Sunday, November 7, 2010

The Value of Scenario Planning Exercise

Singapore. (7 Nov 10).  A 1986 Study by Fink, S (Crisis management: Planning for the inevitable. New York: AMACOM) reported that 89% of Fortune 500 companies CEOs believed the inevitability of a crisis impacting their business.  Strangely, in the same survey, only 50% of those same CEOs had developed a plan to handle it.  A more recent 2003 survey by the American Management Association showed that not much has changed.  Of the 146 companies surveyed, only 64% of them had a crisis management plan in place.

So why do heads of businesses acknowledge that business crisis are inevitable, and yet do nothing about it?  Based on my recent conversations with the heads of various companies, they all tell me the same thing - they know that a crisis is inevitable, but feel that it is impossible to prepare for as crisis can take an infinite number of form.  Hence, they feel that their time is better spent dealing with things they can predict.

While I agree with them that it is impossible to predict the exact nature of a crisis, I explained that effective crisis preparation does not require them to identify the exact nature of the crisis.  This is because aside from the actual Messages to be used, effective Crisis Management and Crisis Communication is also about having the right procedures in place.

In today's connected world, an incident can escalate to a crisis in a matter of hours.  Employees and managers must therefore know basic crisis management procedures like (a) what they can or cannot say and (b) how or who should handle media queries.

My proposal to them is to conduct scenario planning exercises to (a) identify existing procedural gaps; and (b) practise and familiarise key appointment holders in the thought processes behind dealing with a crisis communication situations.  While the context of the exercise is likely be different from any actual crisis the business will face, working through scenarios will inevitably better position the business to manage a crisis.

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