from perception to prevention from perception to prevention

CRISIS-PREPAREDNESS IN CITIES

FROM PERCEPTION TO PREVENTION

Finn Frandsen and Winni JohansenASB Centre for Business Communication

SETRIC - Workshop 1: Prevention (Naestved May 26-27 2005)Dias 2

Programme

Introduction Ongoing research projects From “crash management” to crisis management

− Debunking the stereotypes of crisis management

− Trends within the study of crisis management

How prepared are they? (2004)− Some findings from an investigation of the

crisis-preparedness of private companies and public authorities in Denmark

Prevention strategies The new symbolic capital of cities and

municipalities Some challenges


Ongoing research projects

1) General research project: new concepts and models - multidimensional approachBook: Krisekommunikation: Når virksomhedens image og omdømme er truet (in press)

2) Smaller research project (a): media coverage of Danish business crises from 1960 to 2000

3) Smaller research project (b): crisis-preparedness in Denmark 2003Report: How prepared are they? An investigation of the crisis-preparedness of private companies and public authorities in Denmark (2004)


Myths about business crises

1) Business crises have increased significantly in the 1990s

2) Most business crises involve accidents, chemical and oil spills (= most crises are sudden crises)

3) The industrial sectors cause most of the crises4) Employees are responsible for most business

crises


Realities

1) The annual number of business crises has remained relatively constant during the 1990s (between 6,000 and 8,000), but there are significant changes within crisis categories (from operational to human causes)

2) White-collar crime (17%), mismanagement (13%) and labour disputes (12%) are the most frequent types of crises (= most crises are smoldering)

3) The majority of crises have arisen in the service industries (banks, insurance)

4) The majority of crises are caused by managers, not employees (approximately 3 out of 4 crises)

Source: Millar (2004)


Trends within the study of crisis management (1)

From a narrow understanding...

1) Crises perception: crises are events2) Crises management: mainly reactive “crash

management” - security management - risk management (the “command and control” tradition)

3) Crises communication: mainly instructing and adjusting information (Sturges 1994)


Trends within the study of crisis management (2)

... to a broader understanding

1) Crises perception: crises are events and processes (complexity and dynamics)

2) Crises management: also proactive and interactive crisis management (issues management, knowledge management, stakeholder management, reputation management)

3) Crises communication: also internalizing information (Sturges 1994)


Purpose of survey

To investigate the crisis-preparedness of privatecompanies and public authorities in Denmark in the2003:

1) Crisis perception and experience (beliefs, types, definitions, organizational culture)

2) Crisis management (management activities before, during, and after a crisis)

3) Crisis communication (types of both internal and external crisis communication, communication channels, text types, media management)


Survey design

1) Questionnaire• Electronic questionnaire consisting of 32

questions in all• Period: May-August 2003

2) Interviews• Semi-structured in-depth interviews with 18

respondents representing two different populations

• Period: August 2003


Selection of populations

Population (1)− DK 500 established by the Danish business

magazine Børsen Executive: the 500 biggest companies according to turnover

− we contacted 456 companies and received 160 questionnaires (35 percent response rate)

Population (2)− State (royal house, ministries, etc.), 5 amter

or counties (hospitals, police districts, etc.), 118 kommuner or municipalities, public companies (supply, refuse collection and disposal, transportation, etc.)

− We contacted 295 authorities and received 138 questionnaires (46 percent response rate)


Some findings

Crisis perceptions Events and situations that may result in a crisis

according to respondents Perceived consequences of crises Crisis-preparedness (plan, teams, etc.) Crisis preparation efforts Evaluation of crisis management capability Future needs

CRISIS PERCEPTIONS

68,8

77,5

82,5

26,3

45,6

73,9

68,866,7

27,525,4

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

90,0

Krise: der i et kort tidsrumsætter dele af virksomhedeneller myndigheden ud af drift

Krise: der involverer skade påinteressenter (kunder, klienter,

medarbejdere)

