LETTER FROM AMERICA: Planning for crises in business is not a luxury

As shocking survey results reveal that corporate America is still failing adequately to plan for crises, PROs can take the lead in convincing clients to be prepared, writes US commentator Paul Holmes

To paraphrase Michael Corleone in The Godfather, if history has taught us anything, it is that a crisis can happen to any company at any time.

Apparently, however, history hasn't taught us anything, because most corporations continue to act as if nothing could possibly go wrong with their businesses.

Two separate research studies released last week provide a glimpse at the denial that apparently permeates American business. First BritishAmerican Business and Peppercom found only 27 per cent of companies had conducted any research to determine vulnerability to scandal, and only 16 per cent had conducted workshops to simulate crisis scenarios. Nearly a fifth of respondents believe their companies have taken no steps at all.

Then a study released by the Foundation for Public Affairs reported that despite increased interest in public affairs, nearly a quarter of the companies responding have not even established crisis management teams.

Did the CEOs of these companies not read the headlines last year? Or do they believe that if they stick their heads in the ground, all their problems will simply disappear?

More than a decade ago, Ian Mitroff of the University of Southern California published one of my favourite books about crisis management, titled We're So Big and Powerful Nothing Bad Can Happen To Us. It explored the reasons companies fail to plan for the worst case scenario - in many instances it comes down to believing their own hype.

But the book also provides evidence that companies which fail to plan for crises are most likely to experience them. The act of conducting a crisis audit, of analysing possible risk factors and of running a crisis simulation helps companies avoid problems.

It aids companies in identifying potential problems early, creates an atmosphere of vigilance, and helps employees understand how their actions can have negative reputational consequences.

Mitroff has recently been working with the Council of Public Relations Firms. Perhaps PROs would be wise to unearth some of his research and present it to clients in the hope that they might come to see crisis planning not as a luxury, but as an essential part of a comprehensive business insurance package.

Or maybe we should just keep our collective mouth shut. After all, when crisis does strike these companies - and it surely will - we'll be able to set our own fees.

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