Speaker 1: It's 2 a.m. and your phone rings. You're the head of a well-known organic foods empire. On the phone is a senior VP telling you that there's video footage of your chief marketing officer making racist and anti-immigrant comments, and it's gone viral. The phones are ringing off the hook from angry investors, sponsors, and customers. It's 6 a.m. and you get a text message. You're the CEO of a multinational pharmaceutical company, and reports of widespread tampering in one of your products. Dozens of people have been hospitalized. What do these two situations have in common? The answer may not be what you think. Both companies and the people who run them have a crisis on their hands, a crisis that can cost millions of dollars, lost jobs, and irreparably damaged reputations. But these companies have another, more fundamental thing in common. They never thought it could happen to them. Denial is the single factor responsible for the overwhelming majority of crises. It's not whether or not your company will face a crisis. It's how, when, and why. At the root of every crisis are critical core assumptions that, if left unchallenged, set the stage for crises. Assumptions like, we're strong enough to handle any negative publicity. Or, our employees are loyal. They'd never sabotage us. Even if something bad happens, legal and PR are strong enough to protect us. There is no need for prior preparation. We can react to anything bad that hits us. The thing about a crisis is that, while it seems like a single event, it's not. No crisis ever happens in isolation. Instead, every crisis is part of a chain reaction or sets off a chain reaction of other crises. In other words, crises are systemic. You can't just point to one person or one single or simple cause. It's the whole system. Which means that the solution has to be systemic too. What can your company do? Two things. You need to identify the things that are creating conditions where crises can happen. And you need to proactively form a diverse crisis portfolio. Just as an investor would be foolish to count on one investment or one investment strategy, companies who rely on only one strategy to prevent or cope with a single crisis are extremely vulnerable. They are leaving themselves open to disaster. So, what is a diverse crisis portfolio? Well, it's different for every company. Preparing for a wide array of crises. Picking up early warning signals. Auditing corporate culture. Challenging key assumptions. Building and testing damage control mechanisms. Building and testing actual crisis management capabilities. Forming a well-trained crisis management team. And, of course, thinking and acting systemically. It's now 10 a.m. in the morning, the day that the crises hit. The organic company CEO and pharmaceutical company CEO are both giving press conferences. The organic foods CEO is blaming the media for blowing the event out of proportion and denying that their CMO ever said racist and anti-immigrant comments. The CEO of the pharma company has already issued a widespread product recall, pulled millions of bottles of the medication off shelves worldwide, vowed to find out who sabotaged the products and prosecute them to the fullest extent of the law and make changes so that it never happens again. You may think that proactive crisis management is expensive and will hurt your company's bottom line. That's another assumption that needs to be challenged. Research actually shows that crisis management is not only the right thing to do for your employees and customers, but it's good for business. Consider. Our organic foods company took a major hit, lost millions of dollars in sponsorships and had irreparable damage to its reputation and its stock value. Our pharmaceutical company came out of the crisis stronger than ever. Sales of the newly designed protective seal packaging skyrocketed and the company was perceived as caring more about people than profits. What crisis will your company face? Cyberterrorism? Workplace violence? Financial irregularities? A natural disaster? Ethical transgressions? Something else? How ready are you to handle it? To ensure that it gets done, crisis management needs to be embedded seamlessly in at least one program that the organization takes seriously, such as environmentalism or quality control. This helps ensure that it will be done as part of everyday business. Dr. Ian I. Mitroff is an internationally recognized crisis expert. He is generally regarded as one of the fathers of modern crisis management. Mitroff Crisis Management's approach is based on over 30 years of research and consulting. Mitroff has published over 10 books on crisis management. He is an acknowledged leader in the field. Don't wait for that middle-of-the-night phone call. Become crisis prepared.