Reputational Risk and Crisis Management

This is the third and final installment of our business resiliency best practices, outlining preparedness elements to have in place before a crisis. Part one offers guidance on responding to an active crisis. Part two addresses components of a post-crisis recovery.

As you implemented your crisis response and recovery strategies, you no doubt realized that the most effective way to respond to a business interruption incident, be it cyber attack, global pandemic, natural disaster, etc., is through careful preparation.

Whether your crisis plan was not sufficiently detailed, had out-of-date information, or for some other reason was less than ideal, the best time to prepare for a crisis is when there’s smooth sailing. These six items will help you lay the groundwork for business resiliency.

CRISIS PREPAREDNESS CHECKLIST

Response Team | When an incident occurs, your partners, clients and employees will need timely information. Empower individuals to take on specific response roles, including communication and incident monitoring. Designate a project leader to lead the response team and designate an alternate in case the project leader is unavailable to lead the team.  In many organizations, the risk manager will serve as the project leader.  Create an Office Playbook detailing the responsibilities of individuals on the team.

Secure Important Information | Every business has critical documents such as business account information and sensitive data.  Develop a plan with IT to have this critical information secured and backed up offsite.

Review Before You Renew | Work with your broker to conduct regular insurance policy reviews to avoid coverage gaps that can be created as your business grows and changes.  Explore the coverages found in pandemic policies with your broker as well.

Know Your Supply Chain | Your suppliers and service providers must comply with certain regulations and standards to avoid putting you at unnecessary risk. Moreover, you need to have an understanding of who their suppliers and service providers are and how they are verifying safe practices. Ensure you have the contact information of backup suppliers should you need their services.

Staff Training | It’s important to ensure your staff is properly trained in routine cyber hygiene principles, such as how to identify suspicious sites and emails. Coordinate efforts with IT to conduct frequent training with staff and develop a Cyber Hygiene Playbook.

Establish a Line of Credit | The ability to quickly access a line of credit is critical in preparing for an incident.  Ensure you have communicated with your financial institution and established a line of credit to gain access to cash as needed.

A thorough and effective crisis management strategy could be the key to surviving a business interruption event. While this checklist is designed to help to help businesses build resiliency and provide guidance through perilous times, sometimes companies need assistance in establishing their strategy. When in doubt, consult with experienced risk managers who can take your organization step-by-step through the process.

Consult our guidelines for crisis response to help your organization manage an active crisis.

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This is the second of three installments of our business resiliency best practices, addressing components of a post-crisis recovery. Part three will outline preparedness elements to have in place before a crisis. Part one offers guidance on responding to an active crisis.

Now that you have navigated your business through the crisis response checklist and the most acute challenges have begun to abate, it is time to implement a thoughtful “back to business” strategic plan.

Any crisis that threatens business continuity – cyber attack, global pandemic, natural disaster, etc. – will have a profound impact on business operations going forward. A strategic crisis recovery plan will position your organization to smoothly restore normal business operations.

CRISIS RECOVERY CHECKLIST

Lessons Learned | Codify your crisis management lessons learned into the Office Playbook, which establishes a Crisis Response Team team and outlines their responsibilities. This will bolster preparation for the next event.

Close the Loop | Provide a final report for your stakeholders outlining the incident resolution and preparedness goals moving forward. Transparency regarding the challenges and solutions builds trust.

Boost Employee Morale | As you transition to normal business operations, re-engage with your employees. Inexpensive and thoughtful incentives such as small gift cards, hand written notes, and other tokens of appreciation can be effective. Also, not everyone will recover at the same rate, so prepare to extend workplace benefits for a period of time after the event.

Address Insurance and/or Security Shortfalls | If you did not have adequate coverage for the incident (e.g. event cancellation, pandemic, or cyber insurance) take the time to procure coverage now. It is always less costly to be prepared.

Consider New Operating Procedures | Did your customers appreciate the additional communications? Did your staff thrive with more flexibility? Consider things that should become part of a new normal.

Prior to transitioning to normal business operations, your Crisis Response Team should convene to discuss your company’s crisis response, focusing on what can be done better to mitigate the effects of future business interruptions. Their experiences and insights are valuable to your organization’s resiliency.

Consult our guidelines for preparedness to ensure your organization is ready for the next business continuity crisis.

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This is the first of three installments of our business resiliency best practices, covering responses to an active crisis. Part two will address components of a post-crisis recovery. Part three will outline preparedness elements to have in place before a crisis.

The COVID-19 pandemic has exposed the vulnerabilities of organizations to withstand a major business interruption. While a global pandemic is certainly a unique circumstance – never before have so many businesses and individuals globally faced the same existential crisis – the likelihood of another interruption is a matter of when, and not if it will occur.

When a crisis transpires, an organization’s response must address the crisis while preventing negative reputational impacts, protecting current and future business deals, and sustaining employee morale. Guide your business toward resiliency by implementing the items outlined.

CRISIS RESPONSE CHECKLIST

Implement Your Playbook | Review your Office Playbook, which establishes a Crisis Response Team team and outlines their responsibilities. Adjust your action plan as needed for your particular business interruption, then put your team to work.

Overcommunicate | Manage expectations with frequent updates to your employees, partners and clients. Be prepared for this communication to take various forms, including phone calls, text messages, emails, and videoconferencing.

Personnel Check-ins | Check in with your employees and discuss their condition – mentally, physically, and professionally. You may need to change the way you typically implement standard workplace policies to address individual needs. Encourage employees to utilize Employee Assistance Programs (EAPS) or other forms of mental health counseling offered by your health plan.

Confirm Coverage and Compliance | Stay apprised of new and existing state and federal regulations and contact service providers to ensure compliance. Simultaneously, communicate with your broker to assess proper insurance coverage.

Address Cyber Threats | Hackers and malicious actors increase their efforts during a crisis, so remind employees at all levels of operation to consult the Cyber Hygiene Playbook.

Assess Financial Health | Communicate frequently with the finance department to ensure the business has adequate cash flow throughout the crisis response.  Alternative financing arrangements may be needed depending on the length of the crises, such as tapping a line of credit, reducing executive compensation, or cutting certain expenses.

These six best practices are applicable toward any crisis that threatens business continuity – cyber attack, global pandemic, natural disaster, and others. By implementing these components, your organization will manage the ongoing challenges with agility, until they begin to abate.

Consult our guidelines for recovery to help your organization navigate the process of getting back to business as usual.

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