Issue Audits Can Identify Crisis Scenarios and Steps to Reduce Risks
Crisis planning should include more than how to handle specific crisis situations. It should reveal crisis situations that can be avoided through anticipation and mitigation. Well-executed issue audits can produce both results.
This requires a marriage of crisis planning and risk management. It’s a marriage that recognizes some crisis situations are unavoidable but many potential risks are avoidable.
Comprehensive, candid issue audits identify crisis scenarios that can occur, threatening operations and reputations. Crisis scenarios are the backbone of a crisis plan designed to prepare for the unique circumstances of a specific crisis situation. For example, a college would respond very differently to a data breach than a campus riot.
Unearthing potential crisis situations through an issue audit affords the opportunity to identify ways to prevent or mitigate crisis situations. This is the reason risk insurers often pay for issue audits. Identifying and mitigating risks can be more cost-effective and better for reputations than planning for when a crisis occurs.
Enlightened executives should view a list of risks and how to mitigate them as an invaluable management asset and reputational protection.
An issue audit can identify crisis scenarios as well as opportunities for risk mitigation to avert a crisis.
Case Example
Here’s an actual case that proves the point. A utility electricity switch failed, triggering a power outage that disabled high-grade metal manufacturing equipment. Circuit breakers and overrides worked as designed to prevent mechanical engines from overheating and catching fire. What didn’t work as planned were scrubbers and a crane, which required a reset. Unfortunately, the reset button was located in the room where a metal part was dissolving in a cloud of hydrofluoric acid.
An issue audit would have identified a rolling crisis caused by a power outage. There was an operational response in place but it overlooked the consequence of being unable to safely reach a critical reset button to reactivate scrubbers and a crane to lift a metal part out of its chemical bath. That oversight would have been on a list of risks to mitigate by moving reset access to safer locations.
The episode also revealed another management oversight – coordinating with the local fire department’s hazmat team. Four people – two company employees and two firemen – were taken to the hospital after they mistakenly were washed down for hydrochloric acid exposure. The four people were exposed to hydrofluoric acid that is properly treated by being blown off. A post-incident evaluation revealed the company had not actively coordinated with local officials on how to handle likely incidents. An issue audit would have flagged that oversight.
Crisis Planning
Issue audits inform crisis plans. Instead of chapters or sections, issue audits center on crisis scenarios with unique circumstances and demands. A toxic spill is very different that discovery of embezzlement. Each crisis scenario has varied demands for background resources, operational responses and official notifications.
Organizing around crisis scenarios creates the opportunity to think in advance about a specific crisis response to a specific crisis situation. Who would need to be involved in a crisis response? Is there relevant background information that could be prepared in advance? Is the designated spokesperson well-versed on the causes and remedies of the crisis situation?
Crisis scenarios can become the focal point for ongoing engagement on crisis response. This level of granularity invites continuing staff and management conversations about crisis response in light of changes in operations, personnel or media coverage. It makes a crisis plan a living document as opposed to a dusty file on the shelf.
Crisis scenarios are a tactical means to see potential crisis scenarios over the horizon. This allows a proactive crisis response before a crisis situation fully develops.
Risk Management
Issue audits provide a forum to look at existing, emerging and potential risks. The U.S. military calls this “threat awareness” planning. Insurers refer to it as risk management.
Whatever you call it, a 360-degree assessment of existing and emerging operational challenges offers an opportunity to brace for what could happen and identify steps to make it less likely to happen. Those steps provide a map for managers to manage risk.
In conducting many issue audits, it is common for participants to express surprise at discoveries that can lessen exposure to crisis situations. They come to the table expecting to plan for crisis without realizing the best crisis plan is avoiding a crisis.
Having a viable crisis plan is essential to effective crisis response. Using issue audits to ferret out ways to mitigate risk is an effective crisis response, too.
Crisis counselors warn clients crisis may be inevitable. Experienced crisis counselors also advise clients that a healthy management lifestyle that includes identifying and mitigating risk factors can make inevitability less likely and less damaging when they do occur.
