crisis preparedness survey

Crisis Preparedness Survey

EVIDENCE-BASED COMMUNICATIONS. INFORM. MONITOR. MEASURE. SUCCEED

BM_Crisis Brochure_10-05.indd 1BM_Crisis Brochure_10-05.indd 1 11/05/12 20:0111/05/12 20:01

Burson-Marsteller commissioned its sistercompany Penn Schoen Berland (PSB), the global market research and consulting fi rm, to carry out the Crisis Preparedness Survey.

PSB conducted a total of 826 online and face-to-face interviews globally amongst business decision-makers in May and June 2011 in the following countries: UK, France, Germany, Italy, Spain, US, Japan, India, China, Korea, Indonesia, Mexico, Brazil, Chile, Argentina and Colombia. Data has been weighted to refl ect GDPs of each region.

For the purpose of this study, business decision-makers are defi ned as respondents who areaged over 25, are full time or self-employedbusiness owners, have an active interestin business and current affairs issues and have fi nal or signifi cant decision-making power intheir business. Overall, half the respondents were from large enterprise businesses and halfwere from SME businesses.

About the survey2


Crisis is a constant variable of the world we live in. Be it in politics, economics or even nature,we are all vulnerable. But that does not mean that we necessarily have to be exposed.

As most business leaders will agree, crisis has to be an integral part of doing business. Preparing and reacting to crisis, go hand in hand withplanning and making decisions, weighing risksand making smart investments. Our survey con-ducted with PSB amongst worldwide decision-makers, showed that, on average, 59% of business leaders have experienced a crisis.

The rise of globalisation and the digital era have brought innumerable new opportunities for business, but have also made companies more vulnerable than ever to crises. The nature and frequency of crises that companies experience are changing. While companies always worry about crises emerging from logistic diffi culties, technical accidents or regulatory scrutiny, today, they must also deal with the emergence of new crises,such as digital security failures or critical social media campaigns.

The most salient characteristic of these “newgeneration” crises is their speed. With digital media, everything and everyone has become interconnected. No crisis is far enough, or small enough to be ignored. Even a minor crisis that happens locally can travel globally and make headlines in no time. Organising movements and staging mass attacks has become very easy for

Introduction

critics and coordinated online attacks are mush-rooming everywhere. To face them, companies must be both fast and sharp, making sure that they react immediately and in the right measure. Above all, the effectiveness of a crisis responseis determined by the company’s ability to shield its reputation. Though it takes years to build, reputation can be lost in an instant, and recovering it is usually a long and diffi cult process, no matter how excellent your productor services really are.

Managing public perception and preparing for the “new generation” of crises is a challenging task. To ensure that companies continue to grow and reap the benefi ts of the digital era without being subjected to its dangers, companies needto modernise their crisis preparedness strategy and acquire tools that can help them deal with online attacks.

The Crisis Preparedness Survey tries to help business leaders deal head on with this reality.It looks at what exactly crisis means for different businesses across the world, and what specifi c tools business leaders can acquire to help their businesses avoid and effectively respond to crisis.

Jeremy GalbraithCEO, Burson-Marsteller Europe, Middle East & Africa

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Reacting and preparing for crisis is simply a fact of life and an integral part of doing business. Fifty-nine percent of business leaders reported that they had experienced a crisis in their current or previous company, and almost 4 in 5 believed their company would experience a crisis within the next year (chart 1).

The most common crisis encountered bybusinesses is controversial companydevelopments, followed by logistic diffi culties, danger to product safety and technical accidents. Digital is increasingly becoming a source of risk and instability for businesses. According to our survey, online or digital security failure and critical or negative new media campaigns represent 32 % of the crises experienced by businesses (chart 2).

Crisis is an ordinary part of doing business

79 % ARE ONLY 12 MONTHS FROM A POTENTIAL CRISIS – OVER 50 % THINK THIS WILL HAPPEN IN THE DIGITAL SPACE

Chart 1

Likely to experience a potential crisis Not likely to experience a potential crisis

Controversial company developments

Online or digital security failure

Logistic difficulties

Intense regulatory scrutiny of your product or company

Critical or negative new media campaigns

Danger to product safety

Technical accidents

Intense political scrutiny of your product or company

Criminal actions

Global

50 %

47 %

47 %

45 %

43 %

42 %

40 %

40 %

33 %

79 %

21 %

How likely do you think it is that your company will experience any of the following potential crises in the next 6-12 months ?

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What sort of crisis did your company encounter?

