Presented by:

Date:

“There are costs and risks to a program of action, but

they are far less than the long-range risks and costs

of comfortable inaction.”

– John F. Kennedy

Cliff Trollope, CBCP, CRM, CAS

March 9, 2017

Leadership in Crisis The Competitive Advantage & Preparing for Success

Disclaimer:

I am not an

expert….just

fortunate.

Sharing

experience, not

expertise.

Leadership in a crisis is different ….but not that much

Leadership in a crisis starts long before the crisis

Leader qualities and actions during a crisis

Crisis events and Reputation

Communication and an Emerging Risk

Main Themes

Background and Observations

Crisis and Disruptions to Business Happen

Costs of Not Being Resilient and Prepared

Business Resilience Value Proposition

• Minimize financial losses

• Protect people

• Protect assets

• Protect and improve reputation

• Enhance service

• Ensure high quality and efficient processes

• Maintain obligations and strategic objectives

• Provide assurance to senior management and the board on the continuity of

operations

Why Some Leaders Struggle in a Crisis

• Executives and managers are effective leaders during “normal”

operations because they are knowledgeable and proficient in their

roles, and in a familiar environment

• A crisis is “not normal”. Therefore in order to be an effective leader in a

crisis, people need to be knowledgeable and proficient in dealing with

the “not normal”

• In a crisis the number of ultimate decisions makers may be few,

…but everyone must display leadership and senior leaders must set

the conditions for success

Characteristics of a Crisis – the “Not Normal”

• Confusion, friction, pressure and stress

• Bodies undergo physiological changes

• Lack of clear information about what is happening

• Limited time in which to make decisions

• Attention from your community, stakeholders, and the media may be

intense

• News may travel fast, shaping the public perception of the crisis and how

it is being handled

• Not “business as usual”

So what can we do?

The Leadership Foundation and Some

Guiding Principles

Principles of Leadership

• Know yourself and seek self-improvement

• Be technically proficient

• Seek responsibility and take responsibility for your actions

• Make sound and timely decisions

• Set the example

• Know your people and look out for their well-being

• Keep your workers informed

• Develop a sense of responsibility in your workers

• Ensure that tasks are understood, supervised, and accomplished

• Train and prepare as a team

• Use the full capabilities of your organization

Guiding Principle:

Leadership in a Crisis Starts Long Before the Crisis Event

Emergency

Procedures

Business

as Usual

Normal Operations Normal Operations

Event

Proactive

Preparedness • Program Governance

• Risk Assessment

• Business Impact

Analysis

• Plan Development

• Testing/Maintenance

4

Governance and

Structure

Risk Assessment and Analysis

Plans and Procedures

Sustainment and

Continuous Improvement

Elements

• Policy

• Program Structure and Management

• Program Integration

Elements

• Risk Assessment

• HIRA

• Business Impact Analysis

Elements

• Emergency Procedures

• Emergency Response Plan

• Crisis Management Plan

• Crisis/Emergency Communication Plan

• Business Continuity Plan

Elements

• Training and Awareness

• Exercises

• Maintenance

• Program Audit and Review

Position Your Organization for Success:

Develop a Full Program

Growth

Collapse

Recovery

Crisis

Responsiveness

Able to

respond?

Able to

recover?

Event Management Recovery

Team performance

following a crisis event

Under

performance

Crisis

Adaptability

Crisis Resilient Team Culture

Guiding Principle:

Effective decision making is key… but never easy

Observe:

Identification of incident

Orient/Assess:

What happened?

What does it mean?

What is impacted?

Who is impacted?

Who needs to know?

When does impact start?

Decide:

What needs to be done?

Who needs to do it?

When does it need to be done by?

Who needs to know?

Act:

Execute decisions and Assess Results

Decision Making in a Crisis: Effective crisis management depends on an efficient and effective Decision

and Action Cycle

Decision Making in a Crisis

• Crisis generally requires a more intuitive decision making process

• Pattern recognition is more important for intuitive decision making

• Enhancing pattern recognition can be done through

oDirect experience

o Learning from the experiences of others

oSimulations and exercises

Guiding Principle:

Leaders at all levels must act like leaders

Leader Qualities and Actions During a Crisis

Effective Crisis Leaders:

• Always put people first

• Think strategically and act tactically

• Understand the impact of moral courage and resilience

• Are visible and confident

• Know their role and “stay in their lane”

