delivered with compassion and understanding. Government officials will want direct answers, but the point of contact needs to remember to not provide more information than is required.

Before statements are made, they should be assessed and controlled by the point of contact or whomever has been identified in the crisis plan as holding this responsibility. Anything said to anyone by a company employee may become information that could be used against the company later during legal proceedings. It is critical no one lies or makes emotional or accusatory statements that could cause harm.

The message must be consistent, controlled, and correct. If the point of contact (or anyone for that matter) does not know the answer, then “I don’t know” or “We are still investigating” are perfectly acceptable answers.

Here are a few other rules of thumb to follow when communicating during a crisis:

  • Make key message points as brief and concise as possible.
  • Ask if the message points are understood. If not, repeat.
  • Anticipate questions and be able to support your statements with facts.
  • Keep verbiage layman and common.
  • Do not lie, invent, or guess. “Just the facts, Ma’am.”

Never make assumptions or guess about what happened when talking with anyone. If employees are approached by the media with questions, a good response would be:

We are cooperating with authorities on the investigation. Any of your questions can be answered by our point of contact or company representative.”

Conduct Crisis Drills and Exercises

With all the elements of a crisis management plan in place, the company should schedule simulated drills of various crisis situations. This can help test your communication strategy and the responsiveness of your team, ensuring your plan is successful.

All employees should be trained on how to interact with government officials during investigations. As with a regular inspection, employees have certain rights during an investigation and it is important they are aware of these rights. Here are a few things you and your employees should know:

  • Employees have the right to decide whether to speak with an inspector.
  • Employees have the right to ask that a company representative be with them while being questioned.
  • Company officials should never coerce or imply that an employee should not speak with the inspector; simply convey their choices.
  • Employees should understand that during the interview their statements can be used against the employer for citation purposes.
  • If an employee grants an interview with an inspector or engages in a casual conversation, the interview / conversation can be ended by the employee at any time.

Training and simulations should be conducted frequently enough to ensure employees remember their options and the crisis team’s skills are current.

The Ultimate Priority: Protecting Lives

Ultimately, the priority during a crisis is to protect lives. Acting quickly and decisively may be considered the first rule of crisis containment. As part of the crisis team, upper management must take an active role immediately to ensure leadership presence.

As we indicated at the beginning of this article, the definition of “crisis” is “a situation that has reached a critical phase.” I think we all can look back on a situation that reached a critical phase in our past and see things we could have done better, quicker, and more intelligently. Having a plan in place beforehand will help document that knowledge that was developed dispassionately, so when emotions are high and stress is off the charts, you will be able to refer to that plan to guide you through the phase to solutions and a path back to normalcy.

Helpful Resources

There are a couple of good reference documents that can help organizations develop their crisis management plan:

Alex Miller is the safety services director for Leavitt Pacific Insurance Brokers. He is certified as an Associate of Risk Management and holds a Certificate in Safety Management. Alex works with Leavitt Group clients to improve their safety efforts through coaching and counseling upper management and safety directors.