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Crisis trends

01 Jun, 2020 Issues and crises

The Institute defines a business crisis as “any problem or disruption that triggers negative stakeholder reactions that could impact the organization’s business and financial strength”.

The Institute for Crisis Management is actually a private company – and the publication of its figures appears to be a device to get media coverage and to position the company as expert in the field. Nevertheless, its information on crises is interesting.

Sudden versus smoldering crises

In 2018, most of the US crises reaching the news media were ‘smoldering’ – they had been apparent in the background, but no one acted to prevent them or reduce their impact. Around 67% were smoldering, while 33% were classified as ‘sudden.’ The high proportion of smoldering crises indicates managers still don’t understand they should act to prevent or reduce the impact of crises.

Source: Institute for Crisis Management

 

Main US crisis categories in 2018

Source: Institute for Crisis Management

In 2018, the most US crisis-prone industries were:

• Banking, Insurance & Financial Services
• Technology
• Education
• Transportation
• Pharmaceuticals
• Food
• Health care
• Consumer products
• Media and entertainment

Lessons learned

Only about half of organizations worldwide have a crisis plan in place.

• Among the most important lessons learned from the thousands of crises in 2018:
  Examine your company’s vulnerabilities and develop strategies to address them before they are needed.
• Learn from the mistakes of others.
• Build your reputational equity through frequent, honest dialogue with stakeholders.
• Be prepared for a crisis to break first via social media
• Invest in a crisis communications plan. This ounce of prevention is worth a ton of cure.