Escalation Planning Response - FTI Consulting

Business Model &
Workforce Transformation

Efficiency and effectiveness:
Driving change across the business cycle

Operational &
Financial Resilience

Creative destruction:
Building resilience from the balance sheet up

Digital Trust
& Ecosystems

A new world of threats:
Managing cybersecurity risk in changing times

Escalation Planning
& Response

The Anatomy of a Crisis:
The right approach to crisis preparedness is a holistic one

Remediation &
Dispute Resolution

Investigations and disputes in a post-COVID world:
When will the storm hit?

Government &
Stakeholder Relations

Strength in leadership:
The new rules of stakeholder engagement

Economic Impact
& Sustainability

Resilience and Sustainability:
Two sides of the same coin?

Real-Time Data
Analytics

Data is the lifeblood of resilient businesses

The pandemic may have ushered in a new world, but the basic crisis management principles are as relevant as ever.

COVID-19 escalated into a crisis of unprecedented scale and complexity, for which few organisations were prepared. According to FTI’s Resilience Barometer™ 2020, only 26% of organisations had invested in crisis management in the previous 12 months. Investors are only too aware of this oversight: just 48% believe companies can manage crises effectively.

0 %

of executives spent 5 hours or more a day thinking about dealing with crises

Companies which have experienced a crisis are subject to

0 x

the media attention following that crisis

Cyber attacks

and

major product defects

were the two most common crises
experienced by respondents in 2019

Lack of preparedness costs dear. FTI’s Anatomy of a Crisis indicates that the average share price impact from a crisis is 3.5 times greater than a purely financial calculation would suggest. Reputational damage, therefore, can undermine value just as much as financial damage. With 62% of workers wanting greater media scrutiny of company actions in the event of a second COVID-19 spike, businesses must work even harder than before to preserve their reputations.

Such crisis plans as existed were at best jumping-off points for companies’ COVID-19 response. The really critical factor was adaptability: the ability to base decisions on new information.

ADOPT A HOLISTIC APPROACH ENSHRINING FUNDAMENTAL PRINCIPLES

Adaptability depends on principles such as empathy, proactivity, proportionality, decisiveness, cooperation, foresight and caution. These often-neglected concepts should be at the heart of crisis management.

Also essential is a multi-disciplinary team that collaborates and example, before curtailing customer support programmes, finance teams should consult customer-facing colleagues, who will tell them that, as our data shows, 96% of customers expect programmes to continue through any second wave.

As well as putting the right leaders in place – crisis management requires a specific skillset – it’s vital to embed the principles across the organisation through training and awareness exercises.

Enshrining crisis resilience principles in processes and culture will create competitive advantage: superior ability to deal with the challenges ahead.

of executives had experienced mental health problems as a result of dealing with crises

of investors think companies can manage crises effectively

of respondents had invested in crisis management in 2019

COMPETE

Crises drain morale, cost money, distract leaders and divert attention from organisational priorities. Resilience is essential to staying ahead, and is achieved by building the ability to predict, confront and overcome rapidly escalating incidents. As the new normal takes shape business leaders must examine the broad crisis landscape which comes with it.

ADAPT

The combination of new technology and an increasingly unforgiving external environment means crises escalate faster and inflict lasting damage. Once distinct concepts, reputation and value are now totally intertwined. As the broader implications of crises become clearer, businesses must be willing to scrutinise their leadership, workforce and systems to identify areas of improvement. A return to fundamental crisis management principles will ensure that business is prepared for emerging threats.

PROTECT

Cyber incidents, industrial accidents, media scandals, global health crises… Events like these can bring companies to their knees overnight. The first priority for business leaders must be to optimally utilise pre-existing systems and capacities, ensuring their organisation can make effective choices under pressure in response to unique scenarios.