2013 Crisis Survey
1
Methodology
PSB conducted a total of 201 online interviews in Europe amongst businessdecision makers in October 2013 Business-decision makers are defined as respondents who:
Region
Sample size
Margin of error
France
40
+/-16
Germany
40
+/-16
Aged over 25,
Full time or self employed/business owner
Have an active interest in business and current affairs issues,
Italy
40
+/-16
Have final or significant decision making power in their business.
Spain
42
+/-16
United Kingdom
39
+/-16
Overall
201
+/-7
Overall, half of the respondents were from large enterprise businesses and half were from SME businesses
THE THREAT OF CRISIS IS A KEY CONCERN FOR BUSINESS LEADERS
3
The threat of crisis remains a key concern Q64 As a business decision maker, what are the top three concerns that keep you up at night?
Base: Overall (201)
A crisis is defined as a disruption to the business which puts the company’s future at risk Q17 What does ‘crisis’ mean to you in a business context? “An internal or external situation that starts to disrupt the life of the business” -France SME-
“when you start to lose customers for whatever reason” -Germany SME-
“A crisis creates opportunity for realignment and correction” -Germany SME“event or events which need to be tackled urgently with maximum resource, which have their potential to do serious harm to the business.” -UK SMEBase: Overall (201)
“where the future of the business or part of it is at serious risk” -UK enterprise-
41% of business leaders continue to experience crises
Q39 Has your company experienced a crisis while you’ve been working there?
59 53 47 41
HAVE NOT EXPERIENCED A CRISIS Yes
2011
HAVE EXPERIENCED A CRISIS No 2013
Base: Overall 2013 (201),Overall 2011 (204), Overall 2009 (200)
HAVE EXPERIENCED A CRISIS WITHIN THE LAST YEAR
Controversial company developments is STILL the most commonly encountered crisis… Q43 What sort of crisis did your company encounter? (Among those who experienced a crisis) 34 36
Controversial company developments (e.g. lay offs)
39 21 19 17 20
Logistical difficulties (e.g. problems with transport/delivery)
Technical accidents (e.g. natural disaster or explosion)
8 10 18
Critical or negative new media campaigns (e.g. criticism over social media)
“Lay-off of huge number of employees due to internal unrest within the organisation” -UK, Enterprise
11
Danger to product safety (e.g. defective or contaminated parts)
17 16
Online or digital security failure
13 15 17
“The Icelandic volcano stopping flights over Europe meant our customers were unable to travel – we also had customers stranded” -UK, Enterprise
15 Intense regulatory scrutiny of your company 12 12
Intense political scrutiny of your company
2013 6 Criminal actions (e.g. bomb attack or fire)
9
2011
4
2009
Base: Experienced a crisis (82)
“Failure of computer security allowed third parties access to our database” -FR, Enterprise
‌It is ALSO the crisis that companies most expect to experience within the next year Q30 How likely do you think it is that your company will experience each of the following in the next 6-12 months? 56% of Enterprise respondents think it is likely, in comparison to 34% of SMEs.
45
43
47% of Enterprise respondents think it is unlikely, in comparison to 32% of SMEs.
28
43
37
33
26
39
66
71
74
62
Intense regulatory scrutiny
Technical accidents
55
56
57
61
Controversial company developments
Logistical difficulties
Online or digital security failure
Critical or negative new media campaigns
Likely Base: Overall (201)
Unlikely
Danger to Criminal actions product safety
Organisations TEND TO ANTICIPATE THE SAME KINDS OF CRISES THEY HAVE ALREADY EXPERIENCED Occurrence: High Concern: High
Crisis encountered
Occurrence: High Concern: Low
Technical accidents (such as a natural disaster or explosion)
Danger to product safety (i.e. defective parts or contaminated materials)
Occurrence: Low Concern: Low
Intense political scrutiny of your product or company
Critical or negative new media campaigns (e.g. criticism over social media / online channels)
Intense regulatory scrutiny of your product or company
Occurrence: Low Concern: High
Criminal actions (such as a bomb attack or fire)
Controversial company developments (such as lay-offs or restructuring)
Logistic difficulties (problems with transport or delivery)
Online or digital security failure (E.g. personal information on customers lost, or company internal emails being stolen)
Perceived likelihood of company experiencing each crisis
Base: Overall (201)
Experiencing a crisis is EXPENSIVE Q151 Approximately, how much did the crisis cost your company? (Among those who have experienced a crisis)
SMES SAY A CRISIS COST THEM BETWEEN €10,000- €49,999
ENTERPRISES SAY A CRISIS COST THEM BETWEEN €500,000- €999,999
THE AVERAGE COST OF A CRISIS TO A COMPANY
Base: Among those that had experienced a crisis from DE, FR, IT and SP (72); overall SME (38); enterprise (34)
FOR MANY COMPANIES CRISIS MANAGEMENT IS STILL HANDLED INTERNALLY
11
INTERNAL TEAMS remain primarily responsible for crisis planning Q101 How did your company develop its crisis management plan?
