Crisis management crisis

Crisis planning is a ‘now’ thing

The Malaysian Airlines disaster is another reminder of the need for sound crisis management planning.

The communities’ ‘need to know’ always puts to the test the effectiveness of a company’s crisis plan, its construction and its people, in managing their roles and responsibilities.

Closer to home, the Morwell coal fire is another example of the importance of crisis plans in addressing the ‘need to know’ element.

The big question with both of these is when a crisis hits, is responding quickly always the best move?

In any crisis plan, the operational and logistical aspects are generally well understood and implemented without too many issues. However, the communication aspects always encounter problems.

This is understandable because all too often the ‘need to know’ cannot be easily provided to the full extent and urgency of the media and the community. There are often just too many variables to be covered off, counter checked and reviewed before they get into the public’s hands.

Therefore, jumping too early into the public arena with information addressing the ‘need to know’ can be fraught with problems. Unfortunately, leaving it too late lets the media, and to a lesser extent the community, fill the information gap with a stream of endless speculation and commentary that further confuses the real situation.

This is not to say that companies should avoid telling the media and the public what they know as quickly as possible. All companies and governments today seek to work to this principle if they want to maintain their reputation. It is the timing and the accuracy of the information that are the variables – and the ones that can harm reputations.

In Malaysian Airlines case, the ‘need to know’ what happened to the plane is still being urgently sought. When this is determined, there is a stream of other need to know questions to be answered.

In Morwell’s case, the community’s ‘need to know’ on the health issues was the big question. Government communication showed that it had set up a respite centre, told people to stay indoors and to seek medical help with any health issues. However, this was overtaken by the ‘need to know’ if some residents should be evacuated.

These are all legitimate questions and are an important part of the ‘forward planning’ process of any crisis plan.

The ability and capability of people working on a crisis to address possible future issues in a timely and efficient manner when still addressing the actual crisis itself are extremely important. This is not only for the reputation of an organisation, but also for the public’s perception of the organisation and its people being seen as capable managers of the crisis itself.

The two latest crises provide salient lessons for all business and government. Crisis planning must never be neglected, or left for too long without processes being tested.

RM

Australian Flag

Joe Hockey and the GrainCorp Prohibition

Federal Treasurer Joe Hockey has been universally flagellated for prohibiting the acquisition of GrainCorp by US-based Archer Daniels Midland (ADM) Company.

The criticism is grossly unfair. It is also politically and commercially myopic.

Australia is a huge country with substantial resources and  a small population. Sometimes we need to protect strategically placed companies and industries. We shouldn’t resile from that even if it offends the sensibilities of a bunch of doctrinaire economists or point-scoring politicians or the vested interests at the top end of town.

It’s not as though this problem is unique to Australia. If, for example, some of our largest banks were to put a consortium together to bid for the Bank of China does anybody seriously think the Chinese Government would entertain that sort of deal?

There have been precedents for the GrainCorp prohibition. In 2001, then Federal Treasurer Peter Costello stopped Shell from taking control of Woodside.

The boot was on the other foot in 2010 when the Canadian Government stopped BHP Billiton from taking control of the Potash Corporation of Saskatchewan, the world’s largest fertiliser manufacturer.

Claims that the GrainCorp prohibition sends adverse messages to potential overseas investments ring hollow when one looks back at the Shell-Woodside prohibition. Since then, there has been a tsunami of foreign capital into Australia. A prominent participant in that wave of foreign investment has been Shell itself.

The truth is, foreign investors owe us nothing. Our interests are not necessarily aligned. They work to different agendas and very different timeframes.

As an example of the timeframe issue, it is not uncommon for foreign oil companies to find a commercially viable natural gas field in Australian waters and then decide not to bother developing it for many years because it suits their global scheduling program.

This is clearly contrary to Australia’s interests: we would want the gas field developed and commercialised as quickly as possible. Our only defence against this conflict is to put a time limit on the tenure of the leases; so use it or lose it.

As for different agendas, quite some years ago, the Australian subsidiary of a substantial British-based chemicals group split from its UK parent. One of the key reasons was said to be conflicting agendas. The Australian subsidiary apparently wanted to expand into Asia but it was over-ruled by the British parent which had decided to tackle Asia in a different way.

Dealing specifically with GrainCorp, there is a widely held view that GrainCorp needs access to substantial funds to carry out expansion and development programs. This is an entirely separate issue from the acquisition itself. There are many alternative ways for GrainCorp to gain access to broader funding. That can be fixed within Australia with no help from ADM.

In addition, ADM has a range of other options available to it for involving itself in the Australian grain industry. For example, it could joint venture with GrainCorp (and other companies) on a range of business opportunities.

There is no doubt that, to reach its full potential, the Australian agribusiness sector needs massive investment and a lot of that funding will have to come from overseas. But allowing foreign interests to take over strategically placed Australian companies and assets may not be the only nor the best way to address the problem.

Waving the ADM acquisition through would have given the US group access to perhaps the most vertically integrated agribusiness in Australia. It would have controlled most of Australia’s grain storage and handling facilities and all but two of the bulk port terminals in the eastern states.

It would also have obtained substantial interests in Australian flourmilling, oilseed processing and refining, and malt production.

And what of ADM itself? If a foreign company wants to take over a strategically positioned Australian company, then its own credentials and track record should be closely scrutinised.

In fact, ADM has had what one observer described as a “troubled history of price-fixing”. If there is substance to this claim, that could have represented a major risk for the Australian grain industry – not today, but several years down the track after any acquisition.

Companies that are in a position to dominate markets eventually succumb to the temptation to raise process and extract monopoly rents.

And when that happens, what do we do?

Joe Hockey may well have been right. Foreign investors might not like knockbacks like Woodside and GrainCorp, but as long as they know the rules they will keep investing in Australia.

GO

ICG Auto

RMKA Auto tailors solutions for the vehicle industry

Automotive Public Relations by RMKA

The pace of day-to-day business in a dynamic sector such as automotive shows every sign of continuing to increase.

Add to this the tough and competitive nature of the Australian market and it is easy to see why many companies in the automotive sector carry limited specialist resources.

RMKA has identified a need for highly experienced key support services, both strategic and operational, to assist companies operating at all levels of the automotive industry.

The result is the creation of a suite of services that harnesses RMKA’s indepth history and extensive knowledge in automotive communication, and focuses these skills with the benefit of an equally comprehensive experience-base in the automotive business.

RMKA has identified key areas of support where the consultancy can add value by addressing specific communication, marketing and research needs.

RMKA Auto has been created to make it easier for executives in the automotive industry to match their needs to the skills and services that RMKA can bring in helping to meet business objectives.

VicRoads waits for the horse to bolt?

By John Kananghinis

The recent tragic accident involving an out-of-control fuel tanker in Sydney and resulting in two deaths appears to have spurred some alarming claims by VicRoads.

Inspections of the remainder of the truck company’s fleet have resulted in over 90 groundings. This raises the question as to why these trucks were on the road in the first place if regular inspections were carried out by VicRoads? There is now an obvious communication issue for VicRoads, as well as for  the company.

As for the trucking company, Cootes, there has been little word from them in any of the media reporting of the tragedy.

This again highlights the need for all types of organisations to have a thorough risk assessment and issues management process, as well as a supporting crisis communication plan. These processes become all the more relevant within organisations with such high levels of exposure.

Even without such extreme risks as this incident has exposed, operating without such disciplines is “brave” indeed where there is any possibility of individual or community harm.

JK