CRISIS MANAGEMENT PLAN
OPERATIONAL OVERVIEW
Prepared by:
RICHARD H. SOPER, CMC, CSP
Principal
SOPER & ASSOCIATES, LTD.
THE FREQUENTLY MISSING RISK MANAGEMENT PROGRAM SEGMENT
Presented to:
WASHINGTON CHAPTER
RISK AND INSURANCE MANAGEMENT SOCIETY
SEATTLE, WASHINGTON
NOVEMBER 15, 1994
COPYRIGHT 1994
RICHARD H. SOPER
CRISIS MANAGEMENT PLAN
OPERATIONAL OVERVIEW
THE FREQUENTLY MISSING RISK MANAGEMENT PROGRAM SEGMENT
Focus:
RISK AND INSURANCE MANAGEMENT PROGRAM
VITAL CRISIS MANAGEMENT STRATEGY
Presented to:
WASHINGTON CHAPTER
RISK AND INSURANCE MANAGEMENT SOCIETY
SEATTLE, WASHINGTON
NOVEMBER 15, 1994
Prepared by:
RICHARD H. SOPER, CMC, CSP
Principal
SOPER & ASSOCIATES, LTD.
PO BOX 39
KIRKLAND, WASHINGTON
(206) 889-0113
IMPORTANT: COPYRIGHT NOTICE
Note that the majority of crisis, risk and insurance management strategies, methodologies, tactical systems and/or consulting practices herein identified have been copyrighted by Richard H. Soper or Richard H. Soper, Inc., dba:
SOPER & ASSOCIATES, a State of California corporation or SOPER & ASSOCIATES, LTD., a State of Washington corporation or in articles or texts authored by Richard H. Soper and appearing in: Risk Management, Risk & Benefits Management, Risk Management Reports and/or published in copyrighted text by:
Risk and Insurance Management Society, Inc., New York, New York, Prentice Hall Company, New York, New York and/or the Insurance Institute of America, Malvern, Pennsylvania and/or 'Crisis Management' Chapter XXII, Environmental Risk Management, A Desk Reference, RTM Communications, Inc., Alexandria, Virginia.
Also note that this crisis management syllabus as prepared for the Risk and Insurance Management Society, Washington Chapter and identified as 'Crisis Management Plan Operational Overview', SOPER & ASSOCIATES, LTD.' is copyrighted by Richard H. Soper effective 1994.
PREFACE AND ACKNOWLEDGEMENTS
WASHINGTON CHAPTER
RISK AND INSURANCE MANAGEMENT SOCIETY
SEATTLE, WASHINGTON
This syllabus identifies the Crisis Management Plan as a critical segment of the risk and insurance management program. The Crisis Management Plan encompasses crisis management plan strategy, formulation and implementation as well as on-going operational maintenance.
The intent of this Syllabus is to provide a summarized crisis management strategy applicable to a major private or public sector organization. The proposed strategy is also readily adaptable for the small to medium size organizations. The emphasis of this Crisis Management Plan syllabus focuses on attainable objectives associated with life safety, operational continuity, asset conservation, post-crisis image enhancement opportunities and financial survival. The Syllabus is not considered as a panacea, but merely represents an appropriate operational strategy overview. Furthermore, the crisis management strategy presented entails two equally important interrelated tasks: (1) strategy formulation and (2) strategy implementation.
The Crisis Management Plan should be considered an integral component of an existing risk and insurance management program and interface with business and operating objectives, policies and procedures as well as long-term goals. Regardless of the size of the organization, essential ingredients in the formulation and implementation of an effective Crisis Management Plan strategy are predetermination of sequential task actions, appropriate priorities and delegation of management authority. Initiating emergency action in an organization with formulated Crisis Management Plan policies and procedures simply becomes a case of immediately implementing the previously established action plans. This involves a logical sequence of activities with pre-determined priorities in compliance with previously established crisis management policy.
Despite the most effective planning activities concerning risk and insurance management as well as loss control, crisis and catastrophes must still be anticipated. I am convinced that the results of these losses can be mitigated by utilization of a Crisis Management Plan which encompasses risk identification, measurement, loss control, legal compliance and management accountability. Furthermore, appropriate emergency response capability, training adequacy and restoration strategy should be ensured with a primary focus on pre-loss planning and post-loss recovery.