51 We have an internal team that created a crisis action plan 62
2013 33
We used both external and internal resources to develop a crisis action plan
We employed an outside firm to create a crisis action plan for us
18
12 14
9% of SME in comparison to 15% Enterprise
Base: Those with a crisis plan 2013 (102); those with a crisis plan 2011 (105)
2011
The proportion hiring an outside company to deal with a crisis has almost doubled since 2009 Q44 What did your company do at the time to manage the crisis? (among those that had experienced a crisis)
51 47
35
34
30
24 15
12 8
We handled the crisis internally either through the We have/had an in-house team especially dedicated We hired an outside company to help us manage Public Relations Department or Senior Management to dealing with crisis management the crisis
2009
2011
2013
Base: Experienced a crisis 2013 (82); Experienced a crisis 2011 (123) ; Experienced a crisis 2009 (106)
In the event of a crisis, INTERNAL ACTIVITIES are the focus Q112-131 Please place these steps in the order of the steps you have or would go through in a crisis situation Prepare an internal audit Establish a crisis team Organise a crisis check-list Receive training from your internal crisis team Monitor Issues Conduct a crisis workshop Receive training from your external crisis team Prepare Press Statements Evaluate crisis scenarios Publish and distribute a crisis manual Have an on-site crisis team Call your crisis hotline – run by an external company Train crisis team in media relations Engage with consumers/public Engage with local or national politicians Engage with online stakeholders Engage with digital communications / social media Engage with national regulators or public authorities Engage with European Parliamentarians Engage with NGOs Base: Overall (201)
47 43 42 42 38 31 30 29 28 25 25 23 20 18 13 12 11 8 6 5
Opinion is split on the best style of LEADERSHIP when managing a crisis Q133A Which of the following two styles of leadership do you believe to be most effective when managing a crisis?
Q133B Thinking about the most effective attributes for a leading team or figure to have when directing a business out of a crisis, which of these are most important? (top 8) 48 43
Accountability 50
50
48
43 45
Decision-making
43
Clear vision
39 36
Strong interpersonal skills
38 33 36 41
Excellent communicators
Command and control
C-Suite
Collaboration
Non C-Suite
Ability to delegate and empower
31
Setting direction
30
Ability to challenge status quo
C-suite
Base: Overall (201); C-Suite (107); non C-Suite (94)
37 39 26 27
Non C-suite
NEW MEDIA HAS ADDED TO THE CHALLENGE OF MANAGING CRISES
16
A third say it is MORE DIFFICULT TO PLAN for a crisis Q50 Do you think it is more or less difficult for companies like yours to plan for a crisis than it was 5 years ago?
32 43
More difficult
44 42
Less difficult
23 15 2011
About the same
2013
The pressure to RESPOND QUICKLY is an increasing difficulty in planning for a crisis Q52 Which, if any, of the below are reasons why you feel it is more difficult to plan for a crisis today? (Among those who feel it is more difficult to plan) 50
34
2011 35
33
31 24
30
2013
33 29
21
21
18
Need to respond extremely More globalized nature of Increased anti-corporate Increased public demand Overall challenges of digital Rise of citizen journalism / quickly communications sentiment in public and/or for transparency communications social media (e.g. media Facebook, Twitter)
“Globalization, changes in environmental conditions, transparency, sustainability.” -Germany enterprise-
“More channels to address, increase in stakeholder groups and groups of 'interested but biased' parties. Misinformation via the internet.” -UK enterprise-
Base: Those that say it is more difficult to plan for a crisis 2013 (66); those that say it is more difficult to plan for a crisis 2011 (90)
Recent high profile scandals have increased concerns and PROMPTED THOUGHT AND PLANNING “There have been a number of high profile crises over the past 12 months including the horsemeat scandal, the fixing of Libor, and the US Government shutdown.” Q53 To what extent have these crises increased your own company’s concerns regarding potential crises?
Q56 To what extent have these recent crises made your company think about its own crisis planning?
23
Increased
Stayed about the same 69
Decreased
8
Base: Overall (201)
SAY THAT RECENT CRISES HAVE MADE THEIR COMPANY THINK ABOUT ITS OWN CRISIS PLANNING
An increasing number of companies HAVE a digital crisis communications plan Q110 Does your current company have a digital crisis communications plan?
Q111 How did you or your company develop its current digital crisis communications plan?