• Welcome the help of others and have built a good support team prior to the

crisis

• Trust those around them

Case Studies - Leader Actions in a Crisis

• Leaders must be

visible and confident,

but that is not enough

• Importance of

managing

expectations

• Never underestimate

the impact of moral

courage

21

Maple Leaf Foods Stock Price

Case Study: Maple Leaf Foods Listeriosis

Crisis

Key Lessons:

– Leadership “setting the tone”

– Planning and preparedness

– Importance of annual crisis simulations and exercises

– Effective internal and external communications

– Use of third party experts

Issues with XL Foods beef recall and the BP

Oil Spill

Guiding Principle:

“Win the First 24 Hours”

Leadership Lessons from the 2013

Southern Alberta Floods

Response gets all of the attention, but

preparation and mitigation

makes all of the difference.

Leadership in a crisis begins long before

the crisis.

Preparation and Mitigation – A Game Changer

• There needs to be an open and

frank dialogue about risks,

mitigation, preparation and

costs with executives, CEOs

and boards

• “Make it right – the first time…”

Communications – Expect Challenges

• The importance of managing

expectations

• Effective Crisis Communications

depends heavily on effective

Information Management

• Think hard about your messages and

media and test them beforehand if you

have time

People, Attitude and

Approach

Frameworks, Structures

and Plans

Crisis Management

Capacity

Outcomes

Continuous Improvement

Co

mm

un

ica

tio

n Im

pro

ve

s

Crisis Events and Reputation

“Be Reputation Proactive”

Some Key Facts

• Reputation in crisis (and any time) is a strategic matter for senior leaders – not public

relations, not media relations, not anyone else

• Technology and social media have changed crisis management

o Speed of information passage

o Easier for anyone (or group) to be an activist, push their view or opinion, and have

access to the public and your stakeholders

Be “Reputation Proactive” Before, During and

After the Crisis

Before:

• Anticipate and assess in advance – know what issues could

escalate to a crisis with some stakeholders

• Where possible, prepare to deal with the potential issues and

stakeholders in advance

• Know what your company stands for, your value to the

community and stakeholders, your strengths etc. and use it to

your advantage in a crisis

Be “Reputation Proactive” Before, During and

After the Crisis

During:

• Be proactive and advocate for your company – not just “smooth

over”

• If a mistake was made, admit it but do not stop there - talk up

what you do well and what you are doing to address the issue

• Address the issue of “systemic”

• Do not let individuals or special interest groups dictate or

highjack your reputation and be ready for the “unreasonable”

Be “Reputation Proactive” Before, During and

After the Crisis

After:

• Think of reputational crisis management as a

campaign – sustained effort may be required

• Plan for and be prepared to revisit

• Learn from the crisis

An Emerging Risk… that is already upon us

Cyber Security Incidents

38

Changing Landscape – Digital Privacy Act

• Canada's new Digital Privacy Act has introduced a mandatory breach

notification

• any organization that experiences the loss or theft of personal

information putting people at "real risk of significant harm" will be

required to notify

– Office of the Privacy Commissioner

– individuals affected

• Failing to do so could result in fines of up to $100,000 per offence

Changing Landscape

• Canadian Securities Administrator (CSA) recently published a notice urging

immediate action to strengthen cyber security awareness, preparedness and

resilience in Canadian capital markets with a focus on:

– cyber security risk assessment and information security governance programs

– IT safeguards and controls

– use of encryption

– risks related to third-party service providers

– vulnerability tests and compliance monitoring

– evidence of regular employee training and awareness

– incident response plans

Cyber Security Incidents – What should we

do

• All of the previously discussed themes and guiding principles apply

• Focus on the items CSA has flagged as their focus areas

• Build a specific cyber breach plan or checklist

• Build the team to support

– Cyber security professionals to help with mitigation and building response

plans (also leverage support from police)

– Legal

– Insurance

Concluding Comments

• Leadership in a crisis situation is hard, but you can prepare and become

better at it

• Effective crisis leadership begins prior to the crisis - position yourself and your

business for success

• In a crisis don’t expect to rise to the challenge, but rather descend to the level

of your preparation and experience

Cliff Trollope, CBCP, CRM, CAS

Direct Line: 416.515.3851

Email: cliff.trollope@mnp.ca

“When the tide goes out, we find out who’s

been swimming without a bathing suit”

– Warren Buffett, July ‘07

Questions and Discussion