Risk Management

Professor Chris Kinsville-Heyne

Analysis of Political and Corporate Leadership During CrisisIndonesia, September 2013

• Chris Kinsville-Heyne: Rapid CV• Royal Masonic School for Boys, UK• Graduated:

• Wadham College, Oxford • Royal Military Academy, Sandhurst

• Courses Passed:

• Jungle Warfare & Survival (Belize)

• Arctic Warfare & Survival (Norway)

• Escape & Evasion (Denmark)

• Resistance to Interrogation (US)

• Helicopter Pilot Selection (UK)

• Marksman, (Pistol, Rifle, Support Weapons, UK)

• RE Intelligence Officer (UK)

• Bobsleigh Pilot (Olympic run, Lillehammer, Norway)

• NATO Spokesperson (Bosnia & Herzegovina)

• Military Staff College, UK• NATO Spokesman (Bosnia)• Senior Media Trainer - UN Training Advisory

Team (UK)• Associate Director, Weber Shandwick (UK &

KSA, for STC)• Personal Communications advisor to

President of Saudi Telecom, Abdulrahman Al Yami

• Country Director, Hill & Knowlton (Qatar for Qtel, Doha)• Part of McKinsey Consultant team• Communications Advisor to CEO, • Dr Nasser Marafi, and Qtel Board

• Owner of C3i Strategic Solutions, Dubai • (Media Training, Crisis Communication & Management, • Presentation Skills)

• Client list includes: • (former) Prime Minister of Iraq • H.H. Sheikh Sultan Al Nahyan (UAE)• CEOs and MDs from:

• U.S. State Department, Washington • UK Civil Service, London• Ministry of Presidential Affairs, UAE • Abu Dhabi Tourism • Abu Dhabi Municipality• Duke Corporate Education• Hult International Business School (MBA

Programme) • EU-appointed Strategic Communications Advisor

to NTC, Libya• UNOPS (Syria) Strategic Communications advisor

• Advisor/Lecturer:

define “Risk Management”…..

“The attempt to mitigate the effect and impact of uncertainty upon objectives…”

Task 1

“Buddy” interviews

Look at the person next to you

In the next 5 minutes you will each find out 3 things that define that person

You will then have 30 seconds to report your findings

What was the point of the “buddy” interviews?

In a crisis…

1. You will need to ask the right questions when you are being briefed and get to the heart of the issue as quickly as possible.

2. Using that information, you will need to brief others, accurately and briefly.

*Remember, people who work for you, and the people you work for, can only be as efficient as your briefing allows them to be.

In a crisis, accurate and precise briefings are critical.

One of the most important lessons I have learned in my life…

Develop the ability to make the jump from slow-time thinking to quick-time doing.

2 words to remember…

perceptioncredibility

Ideal risk management:

Minimises spending

Minimises the negative effects of risks

MethodRisk Management consist of the following elements:

Identify, characterize, and assess threats

Assess the vulnerability of critical assets to specific threats

Determine the risk (i.e. the expected consequences of specific types of attacks on specific assets)

Identify ways to reduce those risks

Prioritise risk reduction measures based on a strategy

Risk management should:

• create value • be an integral part of organizational processes • be part of decision making • explicitly address uncertainty and assumptions • be systematic and structured • be based on the best available information • be tailorable • take into account human factors • be transparent and inclusive • be dynamic, iterative and responsive to change • be capable of continual improvement and

enhancement

Potential risk treatmentsOnce risks have been identified and assessed, all techniques to manage the risk fall into one or more of these four major categories:

1. Avoidance (eliminate, withdraw from or not become involved)

2. Reduction (optimise - mitigate) 3. Sharing (transfer - outsource or insure) 4. Retention (accept and budget)

Select appropriate controls or countermeasures to measure each risk.

Risk mitigation needs to be approved by the appropriate level of management.

For instance, a risk concerning computer virus risks would have the authority of IT management for decisions,

While the image of the organisation should have communications top management decision behind it.

Seven rules for the practice of risk communication

1. Accept and involve the public/other consumers as legitimate partners.

2. Plan carefully and evaluate your efforts with a focus on your strengths, weaknesses, opportunities, and threats.

3. Listen to the public's specific concerns.

4. Be honest, frank, and open.

5. Coordinate and collaborate with other credible sources.

6. Meet the needs of the media.

7. Speak clearly and with compassion.

The BP Deepwater Horizon catastrophe casts a shadow on all oil company CEO’s and senior executives, not just BP’s Tony Hayward.