62
We have an internal team that created a crisis action plan
28
57
39
Yes 31
We used both external and internal resources to develop a crisis action plan
22
2013
No 57 52
2011
We employed an outside firm to create a crisis action plan for us
2013
Base: Overall (201); Overall 2011 (204)
2011
8 20
Companies still FEEL OVERWHELMED by online communication channels “A major factor in these crises was the online public debate over new media channels such as Facebook, Twitter and blogs.” Q54 What do you think are the biggest issues for companies in crisis like Tesco, Barclays, and the BBC when responding to the online public debate? 37
29
28 21
20 16
Slow response time
Lack of dedicated team to respond to new media
“They should have a team that monitors all new media for any potential crisis and responding quickly with damage control.” -UK SME-
New media (including social media) channels flooded with negative commentary
Treating old and new media types differently
“The communication with the public has changed, but, many companies do not know how to handle it and use old communication methods .” -Italy SME-
Base: Overall (201)
Being undermined by employees
Not seeking the support or assistance from third parties
“It is a whole new ball game with rumours ricocheting around the digital world.” -UK SME-
New media has increased pressure during crises, but used correctly IT CAN HELP manage reputation 70% of respondents believe that new media is playing an increasing role in driving reputation during crisis
59% Think that new media has significantly increased the potential cost of a crisis
64% believe that new media (including social media) makes crises more difficult to manage
50% Think social media has made it harder to recover from a crisis, while the other 50% believe it has made recovering easier
60% Believe that it is hard to know who influences opinion online
Base: Overall (201)
CORPORATE PURPOSE IS A VITAL TOOL IN THE CURRENT LANDSCAPE
23
91% say that their company has a clear corporate purpose QCP1 What do you understand by the term ‘corporate purpose’?
QCP1 To what extent do you agree or disagree that your company has a clear corporate purpose?
Disagree
8% but only 45% “strongly” agree; 46% agree “somewhat”
“Your governing ethos, what makes the company tick” -UK enterprise-
“This is the identity of a company” -France enterprise-
91%
Agree
Base: Overall (201); agree & disagree (top 2 box)
Corporate purpose enables organisations to deliver across key reputational metrics QCP4 To what extent do you agree or disagree with the statements below? (% strongly agree) 52% amongst those with a plan and only 32% amongst those without 45
Has a CP
No CP* 27% amongst those without a plan
43
41
37 40
22 22
28
17 11
My company has strong leadership
My company invests in employee development
My company contributes to society
My company acts in an My company invests in the local environmentally responsible way community
*Denotes a low base size
Base: Companies with a CP (183); Without a CP (18)
And becomes EVEN MORE IMPORTANT during a crisis
Q44A Did you use your corporate purpose in external communications to talk about what you do and why you do it, in dealing with the crisis?
Q44C To what extent did having a clear corporate purpose help you in managing the crisis?
“It acted as a reminder to staff of the objectives of the business” -France SME-
OF THOSE THAT HANDLED THEIR CRISIS INTERNALLY USED THEIR CORPORATE PURPOSE TO MANAGE IT
“It was important to keep customers and the media updated as to the impact and what actions we were taking.” -UK enterprise-
“We tried to promote our quality work emphasizing the ethics of the way we work.” -Italy enterprise-
90
Helped
Did not help
11 2013
Base: Among those that experienced a crisis and had a clear corporate purpose (76); among those that used their corporate purpose to handle their crisis (57 )
CRISIS PLANNING IS IMPERATIVE AND MANY COMPANIES REMAIN UNPREPARED
27
Crisis plans are seen as BENEFICIAL yet half of companies still do not have one in place Q95 To what extent do you agree or disagree that having a crisis plan in place would benefit your company?
Q96 Does your current company have a crisis management plan?
49
51
51
76 86
85
Yes
Agree
Disagree
No
51
49
49
2009
2011
2013
23 14
16
2009
2011
2013
Base: Overall 2013 (201); overall 2011 (204); overall 2009 (200)
A third of those without a plan say crisis management planning is NOT A PRIORITY Q157 What are the key barriers to developing a crisis management plan for your company or organisation? (Amongst those without a plan) It’s not a high enough priority
33
It’s rarely going to be needed
31
It’s expensive
25
My business doesn’t need a crisis management plan
24
It would take too much time to plan
18
I don’t feel I have enough information about what is out there and how it could benefit me
14
Too difficult to manage
14
I think setting up such a plan within my company would be difficult to accomplish
Base: those without crisis plan (99)
10
2013
FINANCIAL planning and evaluation of SCENARIOS are the most important components of a plan Q65-89 How important are each of the following components to a crisis preparedness/communications plan? (% very important, showing top 10) Financial planning in case of a crisis
29 30 29 29
Evaluation of possible scenarios
Action Plan for crisis management
43
29 28
Prepared crisis check lists
27 22
A previously set-up crisis team
25 25
Plan to liaise with online stakeholders
23 24
Receive training from your internal crisis team
24 21.00 24 18 19
37
26 25
23
Issue monitoring
2013
27
22
2009 2011
30
23
Internal Audit on crisis awareness, preparedness and management'
Media training
53
35
24
Base: Overall 2013 (201); overall 2011 (204); overall 2009 (200)
24% of those with a plan have NOT TESTED it in the past year Q106 In the past 12 months have you done a crisis communications exercise to test the efficacy of your plan in any of the following areas?
