At the MSBA Legal Summit Series Webinar, a group of experts on managing company crises discussed the top ten tips on how to manage a company crisis. Marisa Trasatti, Esquire, partner at Wilson, Elser, Moskowitz, Edelman & Dicker, LLP and General Counsel of Sciton, Inc., moderated the panel consisting of lawyers, a CEO, a public relations’ expert and an insurance professional. The top ten tips on how to manage a company crisis were identified by the panel of crisis experts:
- Determine What Activates the Crisis Management Plan (Before the Crisis)
- Formulate the Crisis Management Team
- Assess the Crisis
- The Initial Response
- Manage the External Appearance: Public Relations, Media, and Customers
- Manage the Internal Appearance – Advising Employees and Communicating with Key Opinion Leaders
- Adjust the Company’s Promotional & Sales Practices
- Response to Regulatory/Law Enforcement
- Concluding the Plan
This is a 13-week part series that will discuss in detail how counsel can learn how to manage a company crisis from the crisis management experts. In previous weeks, this series discussed the 7 myths of a company crisis and the first and second of the above ten tips to manage a company crisis – determine what activates the crisis management plan and formulating the crisis management team. This week we will be discussing the third of the above ten tips that the experts identified on how to manage a company crisis – Assess the Crisis.
Third Tip – Assess the Crisis!
Assess the crisis before the crisis hits your company! The pre-crisis process of assessing any potential future crisis will give your client an advanced ability to better handle an actual crisis instead of being blind-sided, said Ms. Linda Lenrow-Lopez, Director of Operations, Risk Alternatives, L3 Management Innovations, LLC and an expert in public relations. “Companies that spend time and effort in robust risk management up front are the ones that will have the smoothest operation when the crisis occurs,” she said. By assessing risk in advance of the crisis you can anticipate any reputational damage and other detrimental consequences and then develop a framework to manage the crisis.
How should counsel go about assessing a future crisis? The experts agreed that a company should ask what? why? when? and who? of any future potential crisis. Mr. Terzich, Director of Gallagher Bassett and a risk management expert, likened the assessment of a crisis to an engineer that is building a product. As part of that process, an engineer is required to conduct a failure analysis and consider all the things that could go wrong. After going through that thought process a company will be better prepared to address any potential crisis, he said. Ms. Trasatti agreed, “it is important to have a no blinders approach with a wide peripheral vision in order to predict and assess the impact of the crisis at the outset, and then obviously as you go along.”
It is important to remember that crises come in a myriad of forms so assessing a crisis for a fire will be a separate and distinct assessment than assessing a cybersecurity issue or product recall. By asking the what, why, when and who of each individual potential future crisis, your client will be able to easily see that a unique response plan is necessary depending on the type of crisis. Part of a viable assessment includes considering issues regarding remediation, future avoidance, understanding the business impact, how your company plans to deploy the management team, the impact the crisis will have on customers, the general public and whether your client will have criminal exposure. “The only way to conduct a viable assessment is by understanding the risk up front, planning for that potential crisis and then once the event takes place understanding what happened and how to avoid it down the road,” added Terzich.
Ms. Trasatti pointed out that “a critical key to managing a company crisis is anticipating and pivoting to address the unique circumstances of the crisis.” It’s easier to anticipate and brainstorm pivoting options before a crisis occurs rather than trying to do that during the crisis.
In sum, the experts’ common theme in assessing the crisis is to assess the risk in advance of the event, and develop a plan to address that specific crisis. Companies that invest time and effort assessing any potential crisis before the crisis occurs are the ones that will not be caught off guard and will have a smooth operation when the inevitable crisis happens. Conduct a failure analysis and rigorous crisis assessment and assume everything can go wrong, then pre-plan. Anticipate when assessing and identify options for pivoting during the crisis, if the need arises.
If you want to watch the experts discuss the Third Tip – Assess the Crisis, you may watch the below video:
Join us in the coming weeks as we continue to cover in detail the Top Ten Tips on How to Manage a Company Crisis.
This is the fifth of a 13-week part series that will discuss in detail how counsel can help their clients create a crisis management strategy. This series is designed to assist you, as counsel, in weathering a company crisis. Last week, the MSBA discussed the second of ten tips on how to manage a company crisis. Next week, the MSBA will discuss the fourth of ten tips to manage a company crisis with comprehensive suggestions and actions for implementation. The immediate next six weeks will address, individually, the other five tips to manage a company crisis. The final week will include a comprehensive summation of all the myths and tips including the advice and counsel of the professional panelists listed below. In week one of the series, the MSBA generally discussed the top ten tips on how to manage a company crisis and you may read the article here. Week two was a detailed summary of the 7 myths of a company crisis. The MSBA wishes to express sincere gratitude to the professional panelists, without whom it would not be possible to offer this series.
Aaron C. Burton, CEO of Sciton, Inc. Sciton, Inc. is the largest privately held dermatological and medical device laser manufacturer. Aaron shared his experience as CEO and especially the crisis that developed at Sciton during his first year. Aaron also generously shared how Sciton handled and is continuing to endure the COVID crisis.
Linda Lenrow Lopez, Director of Operations, Risk Alternatives, L3 Management Innovations, LLC. Linda has more than 25 years of experience in private and non-private sector risk management. Linda shared her experience as a project manager and Director of Operations at Bechtel Corporation. Other roles Linda served at Bechtel include corporate risk manager for a global business unit and project risk manager. Linda currently works at L3 Management Innovations and draws upon her years of professional experience in this area to share with the group.
Robert E. Scott, Jr., partner at Wilson, Elser, Moskowitz, Edelman & Dicker, LLP. Robert handles litigation on insurance coverage, drug and medical devices and many other areas. Robert shared his expertise on crisis management and his insights on planning ahead to control future crises.
Sam Terzich, Gallagher Bassett. Sam is a current director of the company and manages specialty claims including product liability, cyber, environmental, pollution and product recall. Sam has been in the claims industry for 25 years and will address the insurance issues that arise during a company crisis.
Marisa Trasatti, Esquire, partner at Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, and also General Counsel to Sciton, Inc. Marisa is the moderator of the Top Ten Tips to Manage a Crisis. Marisa shares her unique experiences of managing a crisis as General Counsel for Sciton along with valuable lessons learned as counsel for an organization in the midst of a crisis. Marisa’s practice focuses primarily on civil litigation, with an emphasis on product liability litigation, including cases involving drugs and medical devices. She is a past president of Maryland Defense Counsel and served as the DRI Maryland State Representative.