It also provides lessons that every large organisation can learn.

While CEO Tony Hayward and COO Doug Suttles will suffer the brunt of criticism and consequences; all enterprise board members should see this as a wake-up call.

“Risk remains a key issue for every business, but at BP it is fundamental to what we do.

We operate at the frontiers of the energy industry, in an environment where attitude to risk is key.

The countries we work in, the technical and physical challenges we take on and the investments we make – these all demand a sharp focus on how we manage risk.”

Tony Hayward

The greatest failure of most enterprise risk management programs is that they cannot de-center.

That is, they cannot see the risk from different perspectives internally or externally.

Poor or no situation awareness generates a lack of expectancies, resulting in inadequate preparation for the future.

According to a September 2006 poll conducted by Harris Interactive of senior executives in large corporations, the top crisis situations that worry corporate executives were:

61% compromise of corporate information systems

55% terrorism

40% corporate wrongdoing

32% environmental mishaps

30% negative claims about products, health or safety

29% Internet rumors and misinformation

24% industrial accidents

23% product contamination or tampering

21% product recalls

19% workplace violence

Obviously the key stakeholders vary according to the organisation and the circumstances of each crisis.

However, the concerns of each broad group can be identified well ahead of any crisis.

For instance:

Employees want their families to know they are safe, as would emergency and medical workers.

Families of victims want progress reports on their loved ones and want to know what happened in the incident.

Directors and senior management want to know the big picture information about the incident and the impact on the viability of your organisation.

Community leaders want to know sufficient resources are being devoted to the crisis response and victims, and that the organisation is showing leadership and has the incident under control.

They need information they can pass on to people they think should know about the crisis, and they want to express their concern.

Peak industry bodies want to know about the business issues such as the impact on your organisation’s revenue, any legal liability, when the organisation will return to business and what protection was in place for employees.

Finance sector stakeholders want to know the impact on revenue and profitability and any likely future financial implications.

Such stakeholders include creditors, suppliers, insurance companies and bankers.

The media want access to information and to spokespersons so they can report within their deadlines.

Employees should be the main priorityIn times of crisis, clear lines of communication should be established to reach employees at all levels and in all locations.

Questions need to be resolved by the public relations department so you can inform other stakeholders about:

where employees can obtain information – from their usual manager or from special telephone lines, meeting rooms, notice boards or other sources;

whether there is a monitoring system for post-traumatic stress of employees;

if there are services available for families of victims;

whether transport is needed for victims and their families.

Planning should take into account ways to continually update information during a crisis.

For every message to the media, there should be a prior message to employees.

To all AAM employees: Please be aware of the latest developments in the current situation…

Avoid these five types of mistakes

Inadequate accessibility to stakeholders

Lack of understandability in the haste to communicate

Lack of enthusiasm in the contact

Problems with timeliness (too little, too late)

Perceptions of arrogance (e.g. stakeholders are not valued)

In general, people decide if they like you or not in about 3 seconds…..

.. if you are trustworthy or not in about 5 seconds…..

.. and if you are lying or not in about 7 seconds….

…therefore, and according to scientific studies, on average, a spokesman during

a time of crisis, has 8 seconds to make an impact

source: institute for communication studies, UK

• you must bear in mind non-verbal actions – appearance, gestures and voice modulation

• surveys show people remember:- 3 per cent of what you say- 7 per cent of how you say it- 90 per cent of how you look when you say it

source: institute for communication studies, UK

One of the most important lessons I have learned in my life…

Develop the ability to make the jump from slow-time thinking to quick-time doing.

In Summary

Prior Preparation and Planning Prevents a Poor Performance

15 questions to ask yourself…

1. Diligence - How hard do you work?

2. Persistence - For how long will you work to achieve your goal?

3. Understanding - Can you listen to others’ problems?

4. Confrontation - Do you have problems confronting adversaries?

5. Public Speaking - Can you stand in front of crowds and talk to them?

6. Problem Solving - Are you able to find appropriate solutions?

7. Role Model - Do people look up to you and your values?

8. Disposition - Are you easy to get along with?

9. Flexibility - Can you change your schedule according to group majority?

10. Ambition - Do you ever settle for mediocrity?

11. Organization - Can you keep a schedule for you and your followers?

12. Punctuality - Are you on time for your appointments?

13. Loyalty - Do you drop out of programs or change votes?

14. Street Wise - Can you hold your own voice in the real world?

15. Versatility - Are you a jack of all trades or a master of one?

Thank You