Monday, April 27, 2009

Still Avoiding Planning for a Pandemic?

In two days the World Health Organization has raised the worldwide pandemic alert level twice as the infection rate spreads to seven countries, after apparently starting in Mexico. WHO declared a Level 5, which means it believes a global outbreak of the disease is imminent. More than 150 people have died in Mexico and an infant from Mexico died in Texas this week. Another 2,400 have been sicken in Mexico alone.

Swine flu is a form of a potential pandemic flu and the first two Americans to die in the 1918 pandemic were Kansas farm brothers, drafted for WW I, and victims of swine flu. That outbreak of influenza claimed an estimated 50 million lives around the world and 500,000 in the US alone.

Remember how many millions of dollars and countless hours of worry and preparation were spent in anticipation of the Y2K Bug?

Remember, nothing much went wrong? Did you ever go back and review what you did, what it cost and what it might have cost if you had not prepared?

The World Health Organization (WHO) and the United States Centers for Disease Control are warning of a far greater threat facing the world, than Y2K. And like Y2K, there is not a lot executives, managers and leaders of corporations, small business and other organizations can do to prevent the possible pandemic disaster. But there is a lot they can do to prepare their organizations to avoid total business disaster.

In recent years, medical researchers determined that the pandemic flu usually comes in three waves. A relatively mild version in the spring. It will kill some, but mostly just make many people mildly ill. Then in the past, it disappeared after about two months, only to come back in the fall in full-deadly force, killing thousands and infecting millions of people.

The second wave lasts two to three months and then ends almost over-night. It then comes back the following spring in a very mild form, causing illness but almost no deaths.

While a few good companies and organizations have been preparing for a pandemic, the public and most business owners, executives and managers have turned a deaf ear to the threat.

But there is a great deal you can do to prepare, just in case, and without spending the kind of money that was spent on Y2K.

There are four key areas that you must consider:

1. Cash flow

2. Personnel Policies and issues

3. Legal Issues, i.e. contracts

4. How you are going to communicate with key audiences before, during and after the pandemic.

World Health Organization's Western Pacific regional director says the world is in "grave danger" and "overdue" for an influenza pandemic, since pandemics have occurred every 30 to 40 years and it's been nearly 40 years since the last one.

The normal functions of society have been disrupted in the past outbreaks of 1957 and 1968, but nothing like the world-wide impact of 1918 with workers too ill to work, others staying home out of fear, hospitals strained to meet the demand for care and basic essentials such as transportation, water, sanitation and power were threatened.

If history repeats itself, you have a little time to prepare your business, University, non-profit or almost any other type organization before the worst part of a pandemic strikes later this year.

Hospitals and police departments and other emergency services have been planning for a couple of years, but they have been concentrating on how they are going to "do their jobs" taking care of the sick, keeping cities safe, fighting fires. But, we've found most have failed to plan for keeping their own operations running. If 20-to-40 percent of their doctors, nurses, officers and command staff are out sick, how are they going to carry out the rest of their plan.

Sunday, April 26, 2009

Are You Paying Attention to the Swine Flu?

In the years that followed the world-wide pandemic of 1918, researchers discovered a number of "facts" that are probably very relevant to what is happening around us today.

Those researchers discovered that the pandemic of 1918 came in three waves...the first in the spring of that year. It killed a few thousand people around the world, and made hundreds of thousands ill. But that first wave of flu was relatively mild and because communication between countries as well as communities was primitive by today's standards, no one realized what was happening.

In fact it was only in recent years that researchers discovered the three phases of the pandemic.

It was late September or early October before the deadly phase of the flu pandemic began to spread around the globe, killing half-a-million Americans and an estimated 50-million worldwide.

If the pattern holds true, you still have time to prepare a pandemic business plan and be ready to implement it later this year. To learn more about business planning for a pandemic: http://www.crisisexperts.com/memo1_main.html

By the way, the third phase of the 1918 pandemic showed up in the spring of 1919 with a mutated version of the flu, which was even milder than the first phase the year before

Friday, April 24, 2009

I Ask Again, Are You Ready for a Flu Pandemic?

A little over a week ago (see April 14 post) I asked if your company or organization was ready for a flu pandemic. As has been the case for the past couple of years, most folks ignored the question.

You are putting your business, non-profit, healthcare facility, university or other type of organization at great peril by ignoring that question.

The latest red-flag appeared yesterday (April 23, 2009) when NBC reported at least 60 people have died in Mexico from a deadly strain of swine flu, and at least seven people in California have been diagnosed with that same strain.

