Special Situations Planning

Intelligent Management Inc.

What IS A “Special Situation”

Typically, they are called crises, which in many occasions they are…

But from a business perspective, you must think of them in a different context:

A Special Situation is…

AN EVENT THAT OCCURS OUTSIDE THE NORMAL COURSE OF BUSINESS

Crisis Planning vs. Situations Planning

It is counter-intuitive to plan to include “crises” in your business model Nobody says, “hey, let’s have an office fire next

month.”

On the other hand it is totally rational to define “special situations” that could affect your business and then develop action plans, design systems and procedures and deploy processes in order to address them BEFORE THEY OCCUR

QUESTION

When you put the

word “crisis” in

front

of any problem or

issue how do you feel?

Think About This For A Minute… Visualize It…

Your office floods…

You lose data when a server crashes…

A key employee becomes sick or dies suddenly…

A major client threatens to sue you…

An unexpected storm sweeps through your community…

You receive a letter from the IRS saying you owe significant back taxes…

The Answer For Most of Us Is to feel Hopeless…

Because when we think of a crisis, we automatically take on the role of the victim…

It is perhaps, one of the greatest forms of self-victimization because most of us BELIEVE that when we are in the middle of a crisis we are powerless to do anything!

OUR NATURAL STATE OF MIND IN A CRISIS IS TO PANIC!

And When We PANIC… There are a whole set of really

strong primitive emotions that fog our ability to reason:

AngerBlame Fear Doubt

Anxiety Hurt Loss

Confusion Helplessness

Grief Frustration

Every Day Examples People drown in boat accidents

every year, even with ample life preservers and flotation devices in plain view

People die in fires even though they have smoke detectors and fire extinguishers

People die in floods, tornadoes, hurricanes, snow storms, even with ample advance warning

How Do You Prevent Unnatural Events From Overcoming

Your business?

PREPARATION!

&

TRAINING!

Why Does The Military Train?

Key Takeaway About Training

Training only simulates reality, but it helps create structures and processes

Training creates a bond of comradery with fellow team members

Training also uncovers gaps and weaknesses

Key Takeaway About Training

Training creates routines

The more you train, routines become habits

Ultimately habits allow you to put a lot of behavioral “functions” and actions on auto-pilot so that you can use higher portions of your brain to think and prioritize

Just remember what it was like to learn to drive a car – overwhelming at first, but taken for granted today…

Four Crit

ical Elements

To Dealing W

ith

Special Situ

ations

The Four Key Elements of Special Situations Planning

Define

Develop

Design

Deploy

Define

Murphy’s Law: “If it can go wrong it will go wrong… and usually at the wrong time…”

Johnson’s Corollary to Murphy’s Law: “Murphy was an optimist…”

So make time to analyze your business

Go through the process of defining everything that could happen to your business and then rank them in order of SEVERITY AND LIKELIHOOD

Severity vs. Likelihood Severity: Tells you the impact of a

situation or activity on your business

Likelihood: Tells you the potential for a situation or activity to occur

Severity & Likelihood

Low S/Low L

High S/High L High S/Low L

Low S/High L

Develop

Critical Step #2

After you have mapped severity and likelihood, you must then create an action plan for each issue – this is a need to do, not a nice to do

In addition, you must assign responsibilities for each of the issues you’ve identified – Specifically, who will take charge when a specific issue arises and what is their role?

DevelopCritical Step #2 (Cont’d)

A note about your team: Never put your most senior executives in

charge of the special situations team Your senior executives are YOUR LAST

WORD when talking to reporters, legislators, litigators and regulators

They should be held in reserve for two reasons: The company must continue to run during

a special situation – and be seen as being managed effectively by shareholders, employees and stakeholders

You need to prepare them deploy them strategically

Deep Horizon: A Case Study In Why Chief Executives Should Not Be On The

Front Lines After BP’s Deep Horizon rig exploded in the Gulf of Mexico

and leaked 4.9 million barrels of oil, CEO Tony Hayward established himself as company spokesperson. Some of his remarks:

On April 29, The New York Times reported that Hayward, apparently exasperated,.. asked, “What the hell did we do to deserve this?" (A possible answer might be the company's 760 safety violations over the last three years.)

On May 14, Hayward attempted to persuade The Guardian that "the Gulf of Mexico is a very big ocean. The amount of volume of oil and dispersant we are putting into it is tiny in relation to the total water volume."

Only a few days later, he told Sky News that "the environmental impact of this disaster is likely to be very, very modest."

On May 30, Hayward told the Today Show that "there’s no one who wants this over more than I do. I would like my life back." (He has since apologized for those remarks.)

Ultimately BP agreed to set up a $20 billion dollar fund to help with clean up and to help Gulf businesses hurt by the company’s actions… Could things have turned out differently?

Develop

Critical Step #2 (Cont’d)

A note about your team: Instead of your most senior executives,

the team should be comprised of cross-functional representatives who are senior enough to make decisions and take responsibility for the allocation of personnel and resources

For every team member, there should be a backup, because you cannot predict where everyone will be when a special situation occurs (travel, vacations, illness, etc.)

Design (Resources)

Critical Step #3:

Prepare written procedures, practices, contact lists, responsibilities

Ultimately, you should encapsulate all this info in a Special Situations “play book” that is given to each of your key employees

Never presume that everyone in your organization knows what their role is or where to find Special Situations resources

Design (Resources)Critical Step #3 (Cont’d):

Other critical tools in you Special Situations handbook: Employee contact lists with

responsibilities Names of lawyers and other critical

consultants that can be called upon in an emergency

Templates of press releases, where practical

Legal proxies for business management in the event management is incapacitated

Other critical business documentation, who has it and where to find it

Deploy

Critical Step #4

A key resource is training, because it’s not enough to document your “special situation” issues and define roles

Your employees need to be trained on what is expected of them, what the reporting structure is for each step in the process and how they are going to communicate about decision points, action steps and results

Deploy

Critical Step #4:

At least twice a year (quarterly is better), you should conduct scenarios on High S/High L Special Situations

Just like the military trains, your business needs to train

Scenarios uncover missing pieces that you need in your handbook, identify new ways to address select situations, uncover gaps in your process

Conclusions

Special Situations happen to every business

The key to avoiding significant and costly business disruption is to define them, develop plans, design resources and deploy an active response, so you can be as ready as possible

Don’t leave Special Situations planning to chance

Because “Johnson” was right: “Murphy” is an optimist…

Final Thoughts If you would like a complimentary

“Special Situations” analysis of your business, call me at 203-727-7868

I’ll meet with you for two hours and go over the major issues that could potentially affect your business and help you prioritize them

If you’d like to develop a “Special Situations” process we can discuss next steps