A recent article in McKinsey Quarterly made me reflect on managing issues – which I’ve done for decades now! And while there is a lot to organizing how to manage them, there are some basics that everyone should consider.
Numbers Around Crises Today
Fivefold increase in amount paid by corporations due to US regulatory infractions to almost $60 billion per year between 2010 and 2015. Globally — $100 billion +. The word “crisis” and the name of one of the top 100 companies as listed by Forbes appeared 80 percent more often than in the previous decade (more than 1000 times).
— According to a McKinsey Quarterly April 2017 article “Are you prepared for a corporate crisis?”
Why Have Issues and Crises Grown?
Depends on where you go for information and what people say. Overall I think there’s been increases in reporting (required and not required), decreases in interpreting and evaluating the reporting (e.g., “fake” news sites, social media sites relaying information without clarification) and companies either not explaining the situation fully/at all or just mistrust of companies. Combined you have expectations for answers, for clarification, for action by the various stakeholders. If a company takes too long to respond, the question is “are they hiding something?” From my own experience – companies are not – they are generally trying to get the information.
There are two “worlds” of crisis or issues management – preparation and response. We’ll deal with response first as that is primarily what I have seen – responding to issues or crises. The overall objective of crisis and issues management is to spend as little time as possible on the crisis/issue. In other words – Get Back to Business as Usual as Quickly as Possible. This is important as it identifies the key people to involve in the different steps.
So, let’s starting with “let’s assume a crisis or issue is recognized” — often the hardest parts. The most critical action is organizing. I have found that a crisis or issue is mitigated solely by establishing a team to manage it and with responsibilities to advise and alert senior leadership of actions. THIS ACTIVITY ALONE HAS HELPED REDUCE A PERCEIVED CRISIS TO AN ONGOING ISSUE. So here are basic steps:
Crisis/Issues Response Management
Step 1 – Crisis or Issue is Recognized
Step 2 – Establish a Crisis/Issue Cross-Functional Team (consider a business unit within a global company)
The team should reflect the various stakeholders to manage and respond to queries on the crisis/issue + a secretary or administrator to help manage the team’s interactions, as well as Legal, Finance and IT (Note, these last disciples can be ad hoc members)
I try to look “backwards” in to who that audience contacts at the company– who will be interested in the issue:
- Consumers (in pharma, perhaps patients)
- Patient Groups
- Regulatory bodies/Reporting bodies
- Employees (Further divide as follows)
- Particular Group involved (e.g., manufacturing)
- Brand or Development Group that Represents the product/investigational agent
- Departments representing key external stakeholders impacted
- Leadership of your business unit
- Leadership of other business units
- Leadership of company
Identify the Team Lead (unless this is ONLY a media issue, it is not a Communications lead). The Lead should always be the person representing the key stakeholder impacted. If it has to do with safety or efficacy of a drug, it should be someone from the medical group (either development or medical affairs). If it’s a mishap in manufacturing, then a manufacturing person should be the lead. These are the people who will be driven most to resolve the situation so that their function can “get back to normal.”
You also need to identify a Team Champion. This should be a senior person who can speak easily and quickly with senior leadership of the organization to apprise them of the status of the issue, and to request more budget and resources. They do not have time to participate in the crisis/issue meetings regularly, but also should have a vested interest in resolving this quickly.
External Support – Depending on the crisis/issue, you may need some external support or consultants to do some of the work, to provide counsel on specific audiences, etc. Remember, the objective is to resolve the crisis/issue as quickly as possible and you may not be able to do it without external support.
Everyone has a lot on their plates and if we all lived in a world of 100 hours a day and expertise in all aspects of his/her job, then yes, they may be able to do it all. But that’s not reality and let’s face it – the crisis or issue came from somewhere and it could be someone who was facing pressure to get things done – I’ve worked on those as well.
Note – all team members should be able to provide insight and counsel on a topic and should have some decision-making responsibility. Thus, the most junior person in a department is not the best choice. I also would argue they may be the most critical person as well for the department to keep functioning on a day-to-day basis and shouldn’t be pulled for crisis/issues work.