Let me remind you -- every 30-to-40 years the world is hit with a pandemic that sickens and kills people across the United States and in every other corner of the globe. These pandemic outbreaks have been recorded two and three times a century since at least the 1500s.

The last three were in 1918, 1957 and 1968. 70,000 Americans died in 1957 and only about 35,000 died in the U.S. in 1968. But in 1918, half-a-million Americans died in a six-month period, and an estimated 50-million more died around the world.

The first documented U.S. deaths were two brothers from a Kansas farm family, drafted into basic training for World War I and both died of swine flu.

In addition to all the health-safety issues you need to be considering, there are "business" issues that demand your attention NOW, before the next pandemic strikes.

I talked about those in the earlier post. Not the least of those plans is a communication plan that should already be in place and reassuring employees, vendors, customers and investors that you are preparing your organization and will not only get through the next pandemic, but recover quickly and effectively.

Wednesday, April 15, 2009

What Would You Do If You Were Domino's?

Domino's is facing a "buger" of a problem with its pizza!

Earlier this week, two employees of a franchise store in North Carolina posted a "store-made" video on YouTube. While a young woman narrates and laughs, a teenage boy is making a sub sandwich, allegedly for a waiting customer.

He pokes cheese up his nose and appears to pull a buger from his nose and put it on the sandwich. By one estimate, more than 700,000 people have seen the 2-and-a-half minute video. Millions will eventually see it, because it's being forwarded by folks who find it on YouTube, and who want to gross out their friends.

Domino's is being criticized by some communication experts and certainly the company's brand and quality is being battered by the disgusting video that is going "viral," as they say!

The company's statements have been pretty good, except for an initial reference to "idots." But the debate is over how aggressive and what media tools Domino's is using and should use to fight the damage being done by the video.

One of the things we learned early on at the Institute for Crisis Management is you don't always have to reinvent the wheel. Learn from other companies' failures and successes.

Domino's management should go back a couple of years and study what Wendy's did after a woman claimed to have found a human finger in a bowl of chili she ordered at a California franchise. Wendy's said it didn't make chili with fingers in it and set up a hotline offering a $100,000 reward for information leading to the finger's owner. The Dublin, Ohio-based company said it lost more than $2.5 million from the negative publicity.

Wendy's reported same store sales were down more than 2-percent in the next quarter after the "finger" made news around the world. But, after a couple was arrested and convicted of trying to extort money from Wendy's the publicity turned and within the year, people were enjoying Wendy's chili again.

Tuesday, April 14, 2009

Question: Are You Ready For The Next Pandemic?

The death toll continues to climb, slowly, from the current avian influenza strain that is spreading among ducks, geese and chickens around the world. As of this writing, 257 people have died out of 417 people who have been infected in 15 countries.

Just because it hasn't happened yet, doesn't mean the next worldwide influenza pandemic isn't coming. And, no matter how big or small your business, you cannot afford not to plan for it.

Remember how many millions of dollars and countless hours of worry and preparation were spent in anticipation of the Y2K Bug? Remember, nothing much went wrong? Did you ever go back and review what you did, what it cost and what it might have cost if you had not prepared?

The World Health Organization (WHO) and the United States Centers for Disease Control are warning of a far greater threat facing the world, than Y2K. And like Y2K, there is not a lot executives, managers and leaders of corporations, small business and other organizations can do to prevent the possible pandemic disaster. But there is a lot you can do to prepare your organizations to avoid total business disaster.

While a few good companies and organizations have begun to prepare for a pandemic, the public and most business owners, executives and managers have turned a deaf ear to the threat. But there is a great deal you can do to prepare, just in case, and without spending the kind of money that was spent on Y2K.

There are four key areas that you must consider:
1. Cash flow
2. Personnel Policies and issues
3. Legal Issues, i.e. contracts
4. How to communicate with key audiences before, during and after the pandemic.

WHO's Western Pacific regional director says the world is in "grave danger" and "overdue" for an influenza pandemic, since pandemics have occurred every 30 to 40years and it's been nearly 40 years since the last one.

The worst outbreak of influenza was in 1918 and it killed an estimated 50 million people around the world and 500,000 in the US alone.

The normal functions of society have been disrupted in the past outbreaks of 1957 and 1968, but nothing like the world-wide impact of 1918 with people too ill to work, others staying home out of fear, hospitals strained to meet the demand for care and basic essentials such as transportation, water, sanitation and power were threatened.

