Why Crisis Management Plans Are Essential

If a fire starts in your factory and burns down your neighbor’s bakery, or your partner is arrested for drunk driving, are you prepared to handle a crisis?

Most small-business owners are not, according to public relations experts skilled in crisis management. Yet, they say, how you conduct yourself during a crisis can save your business from disaster.

“The most important thing is to respond quickly and tell the truth,” advises Howard Bragman, president of Bragman & Co. public relations in Los Angeles. “You are in much better shape if you tell the public about a problem rather than letting the media find out first.”

Bragman, a former vice president and media relations director for the giant Burson-Marsteller public relations firm, has helped big and small companies cope with financial disasters, lawsuits, product failures, government investigations, deaths and natural disasters. Recently, he helped L.A. Gear, the trendy athletic footwear firm, deal with questions about its fluctuating stock price.

“Any small-business owner who doesn’t have a crisis management plan is derelict in his duties,” says Martin Cooper, president of Cooper Communications in Encino. “Even the smallest company can create its own plan.”

Last summer, Cooper was called in by the owners of a West Los Angeles day camp after a 5-year-old boy drowned in the swimming pool. Cooper and his associates helped the camp owners communicate with the boy’s parents, the parents of other campers, the community and the press.

As painful as it might be to think about the worst, it’s better to be prepared. Cooper suggests making a list of all the possible natural and man-made disasters that can befall your business.

In an article for the Public Relations Journal, one PR executive came up with a list of 50 potential business disasters including bankruptcy, layoffs, industrial accidents, product defects, bomb threats and unethical conduct by employees. In recent months, raids by U.S. immigration officials and hostile takeovers have also made headlines.

With your personal disaster list in hand, sketch out a brief plan to deal with each problem. Then call a meeting to explain the plans to a carefully selected group of employees who will help you implement them. Be sure to choose one company representative to deal with the press and the public. This will lessen the confusion of several people dealing with the outside world.

Cooper suggests carrying a list of names and home telephone numbers in your wallet so you can reach your attorney, accountant and members of your crisis team night or day.

“One of the keys to effective crisis management is to move quickly,” Cooper advises. “Figure out who needs to know what and when they need to know it. How you deal with the media in the first hours often spells success or failure for a company.”

If a disaster strikes, it is important to remain calm and quickly review the situation. Making decisions in the midst of chaos is not what your company needs to survive a disaster.

He and Bragman suggest alerting your managers and employees right away so they don’t hear about a problem from an outside source. After informing your staff, be prepared to answer the following questions from the press or public officials:

How did the crisis occur?

What is being done to help those affected?

What will be done prevent this from happening in the future?

In the case of the drowning at the day camp, Cooper asked the camp counselors to ride home with children on the buses to meet with parents and explain what happened. Cooper also called in a bereavement counselor to meet with the children who were in the pool at the time the boy was found. He later invited a representative from a camp association to conduct a safety inspection at the camp. Cooper said an independent review of the incident showed that there were four lifeguards on duty at the time of the accident. A lawsuit filed by the boy’s parents against the camp is still pending.

Once you have taken the time to develop a crisis management plan, make sure everyone knows where it is kept. And don’t let it collect dust. Cooper recommends testing the plan twice a year by conducting a mock disaster drill. After the drill, evaluate how the plan worked and revise it if necessary.

If you decide to hire a public relations consultant to prepare a crisis management plan for your company, be prepared to spend between $5,000 and $15,000.

Survey Finds Small-Business Owners Optimistic About ‘90s

Small-business executives are optimistic about the business climate for the 1990s, according to a national survey recently conducted by Chicago-based Reliable Corp.

“Small businesses employ more than 60% of the labor force and contribute half the goods and services produced in this country,” said Gary Rovansek, president of Reliable, which sells office products. “They are a barometer of the country’s business activity and often reflect significant business trends.”

He said Reliable’s 1990 Small Business Outlook Survey was based on a poll of 3,100 small-business executives.

According to the survey, the most important issues facing small businesses in the 1990s include the cost and availability of qualified labor, providing employee benefits and coping with government regulations.

More than half of the respondents said they expected to find it difficult to fill skilled technical positions in the 1990s. Forty-two percent anticipate problems hiring professional employees, and 25% foresee difficulties finding employees for unskilled positions.

Almost 35% of small businesses surveyed plan to offer profit-sharing programs in the 1990s--a 42% increase from the number of businesses with such programs in the 1980s.

Pension plans will also gain in popularity as 30% of the respondents intend to offer them, a 20% increase from this decade.

Meanwhile, banks will remain the primary source of investment capital during the 1990s, according to 63% of the executives polled. Three percent are counting on joint ventures for their capital and 2% plan to issue stock.

Session Planned on Business Opportunities for Women

“Getting Ready for Prime Time” is the theme of the First Annual Conference on Opportunities for Women in the 1990s, scheduled for Sunday, Jan. 21, at the Los Angeles International Airport Marriott, 5850 Century Blvd. Subjects to be covered range from time management to how to make an effective business presentation.

Sponsors of the session, which runs from 9 a.m. to 5 p.m., include PPP Productions, the USC School of Business Administration, Women in Business, Women in Communications and Women in Cable. The fee is $99 in advance and $129 at the door. For information, call (213) 281-3141.

OPTIMISTIC VIEW

The nation’s business outlook for the 1990’s according to small-business executives

Excellent: 5.4%

Good: 54.5%

Fair: 35.2

Poor: 4.9%