(Among those who experienced a crisis)

CONTROVERSIAL COMPANY DEVELOPMENTS ARE THE MOST COMMON CRISIS ENCOUNTEREDChart 2

Global

Controversial company developments (e.g. layoffs) 31 %

20 %

19 %

18 %

16 %

16 %

12 %

10 %

9 %

Logistic diffi culties (e.g. problems with transport/delivery)

Danger to product safety (e.g. defective or contaminated parts)

Technical accidents (e.g. natural disaster or explosion)

Online digital security failure

Critical or negative new media campaigns (e.g. criticism over social media)

Intense political scrutiny of your company

Intense regulatory scrutiny of your company

Criminal actions (e.g. bomb attack or fi re)

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Yet despite crisis being an ordinary part of busi-ness, many companies still feel vulnerable and unprepared when it comes to crisis exposure. Our survey showed that only half of companies surveyed had a crisis management plan. But simply having a crisis plan is not enough. Half of business leaders still reported that their existing plans were not satisfactory (chart 3).

Overall, the importance of crisis preparedness as a strategic priority is on the rise. In the past 5 years, 47% of businesses have increased their internal resources for responding to a crisis.

Companies are not planning suffi ciently

54 %46 %

Current crisis plan will be satisfactory in event of crisis

Current crisis plan will cover the company to some extent but there are gaps

Crisis plan will not offer proper coverage and needs to be reviewed

49 %

47 %

3 %

6

Chart 3

NEARLY HALF OF THOSE WITH A CRISIS PLAN FEEL THAT THERE ARE STILL GAPSChart 4

Have a crisis plan Do not have a crisis plan

Does your current company have a crisis management plan?

To what extent, do you think that your company’s crisis plan will be effective in the event of a crisis?

(Among those with a plan)

ONLY HALF OF COMPANIES HAVE A CRISIS PLAN


Among business leaders surveyed, 40 % believe that it is now more diffi cult to plan for a crisis than it was 5 years ago. This is in large part dueto the changing nature of communications.

The new channels of digital communications, such as citizen journalism or social media, have truly enhanced the speed and strength with which crises spread. Companies are called toreact faster than ever before and deal withan expanding array of issues. Digital communica-tions means that even a local crisis can now play out at the global level. With 43% of businessleaders reporting they feel incapable ofresponding to new media, and with digitalplans only being held by a third of companies, it is no surprise that companies are havingdiffi culty releasing online pressure points.

Digital has made crisis managementmore challenging

81 % of respondents believe that new media’s role

in driving reputation during a crisis is on the rise

65 % of respondents feel that new media makes crises

more diffi cult to manage

65 % believe it is hard to know who infl uences

opinion online

66 % of respondents believe new media has signifi cantly

increased the potential cost of a crisis

however... 55 %

believe new media (including social media) has made it easier to recover after a crisis

SOCIAL MEDIA PUTS INCREASING PRESSUREON COMPANIES TODAY

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ONLY A THIRD OF BUSINESSES HAVE DIGITAL PLANSChart 5

GLOBAL 38 %

52 %

37 %

33 %

19 %

APAC

US

EU

LATAM

Have a digital plan

Does your current company have a digital crisis communications plan, in other words a plan for effectively responding to new media crises (including social media)?


Plan

Plan No plan

No plan

Drop in revenue Cut-backs and/orlayoffs

Loss of corporatereputation

Destabilisation of the entire company

None, the crisiswas handled

effectively withlittle or no damage

to the company

30 %

22 %

15 %

27 %

16 %

33 %

22 % 21 % 20 %

One month or less

Up to 6 months

6 months or longer

20 %

29 %

41 %

32 %

31 %

34 %

It’s no secret - companies with a plan recoverfaster. Our survey showed that 32% of crisis-prepared fi rms will recover in less than a month, while 41% of unprepared companies will only recover in 6 months or more (chart 6).

But planning doesn’t just help improve the speed of response in a crisis; it also limits its impact in terms of revenue, cut-backs and loss of reputation (chart 7).

Benefits of planning8

COMPANIES WITH A PLAN RECOVER FASTERChart 6

THOSE WITH A PLAN ARE MORE LIKELY TO HAVE HANDLED THE CRISIS EFFECTIVELYChart 7

About how long would you say that it took your company to recover from the crisis?

(Among those who have experienced a crisis)

You said your company has experienced a crisis. What was the impactof the crisis on your company?