This syllabus has been formulated with a Table of Contents, Preface and Acknowledgements, four major divisions which include sixteen specific sections. The following represents a topical outline of the divisions and sections of this syllabus:
PREFACE AND ACKNOWLEDGEMENTS
DIVISION I
CRISIS MANAGEMENT INTRODUCTION
Frequently Missing Risk Management Segment
Defining Crisis Management
Crisis Management Plan Justification
DIVISION II
CRISIS IMPACT CONSIDERATIONS
Crisis Exposure Assessment
Crisis Vulnerability Identification
Crisis Exposure Awareness
DIVISION III
CRISIS MANAGEMENT PLAN DEVELOPMENT
Plan Organization and Timing
Plan Strategy and Responsibilities
Plan Emergency Response Strategy
Plan Formulation and Implementation
Plan Recovery Strategy
Crisis Management Plan Manual
DIVISION IV
CRISIS MANAGEMENT PLAN OPERATION
Maintaining an Effective Crisis Management Plan
Managing Highly Sensitive Crises
Crisis Management Plan Summary
Crisis Management Plan Preparedness Exercise
In addition to the above syllabus text, I have included a section of recommended crisis management references, my brief biography and a bibliography limited to my crisis, risk and insurance management published contributions.
This overview syllabus is a composite of excerpts from the Crisis Management Handbook, currently under development by SOPER & ASSOCIATES, LTD. as well as from syllabi used in conjunction with the following presentations:
Society of Risk Management Consultants, 1994 Fall Conference
Santa Fe, New Mexico, October, 1994
Meeting Topic: Crisis Management Consulting
Golden Gate Chapter, San Francisco, RIMS Meeting, November, 1990
Meeting Topic: Crisis Management Plan
Los Angeles Chapter, RIMS Meeting, October 1989
Meeting Topic: Crisis Management Plan
West Coast Regional RIMS Conference
Otter Crest, Oregon, September 1988
Main Session Topic: Briefing and Case Study Crisis Management
National RIMS Conference
Washington, D.C., April 1988
Panel Topic: Crisis Management Strategy
A brief summary of the previous syllabi (1988 and 1989) was accepted in a condensed format and published in Risk Management, the journal of the Risk and Insurance Management Society, Inc., New York, New York, appearing in the September 1989 edition under the title, 'Foresight Must be 20/20 When Creating a Crisis Management Program.' Risk Management, in turn, contributed this article to International Risk Control Review for inclusion in its October 1990 issue.
I am convinced that a non-structured 'brush fire' approach, i.e., dealing with crisis situations as they develop is neither prudent nor acceptable in our current business climate. An effective Crisis Management Plan should be regarded as an integral segment of the risk and insurance management program and conceived of as a broad mitigation approach essential to financial survival should there be a catastrophic loss exposure.
From a personal standpoint, the Chief Financial Officer, the Risk Manager, the Insurance Broker and the Underwriter should view an effective Crisis Management Plan as a vital career safeguard, thus contributing to continued professional growth.
I would like to acknowledge the assistance derived from discussions with Laurence Barton, Ph.D., Penn State, Associate Professor of Management who has focused his teaching, research, development, and publishing efforts on crisis communication and crisis management. In addition, I would like to acknowledge the assistance in the field of crisis and corporate communications derived from discussions with Paul A. Argenti, Ph.D., Professor and Director of the Executive Programs, The Amos Tuck School of Business Administration, Dartmouth College.
I am especially grateful for the assistance in updating and refining the current Crisis Management Syllabus derived from the SOPER & ASSOCIATES, LTD. consulting team. My sincere appreciation extends to the following consulting team members:
Wesley J. Goss, M.B.A, MPA, Principal
George H. Griffin, CPCU, ARM, Director
William Glaezer, Ph.D., CET, Senior Consultant
C. Bartlette Stroupe, Esq., J.D., M.A., Senior Consultant
Annette D. McCully, Senior Consultant
Virginia R. Sundt, Director of Administration
In conclusion, I would like to express my sincere appreciation for the opportunity to present my position statement concerning crisis management, an evolving discipline, to the officers, members and guests of the Risk and Insurance Management Society, Washington Chapter.
Respectfully submitted,
Richard H. Soper
Attachment:
CRISIS MANAGEMENT PLAN SYLLABUS
OPERATIONAL OVERVIEW
TABLE OF CONTENTS
PREFACE AND ACKNOWLEDGEMENTS
SYLLABUS TEXT
APPENDICES
A - CRISIS MANAGEMENT PUBLICATIONS
B - ABOUT THE AUTHOR
C - PUBLICATIONS BY THE AUTHOR
CRISIS MANAGEMENT PLAN
OPERATIONAL OVERVIEW
THE FREQUENTLY MISSING RISK MANAGEMENT PROGRAM SEGMENT
Prepared by:
RICHARD H. SOPER, CMC, CSP
Principal
SOPER & ASSOCIATES, LTD.
