Whether the name is Tiger, Towers or Toyota, disaster
management and reinstatement is becoming ever more important.
Peter Cooke discusses how to
deal with disaster and return to normality with minimum
damage.
Go deeper with GlobalData
Over the last weeks I have asked a number of senior
executives across the finance sector what plans they have in place
to manage a corporate disaster. Responses included “I’m sure we
have a plan”, “we’ll deal with it when it happens”, “we are big
enough not to worry” and “it won’t happen to us”.
Look across the increasingly complex and
regulated automotive finance sector and one can probably identify a
clutch of disasters and near-disasters – but are we learning from
them and planning our responses?
“Transparency is great – for others” is a
too-often quoted attitude. The growth of the internet, increasingly
complex reporting requirements and the need to sustain a voracious
24-hour media machine, as well as to support a rapidly growing and
intrusive fee-hungry litigation industry, will make disaster
management ever more important.
Motor finance in its widest context is a
natural to be dragged into the ‘disaster sector’ and because it is
a consumer industry, reputational protection is vital. That a
reputation can take a generation to build and six months to destroy
is an industry truism – for a reason.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData
Manage your crises
‘Disaster’ can be anything from a hand up a
skirt, through product liability and safety, all the way to
mis-selling of finance and the embezzlement of millions. The
essence of disaster management is probably the same – it is merely
the magnitude of response which changes.
Without becoming neurotic, the first step any
organisation needs to take is to establish an early warning
framework regarding potential external problems – disasters are the
big ones, but there are many lesser issues which may require
management to stop the problem growing into a disaster through
inept handling.
Have deals gone sour, do you have disgruntled
clients out there? Have there been adverse media comments, or even
the local Citizens Advice Bureau making representations? Equally,
have you attracted unusual email requests or external searches
regarding the business’ websites? Difficult to trace, I know, but
watching the external situation may offer an early warning.
If something negative does break, take it
seriously. Have a plan in place which is reviewed and revised
regularly, and ensure the ‘remedial team’ know what is expected of
them. Nothing melodramatic but somebody needs to be made aware and
take immediate ownership of the problem once it starts to
emerge.
That in turn means departmental heads accept
that it is better, over the long-term, to raise issues rather than
to seek to suppress or handle them. In turn, that may mean a basic
briefing and update.
The disaster manager may be a senior person
in-house, perhaps at the PR agency, or, with a bigger business,
with a specialist organisation. The key is that whoever holds this
position has the ability to act quickly and authoritatively.
Ignoring the issue is not an acceptable
strategy. Get it out on the table: who is affected by a potential
external relations issue? Existing clients, prospects, suppliers,
owners, individuals, or the brand? Equally, staff should refer any
questions to the disaster management team and be told not to
comment.
Getting a handle on
things
The first step is problem identification:
quantify the problem and identify who or what is involved. Easy to
ask, but harder to resolve. What about a product problem that has
been sold over several years? What about a mis-sold finance
product?
From the identification of the real problem –
as one respondent said, “retribution comes later” – get on with
planning the resolution and impact minimisation. A technical
problem may take time to solve.
Malpractice may have been ongoing for some
time. Other issues may be shorter-term. Just because you are within
the law does not mean you are right – over-smart products may be
great for profits, but not for pensioners.
Getting your response in before it becomes an
issue is a common strategy. Contact as far as possible those who
may have been affected – if a technical issue inform them of a
problem; if it can be fixed quickly tell them.
Otherwise, promise to keep them informed. Have
your lawyers advise on admission of problems – there may be risks
of class actions.
While we may not always like the press
[Oi! – Ed.], in times of disaster the media can be one of
our best friends. Plan how you will release the story – “mea
culpa” and “we apologise, and this is how we will solve it” –
and keep the ‘victims’ and the media informed.
In increasingly global business situations,
there may be a need for different styles of responses in different
markets – but that is a book in itself.
The cost of managing a disaster may be large,
or handling that same event could be relatively small. Do not
measure cost over a single financial year, but treat it as an
investment in the future of the brand.
Do you have a disaster management contingency
plan in place?
Professor Peter NC Cooke, Professor of
Automotive Management, University of Buckingham