Online or digital security failure
31
Technical accidents
24
Intense regulatory scrutiny of your product or company
21
Controversial company developments
21
Logistic difficulties
19
Danger to product safety
Intense political scrutiny of your product or company
BELIEVE THAT THEIR PLAN WILL COVER THE COMPANY TO SOME EXTENT, BUT THERE WILL BE GAPS
30
None of the above
Criminal actions
IN THE EVENT OF CRISIS:
16 12
11
Base: those with a crisis plan (102)
2013
OF COMPANIES THAT HAVE SUFFERED A CRISIS THINK THEIR CURRENT PLAN STILL HAS GAPS
51% of companies recover from crisis within a year but those with a crisis management plan RECOVER FASTER Q45 How long would you say it took your company to recover from the crisis?
2009
2011
2013
OF COMPANIES WITH A CRISIS MANAGEMENT PLAN RECOVERED IN 6 MONTHS
57
VS
44 38 26 19
15 10 11 6
15 11
8
6
6
2
2 weeks or less
2 weeks-1 month
2-12 months
1-2 years
3-5 years
2
4 0
OF COMPANIES THAT DON’T HAVE A PLAN
5 years or more
Base: Those that experienced a crisis 2013 (82); those that experienced a crisis 2011 (123); those that experienced a crisis 2009 (106)
When it comes to planning for a crisis, there are THREE TYPES of company
Boy Scout (Well-Prepared) Those with strong, comprehensive plans, which will stand up to the pressure of a crisis
20%
Tightrope walker (Vulnerable)
Ostrich (Exposed)
Companies with plans that will not necessarily cover them, or which aren’t sufficiently comprehensive
Lack plans entirely, they see only barriers to creating plans and thus avoid making them
40%
40%
THE NUMBER OF EXPOSED COMPANIES HAS INCREASED SINCE 2011
Boy Scout (Well-Prepared)
Tightrope walker (Vulnerable)
2011
2011
2013
22% 20%
2013
45% 40%
Ostrich (Exposed)
2011
2013
33% 40%
STILL ONLY ONE IN FIVE COMPANIES ARE PREPARED FOR A CRISIS Boy Scout (Well Prepared, 20%)
35
•
More likely to think a crisis management plan is important (46%)
•
More crisis focused than other groups • 70% review their plan every year • All say that their plan would be satisfactory to take on a crisis. • Have a specific digital crisis comms plan (76%)
•
Most common components include: • Evaluation of possible scenarios (49%) • Action plan for crisis management (46%) • Prepared crisis check-lists (44%) • Internal audit on crisis awareness, preparedness, and management (41%)
•
Most likely to have a clear corporate purpose (63%) and strong leadership (66%)
TWO IN FIVE COMPANIES ARE VULNERABLE Tightrope Walker (Vulnerable, 45%)
36
•
Have a crisis management plan, and put importance on this (34%)
•
But less engaged with crisis management than the Boy Scouts: • Only 34% say a crisis plan is very important • Less likely to review plan frequently (58% review their plans every year or less) • Only 32% say their plan would be satisfactory in the event of a crisis
•
Main barriers to developing a more adequate plan are the time it would take (22%), a lack of information (21%) and the cost (17%).
•
Less likely to have a clear corporate purpose (51%), strong leadership (51%), and to invest in employee development (48%).
•
Less likely to have a digital crisis comms plan (66%).
TWO IN FIVE COMPANIES ARE CURRENTLY UNPREPARED FOR A CRISIS
Ostrich (Exposed, 35%)
37
•
Do not have a crisis plan – though 27% have experienced a crisis • 39% are currently in a crisis.
•
Less likely to have a clear corporate purpose (36%) or strong leadership (31%), or to invest in employee development (29%).
•
The barriers to creating a plan are: • Thinking it's rarely going to be needed (35%) • It’s not high priority (32%) • It's expensive (25%)
•
Less likely to think having a plan would decrease recovery time in the future.
In summary The threat of crisis remains a key concern for business leaders For many companies crisis management is still handled internally
New media has added to the challenge of managing crises A clear corporate purpose is a vital tool in the current landscape
Business decision makers are split on whether leadership in a crisis TO and control, or collaborationUNLIKELY TO should be aboutUNLIKELY command EXPERIENCE EXPERIENCE REGULATORY SCRUTINYis still crisis planning
However, remain unprepared
POLITICAL SCRUTINY
imperative and many companies