KIRKLAND, WASHINGTON
Presented to:
WASHINGTON CHAPTER
RISK AND INSURANCE MANAGEMENT SOCIETY
SEATTLE, WASHINGTON
TABLE OF CONTENTS
PREFACE AND ACKNOWLEDGEMENTS
DIVISION I
CRISIS MANAGEMENT INTRODUCTION
1.0 FREQUENTLY MISSING RISK MANAGEMENT SEGMENT
1.1 Risk Management Program Void
1.2 Warranted Crisis Management Plan
1.3 Comprehensive Risk Management Program
Exhibit 1.1
Elusive Crisis Management Plan Segment
1.4 Inevitable Crises
1.5 Lack of Industry Stakeholder Awareness
1.6 Evolving Crisis Management Discipline
2.0 DEFINING CRISIS MANAGEMENT
2.1 Crisis Management Plan Overview
2.2 Crisis Definition
2.3 Crisis Management Plan Definition
2.4 Crisis Management Strategy Definition
2.5 Crisis Communications
2.6 Reliance on Effective Business Practices
3.0 CRISIS MANAGEMENT PLAN JUSTIFICATION
3.1 Effective Operational Management
3.2 Plan Expense Considerations
3.3 Plan Legal Requirements
3.4 Plan Advantages and Opportunities
Exhibit 3.1
Crisis Management Plan
Advantages and Opportunities
DIVISION II
CRISIS IMPACT CONSIDERATIONS
4.0 CRISIS EXPOSURE ASSESSMENT
4.1 Crisis Assessment Overview
4.2 Comprehensive Analysis
4.3 Evaluating Crises Exposures
4.4 Loss Magnitude Category Severity Rankings
4.5 Magnitude Assessment Schedule
Exhibit 4.1
Crisis Magnitude Assessment Schedule
5.0 CRISIS VULNERABILITY IDENTIFICATION
5.1 Crisis Vulnerability Analysis Overview
5.2 Unique Loss Vulnerability Identification
Exhibit 5.1
Schematic Vulnerability Flow Analysis
5.3 Insurance and Risk Funding Adequacy
5.4 Facility Location Considerations
6.0 CRISES EXPOSURE AWARENESS
6.1 Crises Exposure Awareness Overview
6.2 Legal Compliance Considerations
6.3 Litigation Crisis Exposure
6.4 Environmental Crisis Exposure
6.5 Earthquake Crisis Exposure
6.6 Volcanic Crisis Exposure
6.7 Crisis Awareness Focus
Exhibit 6.1
Significant Crisis Events
DIVISION III
CRISIS MANAGEMENT PLAN DEVELOPMENT
7.0 PLAN ORGANIZATION AND TIMING
7.1 Key Crisis Management Plan Elements
7.2 Crisis Exposure Assessment
7.3 Crisis Management Plan Components
Exhibit 7.1
Crisis Management Plan Organization
7.4 Crisis Management Plan Timing
Exhibit 7.2
Crisis Management Sequential Timing
7.5 Prior to Crisis Timing
7.6 During Crisis Timing
7.7 Immediately Following Crisis Timing
7.8 Post Crisis Timing
8.0 PLAN STRATEGY AND RESPONSIBILITIES
8.1 Crisis Management Plan Strategic Objectives
Exhibit 8.1
Crisis Management Plan Objectives
8.2 Plan Operating Strategy
8.3 Plan Committee Operation
8.4 Plan Operating Authority
Exhibit 8.2
Crisis Management Plan Responsibility
8.5 Crisis Management Committee
8.6 Emergency Response Team
8.7 Predetermination of Priorities
8.8 Crisis Management Audit Committee Option
9.0 PLAN EMERGENCY RESPONSE STRATEGY
9.1 Emergency Response Strategy Overview
9.2 Emergency Response Action Guides Development
9.3 Emergency Response Action Guides Time Periods
9.4 Emergency Response Action Guides Directory
9.5 Emergency Response Strategy
Exhibit 9.1
Plan Emergency Response Strategy
10.0 PLAN FORMULATION AND IMPLEMENTATION
10.1 Plan Development and Operating Overview
10.2 Plan Development and Strategic Operating Summary
10.3 Crisis Management Plan Organization Chart
Exhibit 10.1
Crisis Management Plan Organization Chart
10.4 Crisis Management Plan Task Activities
Exhibit 10.2
Crisis Management Plan Task Activities
10.5 Plan Development Project Management