Crisis Management in OrganizationsSession 1 Agenda

1. Overview syllabus, course structure, & requirements

2. Course resources

3. Types of crises

4. Risk audit

5. Systems mapping of crises

6. Team formation & discussion

Wei-ji

“dangerous opportunity”

• What is a crisis?

• How would you know your organization is in a crisis?

• Experiences?

…and give example of each

crisis

emergency

catastropheproblem

disasterrisk

How would you sequence the following :

Low High

• Scope• Severity• Duration

crisisemergency catastropheproblem disasterrisk

SWOT* (or TOWS) Analysis

* Strengths, Weaknesses, Opportunities, Threats

The SWOT diagram often used in strategic planning can be used to identify crisis vulnerabilities

Mitroff, I. I. (2004). Think like a sociopath, act like a saint. Journal of Business Strategy, 25(5), 42-53.

Risk Categorization

http://crisisconsultant.com/wp-content/uploads/2014/11/2012-Crisis-Report_FINAL.pdf

http://crisisconsultant.com/wp-content/uploads/2014/11/2012-Crisis-Report_FINAL.pdf

http://crisisconsultant.com/wp-content/uploads/2014/11/2012-Crisis-Report_FINAL.pdf

http://crisisconsultant.com/wp-content/uploads/2014/11/2012-Crisis-Report_FINAL.pdf

Estimation of Severity or Impact

http://www.riskscorecard.net/article/2-scoring-your-risk-categories/

Estimation of Likelihood or Probability

http://www.rmacleanllc.com/publications/em-competitive-strategy/Risk_Management_MacLean_EM_Jan-Feb_2010.pdf

Black Swan Events– Low Probability/High Impact

1. We can’t manage risks by predicting extreme events

2. Past events don’t help predict unlikely future events

3. We don’t listen to advice about what we shouldn’t do to avoid risks

4. Extreme event risk can’t be measured by standard deviation

5. Mathematical probability is not equivalent to psychological probability

6. Our values of efficiency, debt leverage, overspecialization and maximizing shareholder value don’t tolerate protective redundancy

40 Years of Black Swans

Kryptonite’s Perfect Blogstorm

In September 2004 Kryptonite Locks was confronted with the news that a simple Bic pen could unlock their bike locks. Demonstration videos went viral. Their unsatisfactory response to this Black Swan event lingered after 10 months at a cost of $10m. For their slow reaction they were awarded Business 2.0 Magazine’s Dumbest Business Moment of the Year Award.

https://www.youtube.com/watch?v=LahDQ2ZQ3e0

: How a confluence of factors create a crisis

Your team’s task:

1. Briefly discuss range of work settings/industries in your team and select one industry and setting for risk assessment

2. Brainstorm a variety of crises for the industry (at least 10)

3. Discuss the definitions for likelihood and impact, then rate your identified risks

4. Locate each on Risk Grid

5. Present your grid and reasoning to class

Discussion

• How feasible would it be to conduct a risk assessment with your organization? What would work and against such an audit?

• Where would you get information to help establish estimates for likelihood and severity?

END