(Among those who experienced a crisis)

BM_Crisis Brochure_10-05.indd 8 11/05/12 20:02

Companies are not condemned to fall prey to digital and other attacks. They can prepare and make sure they know how to react when one of their most valuable and hard-earned assets, their reputation, is at risk. With digital mobilisation on the rise, and public discontent becoming increasingly vocal, companies need to plan and make sure they have the right tools, so that when a crisis erupts, they can resolve it as quickly and effi ciently as possible. Otherwise they risk losing years of hard work... at the click of a mouse.

When it comes to crisis, simply wishing it away doesn’t work. To help companies better understand where they stand in terms of crisis preparedness, Burson-Marsteller has grouped the fi ndings of its survey into three simple categories. Each example illustrates a particular corporate attitude towards crisis preparedness, and shows what companies can do to improve their crisis plans.

Who do you want to be? 9

BOY SCOUTS(WELL PREPARED)

OSTRICHES(EXPOSED)

TIGHTROPE WALKERS(VULNERABLE)

Companies with strong comprehensive plans, which will stand up to the pressure of a crisis.

They account for under 1/3 of companies with a plan. More crisis focused than their peers, they believe having a crisis plan is very important and review their plan at least once every 6 months.

Their plans include various components such as:

Evaluation of possible scenarios Action plan Financial planning Issue monitoring

Companies with plans that will not necessarily cover them, or which aren’t suffi ciently comprehensive.

They account for over 2/3 of companies with a plan. Although engaged with crisis, they are less likely to plan frequently, and admit that their plans are insuffi cient or inadequate to deal with a crisis.

They have less sophisticated plans than the ‘boy scouts’, with three or less components to their plans.

Companies which lack plans entirely. They see only barriers to creating plans and thus avoid making them.

They do not have a crisis plan, despite the fact that 45% report having experienced a crisis in the past.

When faced with a crisis, ‘ostriches’ will handle it by going through their public relations department or senior management, adding to the burden on senior staff.


Our Crisis Management Network operatesat a global level and enables us to mobilise crisis teams locally and virtually anywhere, anytime. We work alongside management when customers, consumers, employees, analysts, shareholders, regulators and governmental bodies are alldemanding immediate answers and action.We have an unrivalled track record of helping corporate management handle major crises.

Our experience extends from product failure to international recalls, from fraud and malfeasance to strikes and litigation, from diffi cult restructuring to site closings in the face of militant opposition, from product tampering to campaigns byactivist groups and boycotts.

Crisis preparedness• Reviewing and understanding risks and threats • Evaluating internal crisis procedures and developing new plans as needed, including issues management, 360° stakeholder analysis and engagement • Crisis training, assessments • Digital and social media scenario development/testing

During the crisis• 24 hour / 365 day crisis strategic advisory and operative support • Strategic research and analysis to solve the problem without delay • On-site support

Post-crisis recovery• Brand, reputation or trust capital recovery programmes • 360 degree stakeholder relations and engagement • Corporate responsibility/CSR programmes • Environmental affairs • Change programmes • Organisational transformation • Research and analysis

Our offering10


About Burson-MarstellerBurson-Marsteller (www.burson-marsteller.eu), established in 1953, is a leading global public relations and communications fi rm. It provides clients with strategic thinking and programme execution across a full range of public relations, public affairs, advertising and web-related services. The fi rm’s seamless worldwide network consists of 73 offi ces and 83 affi liate offi ces, together operating in 108 countries across six continents. Burson-Marsteller is a part of Young & Rubicam brands, a subsidiary of WPP (NASDAQ: WPPGY), one of the world’s leading communications services networks.

About Penn Schoen Berland (PSB)Penn Schoen Berland is a global market research and consulting fi rm. It collaborates with Burson-Marsteller to help global clients win by delivering an integrated strategic communications approach that is customised for each client’s unique situation and needs. Founded in 1975, PSB brings together lessons from the campaign trail and the boardroom to create innovative strategies to handle complex situations. Its powerful hybrid model combines both political and corporate research, recognising that the strategies used to effect change in one area can be innovative and effective in the other. The fi rm calls this Winning Knowledge™.

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Jeremy GalbraithCEO, Burson-Marsteller Europe,Middle-East & AfricaT. + 32 2 743 66 [email protected]

Burson-Marsteller EMEA37 Square de MeeûsB-1000 BrusselsT. + 32 2 743 66 11www.burson-marsteller.eu


crisis preparedness survey

Documents

crisis brochure

crisis responseis

minor crisis

business leaders

business decisionmakers

newgeneration crises

frequency of crises

active interestin business