Step 3 – Enact the Team
1. Get clearance for participation:
This is a bit harder than people think because of all the work initially involved. First, you need to reach out to the person to ensure they can participate; someone also needs to reach out to their boss to ensure support for them to participate as their work may need to be re-distributed in the department. At the right point, senior leadership needs to know who is on the team and how it is operating but that would come after the team meets.
2. Set overall logistics of the team (contact information, meeting dates/locations, overall flow of meetings, expectations (e.g., decision-making, reviews/approvals, who they need to keep apprised). The secretary or administrative support generally handles this.
3. Team meets
Often the first meeting is longer than subsequent meetings due to initial meeting logistics. You should have good notes taken and action steps. Depending on the issue, legal should provide direction on how best to prepare the notes and next steps.
4. Crisis/issue resolved
In effect, you need to ultimately determine this so that the team can stop meeting and get back to normal. Sometimes people are concerned about doing this, but the decision should be based on whether existing functions can now take on their traditional roles. For example, if there had been product tampering, determine whether the crisis or issue with the particular batch has been addressed to the stakeholders involved and has the reason for the crisis/issue been corrected? if the answer is ‘yes’ then you probably can discontinue the crisis/issues team and allow existing functions to manage things as before.
The McKinsey article suggests separating crises into primary and secondary threats. For example, a manufacturing leak is a primary threat whereas the media in this instance may be the secondary threat. I think you need to address all of them at once even if you reach out to the audiences at different times.
They also suggest small and nimble teams; decision-making authority, access to funding – I agree completely.
Definitely the harder part of the two-sided coin because allocation of resources to do this well is often hard to find. One may find the money, but finding the people is almost impossible. On top of that crises and issues change and that means the team make-up changes so a lot doesn’t make sense. So, there are two aspects to this: crisis preparation and issues preparation
First and foremost – you need to distinguish between a crisis and an issue. Most things are issues only, and often once a system is in place to manage it, the situation becomes much more easily resolved. A crisis is usually something that effects the overall reputation of the company and likely for years. Often times it’s not part of the business DNA. Here are examples to distinguish the two:
- Making a drug “faster” isn’t a crisis for a drug company – it’s an issue as the company manufactures product already, it just needs to do it differently
- A plan crashing into the only manufacturing site that makes a drug to treat life-threatening diseases can be a crisis – plane crashing is out of the norm of business
- Head of the organization faces a severe illness and steps down – I would argue it’s an issue because people do changes jobs or resign and succession plans should have been in place
- Head of the organization is kidnapped and held for ransom – that’s a crisis as kidnapping is never part of business norm
So, a crisis can actually have a plan in place because at that level, it’s likely that some of the same people will be involved to manage it (very senior leaders in the company and the issue often crosses different business units and may impact shareholders).
Here is where I do believe Communications has a major role – ownership of the overall process. While I never believe (except in rare circumstances) that Communications should lead a team, it makes the most sense for them to own the overall development of these systems primarily because communicating often is at the root of helping resolve the situation. However, I would raise it to an executive committee level – meaning – I would get buy-in and support from all the members of the executive committee and ensure they cascade it to their functions in terms of how important it is.
To some extent, this should be done on an ongoing basis. Companies do and should be managing their outputs and systems to identify “differences.” For example, if every week for the last year, manufacturing produces 100 widgets each week, then the plant suddenly producing 80 widgets a week would raise questions and someone would ask – ‘what’s going on – why is there a difference?”
Similarly, every function should monitor the overall tone of their environment to see and note any differences as they would relate to the company’s operations. In Communications, various monitoring and analyses will show if employees are concerned about something; if reporters are asking more questions about safety and efficacy of a particular therapeutic category, etc.
Monitoring and analyzing key markers for environmental changes helps identify an issue. Functions need to allocate resources to do that and should argue for it.
While there is so much more that can be shared, here are a few topline takeaways:
- Get Organized as Quickly as Possible with a Cross-Functional Team
- Ensure People Understand the Issue and Know Their Roles and can Make Decisions
- Ensure a Team Champion to Ensure Resource Needs are Met
- Just like Dr. House would stress, “It’s never lupus!” I would stress “It’s almost never that Communications should be the Team Lead!”