Krise: der truer helevirksomhedens eller

myndighedenseksistensgrundlag

Krise: der håndteres dårligt afledelsen i en virksomhed eller

myndighed

Krise: der giver negativ omtalei medierne

Kriser

Procent

Privat (n=160) % Offentlig (n=138) %


Crisis perceptions

No significant variation between municipalities (M)and private companies (C):

Short space of time (1), damage to stakeholders (2) threatens the very existence of the organization (3) handled improperly by the management (4)

Significant variation:

Crises are leading to negative media coverage (5): municipalities (14%) versus companies (45%)

EVENTS OR SITUATIONS THAT MAY RESULT IN A CRISIS

55,0

75,6

57,5

34,4

23,1 23,1

39,4

54,4

46,9

63,8

35,0

56,3

11,3

23,1

11,9

47,5

11,3

33,3

64,5

71,7

48,6

11,69,4

23,9 23,2

33,3

81,2

31,9

49,3

10,9

18,1

5,8

53,6

5,1

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

90,0

Problemer medprodukt/serviceydelse

Ulykker, der involverer

personerBombetrusler

Driftsforstyrrelser

Rygter

Dårligt årsresultat

Strejker

Boykot af

virksomhed/myndighed

og

Negativ omtale i

medierneTerrorisme

Dårlig ledelseIT-nedbrud

Fusion/sammenlægning

Reduktion i

medarbejderstaben

(fyringer)Sexchikane

Miljøforurening

Tab af licitation/stor

kontrakt

Begivenheder

Procent


Events or situations that may result in a crisis

Private companies

Municipa lities

Terrorism 63.8% 90.6%

Accidents involving persons 75.6% 64.1%

Bomb threats 57.5% 73.4%

Computer breakdowns 56.3% 51.6%

Pollution 47.5% 56.3%

Problems with product/services 55.0% 26.6%

Irregularities in supply 34.4% 37.5%

Negative media coverage 46.9% 20.3%

Boycott of company/authority or product/service

54.4% 25.0%

Mismanagement 35.0% 29.7%

Strikes 39.4% 20.3%

Downsizing (reduction of personnel) 23.1% 17.2%

Rumours 23.1% 9.4%

Negative result 23.1% 7.8%

Take overs and mergers 11.3% 10.9%

Sexual harassment 11.9% 6.3%

Loss of tender or important contract 11.3% 3.1%


Perceived consequences of crises

Municipalities:1. Political problems (65.6 %)2. Image/reputation problems versus public (citizens) (48.4%)3. Credibility problems versus clients/customers (37.5%) 4. Economic problems (35.9%)5. Managerial problems (31.3%)6. Image/reputation versus clients/customers/partners (29.7%)

Private companies:1. Image/reputation versus clients/customers/partners (78.1%)2. Economic problems (78.1%) 3. Credibility problems versus clients/customers (76.9%) 4. Loss of clients (67.5%) 5. Credibility problems versus personnel (56.3%)6. Image & reputation versus public (citizens) (55.0%)

Crisis experiences within the last 5 years

Private companies

Municipa- lities

Kidnapping/hostage-taking 1% 0%

Boycott 5% 2%

Terrorism 3% 4%

Sabotage 4% 4%

Sexual harassment 8% 5%

Price-fixing and cartels 13% 2%

White collar crime 14% 11%

Product recall 26% 2%

Leak of confidential infos 16% 16%

Industrial accidents 23% 9%

Take overs (partly or totally) 29% 4%

Huge financial problems 21% 26%

Loss of tender or important contracts 31% 7%

Credibility problems 26% 14%

Strikes 29% 14%

Mismanagement 25% 27%

Rumours 32% 19%

Pollution or spill 19% 48%

Mergers 34% 14%

Negative political conjonctures 28% 29%

Accidents in handling equipment 34% 30%

Product defects 51% 19%

Bad economic conjonctures (crisis in whole industry)

56% 29%

Computer breakdowns 39% 52%

Operational irregularities 52% 47%

Huge downsizing (personnel) 67% 38%

Preparedness: crisis plan, crisis manager, and crisis team


Crises-preparedness

1) Crisis planC (66.9%) - M (93.4%)