Forward thinking companies are already planning for the next pandemic.
Planning should proceed on these fronts:

How are you going to maintain a minimal level of productivity for two to six months?
How are you going to communicate quickly and effectively with employees and vendors and customers?

Human Resources, Finance, Legal, IT, Purchasing, Transportation, Marketing and Sales all need a plan to keep the business functioning. Plan for how you are going to keep operating with up to half of your employees out sick or afraid to come to work, and knowing that some will never be back. Or, plan for when you will shut down and how you will make that decision and communicate that decision to your employees, vendors and customers.

What's the minimum workforce with which you can continue to operate safely? When you have as much as half your workforce out sick, or afraid to come to work, what can you do to meet production demands? When a number of those sick employees never return to work, where will you find qualified replacements? How long will it take to train them?

When your vendors are facing the same sickness and absenteeism, and your delivery services are slowed by sickness, how will you maintain production?
The communication challenge is just as significant.

You need a plan in place to communicate with employees, to reassure them, if you can:
~ their jobs will be safe
~ this will end and life will return to normal (whatever that is)
~ the company will stand by them and their families if the worst happens

You will need to daily update employees, partners and customers about the progress you are making in overcoming the challenges of the pandemic. But, be honest. You may be slowed by the illness or work may be temporarily halted.

To compound the threat, companies doing business overseas have people traveling back and forth regularly. In fact, CDC is warning people that plan to visit Asian countries for more than ten days to immediately go to hospital with any hint of pneumonia or respiratory problems.

Healthcare insurers and providers should already be developing their plan, and charitable organizations need to prepare, also. If you depend on volunteers, and they are sick or afraid of getting sick, you will be impacted. If you depend on individual and corporate funding, and work is slowed or temporarily stopped by a pandemic, you will suffer immediate and significant financial loss.

Like preparation for Y2K, planning for something like a bird flu pandemic may seem far fetched and unnecessary. Y2K came and went with hardly a ripple. A flu pandemic will cause ripples even with preparation, but it will cause tidal waves if you do not plan, just in case.

Wednesday, April 1, 2009

This week's question: What's Your Financial Pain Threshold?

I don't know of any organization that can "afford" a crisis.

When the Institute for Crisis Management began 20-years ago, our founder Bob Irvine would ask a prospective client what their "pain threshold" was -- at what point would a crisis or business disruption really hurt the business or organization?

The pain theshold was usually a dollar amount. I was working with a large telecommunication client, beginning the development of a crisis communication plan, and had a room full of senior management and communication staff. I wanted to know at what point senior management would take notice and take an interest in dealing with a business crisis.

The dozen or so folks sitting around the conference table looked at each other in bewilderment. In a corner was the company's CFO. She had been sitting quietly detached from the disucssion. It appeared to me she would rather have been anywhere but in this meeting. When no one spoke up to answer my question, she matter-of-factly replied, "50-million-dollars." That number did not compute with me. My checking account doesn't go that high!

This was a big, successful company, and she explained that if the loss or cost of a business crisis began to approach $50-million, it would have a significant impact on the bottom line and share value.

Ultimately, when we wrote the crisis communication plan, among other "triggers" to activate the crisis plan, we set a "loss" of $250,000 as one of those triggers.

A reporter called from South America last week wanting to know how a significant business crisis would impact a company's share value. I refered her to a study conducted by Oxford University on "The Impact of Catastrophes on Shareholder Value.

Researchers Rory Knight and Deborah Pretty looked at 15 case studies over a 20-year period and concluded that organizations affected by catastraphes fall into two distinct groups -- recoverers and non-recoverers. The report says the initial loss of shareholder value is approximately five-percent on average for recoverers and about 11-percent for non-recoverers.

However, for the recoverers, those companies that responded quickly and effectively, both operationally and with good internal and external communications, their report found that by the 50th trading day after the crisis struck, the average shareholder value had rebounded to the "plus" side by five-percent.

The companies that did not manage the crisis or their communications well suffered a net negative cumulative impact of almost 15-percent up to one year after the crisis hit.

If you are working for a non-profit or privately held company, you can translate their findings to your situation. Financial support will drop off dramatically for the non-profits and sales and bank support will go in the toilet if you do not respond with a good action plan and an effective communication plan.

Do you have a crisis operations plan? A crisis communication plan? A business recovery plan?

You need all three, and in the best of all worlds, these three plans should be integrated into one good and tested crisis plan.