2) Formally nominated crisis managerC (59%) - M (74.6%)

3) Permanent crisis teamC (38%) - M (55.7%)

Crisis preparation efforts


Crisis preparation efforts

C M

Risk analysis 57.5% 53.1%

Issues management 46.9% 29.7%

Media monitoring 44.4% 6.3%

Media training 40% 12.5%

Crisis simulations/exercises 26.3% 23.4%

Courses: internal c. management 18.1% 10.9%

Stakeholder analyses 14.9% 9.4%

Courses: external c. management 12.5% 14.1%

Evaluation of crisis management capability

Blue: in relations to environmentRed: internally Beige: evaluation in total of crisis preparedness

FUTURE NEEDS

44,4

30,6

16,712,5

33,3

63,9

29,2

37,5 38,9

26,4

12,5

25,0

8,3

52,2

17,4

5,88,7

24,6

50,7

20,3

40,6

34,8 36,2

11,6

46,4

4,3

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

Risikoanalyse

Issues management

Interessent- eller stakeholder-analyse

Medieovervågning

Medietræning

En (bedre) kriseplanEn (bedre) krisestab

Kurser i intern kriseledelse og

krisekommunikation

Bedre intern koordinering mellemafdelinger og/eller ledelse og ansatte

Kurser i ekstern kriseledelse og

krisekommunikationBedre ekstern koordineringKrisesimulationer eller øvelser

Andet behov

Procent



The pre-crisis stage:what are we up against?

1) The establishment of belief structures regarding risk and the probability of risk

2) Norms for mitigation and crisis response (crisis plans)

3) The decay of those structures4) Processes of incubation and complex interaction,

nonlinear interaction of emerging environmental contingencies, and minor system variance

5) Missed warnings, failure to perceive and/or act upon crisis cues

6) A crisis trigger event, the onset of harm, recognition of crisis

Source: Seeger, Sellnow & Ulmer (2003)


Prevention strategies (1):a three-staged model

Source: Coombs (1999)

Before the crisis 1) Signal detection2) Crisis prevention3) Crisis preparation

During the crisis 1) Crisis framing2) Crisis containment3) Crisis recovery

After the crisis 1) Evaluation2) Organizational learning3) Post-crisis actions


Prevention strategies (2): the sub-stage of crisis prevention

Three categories:1) Issues management: to prevent an issue from

maturing into a crisis2) Risk management (aversion): to eliminate or lower

risk levels3) Stakeholder management (relationship building):

to cultivate positive relations with key stakeholders


The new symbolic capital

The new entrepreneurial way of urban governance: competition (“selling the city”)

City branding - branding of municipalities: the city or the municipality as a brand

The clash of different crisis perceptions and “crisis management cultures” in municipalities

− example from a larger city/municipality in Jutland: security manager versus communications director


Challenges

Crises are “multiple realities”: − they can be defined and typologized in many

ways (the nature and intensity of the crisis)− they are often very complex and dynamic− they often give rise to multiple, if not

divergent perceptions of the situation Crises are culturally and politically defined events

and processes− contain levels of conflict − they arouse strong emotional responses

The mixed nature of many crises: disasters are transformed into organizational crises!


Challenges (2)

Crisis management, too, is complex and dynamic: reactive, proactive, and interactive (the three basic strategies)

Crisis management is− a) strategic planning

· prescriptive approach

− b) diagnosis and improvisation · contingency approach · emergent approach


Challenges (3)

Crisis communication, too, is complex and dynamic: what to say when and how?

− instructing communication (what, how and who?)

− adjusting communication (psychological crisis help)

− internalizing communication (image and reputation)

The many stakeholders of complex organizations


Contact

Finn [email protected]

Winni [email protected]

ASB Centre for Business Communicationwww.asb.dk/centres/cbcom

Aarhus School of Businesswww.asb.dk

from perception to prevention from perception to prevention

Documents

study of crisis management

events crises management

dynamics crises management

crisis plan

crisis categories

crisis team

majority of crises

crises employees