So You’re Planning to Fail Your Next Retail Crisis

retail crisis

Is your organization planning to fail, or only failing to plan for your next retail crisis? Most organizations would emphatically state that they are not planning to fail; however, as this post will illustrate, if the organization is failing to prepare for a crisis, then the outcome could well be the same.

Planning for a retail crisis isn’t about the doomsday scenario but about ensuring organizations seize the opportunity presented and create a more resilient body—one that is responsive, alert to future challenges, and able to deliver to customers and stakeholders and to meet shareholder expectations.

There are ten critical aspects relating to retail crisis management:

- Sponsor -

1. Sponsorship—senior executive engagement is critical to a successful crisis program.
2. Definition—define the crisis, what it means, and how the organization should respond.
3. Training—train people because crisis leadership is not innate. Most leaders have tried to avoid it, so many will have limited experience.
4. Leadership—leadership must be with ownership and humanity; so too must the communications (both internally and externally).
5. Clarity—assigning roles and responsibilities is critical.
6. Assessment—assess the situation, information, thoughts, actions, and communication.
7. Protection—protect your people, brand, and reputation.
8. Response—respond consistently and at the speed of the incident, not that of the organization.
9. Recovery—recover as quickly as possible in line with the recovery time objectives.
10. Debrief—learn and improve to be ready for next time.

These aspects were confirmed and underlined across numerous industries during a recent panel discussion I moderated covering crisis management and communications. The debate considered the impact of current high-profile operational incidents, terrorism, and cyber-attacks, and how organizations could best prepare and respond to the ever-changing risk and threat landscape.

They are also in line with a recent industry survey where 46 percent identified lack of senior management buy-in and support as the most significant challenge to efficiently preparing their organizations for a crisis.

Buy In

Without support at a level that is senior enough and from an individual who has both the motivation and the political capital to support the project, it is unlikely to succeed. Articulating the benefits to stakeholders of a comprehensive program, including horizon scanning and exercising, is vital to gaining buy-in and engagement. Commonly realized gains include increased efficiency and cost savings through avoiding or pre-preparing for incidents, better cross-functional working, greater empowerment, and motivation of staff.

Crisis? What Crisis?

One may think that defining this would be a relatively simple task. Anyone dealing with either business continuity management or crisis management in a corporate environment has probably come across statements such as “We handle crises every day” or “I will know it when I see it.”

We’ve seen many high-profile examples of crisis management in action recently. What becomes apparent is the response of those well drilled in crisis response, usually displaying slick actions, being efficient, and instilling confidence in those around them. What is equally clear is the response from those whose crisis management protocols fall short of expected standards. One has only to look at the 2017 case studies of British Airways or United Airlines and their respective crisis communications as examples negatively affecting both brand reputation and shareholder value.

One dictionary meaning of crisis is a “time when a difficult or important decision must be made; the situation has reached crisis point.” This definition primarily revolves around what constitutes a crisis and what sets it apart from a routine emergency. An element of pre-planning and mitigation can usually be put in place in relation to a routine emergency, due to the likelihood or predictability of that scenario occurring. Although still challenging, routine means some element of predictability allowing for advanced preparation.

One could see a crisis as being at the edges of a storm; you can be so busy dealing with the initial effects that you do not stand back to see the whole picture, revealing that you are just in the eye of the storm. If you don’t stand back, how do you know you have reached and dealt with the end of the crisis?

We should be mindful that what is a crisis for one industry could well be business as usual for another. Having people in harm’s way is what news media do regularly, but for the majority of businesses, this could indicate a crisis. Equally, what looks like a crisis for one department may not even raise pulses in another. Therefore, a formal, aligned, and agreed definition adequately documented within company policy is vital.

Preparation: Team Structure, Roles and Responsibilities, and Exercise

Those slick teams mentioned previously didn’t get that way by accident. They prepared—a lot. In addition to their knowledge on processes and operations, members knew their roles and responsibilities. Without this forethought, dealing with even routine emergencies can be unnecessarily challenging.

Practice, Practice, Practice

Crises can affect retail both directly and indirectly as we have seen from instances as wide-ranging as terrorism, natural disasters, and operational emergencies. Many people, myself included, have dealt with those types of scenarios in a corporate environment; however, others across different parts of your organization will not have, and even those experienced in each retail crisis type will acknowledge that seemingly similar crises present various new and unique challenges.

Some skills are learned; others are innate. Crisis management and the teamwork needed for a successful outcome require practice, and that means testing the process together. It is critical that people understand their roles and responsibilities but are also ready to get involved with other requirements that might not be immediately apparent other than in a crisis or during an exercise, such as how to prepare people for the unexpected. One cannot know if the organization is resilient until it is tested.

Desktop exercises allow any flaws in the plan, documentation, or existing business processes to be understood while the opportunity to rectify them is there. Having facilitated exercises where the person responsible for the documentation is “100 percent certain” it is up to date, only to find incorrect phone numbers, or that someone left the business a year ago, is humorous during an exercise but not funny when lives or the company are at stake.

Responsibilities, Roles, and Clarity

Keeping the strategic core team small enough to be efficient in decision-making and broad enough to cover core business is an important step. People or departments not included initially can be brought in as required. Defining who is responsible overall at strategic, tactical, and operational levels (also often referred to as gold, silver, and bronze levels) should usually follow existing departmental and organizational lines, with precise definitions of relevant considerations being outlined per department. Pre-defining this also saves time during any incident.

Assessing the Crisis

A mnemonic I use is SITAC:

  • Situation. What’s happened? Where? Who’s involved? Who’s nearby? Can we account for our team?
  • Information. What do we know? What don’t we know? How will we fill in the blanks? You will rarely have all the facts.
  • Thoughts. Include the strategic, tactical, and operational teams (both within the organization and external advisors such as the emergency services).
  • Actions. What do we need to decide? What do we need to act on? By when? By whom?
  • Communications. How often? To whom? Consider both internal and external stakeholders. What and when will we communicate to different populations?

Everything must be documented comprehensively; it may be required post-event for internal organizational debriefs or legal or regulatory actions.

Organizations should review pre-scheduled marketing communications that are due to go out via social media. Such communications are often a source of embarrassment, when what had been perfectly acceptable becomes unacceptable due to a specific crisis topic. British Airways, United Airlines, and GCHQ have all fallen foul of this during a crisis.

Protection

People, brand, and reputation are among the most vital aspects to consider relating to both crises and routine emergencies. People (from employees to the public) have to be at the heart of all discussions and decisions.

Response

Any response must always be at the speed of the incident and not at the speed of the organization. Some organizations will need to become quicker at decision-making, while others will be required to pause and ensure they have adequate information and have considered the situation. Social media will often accelerate that speed particularly in relation to PR and communications.

Recover

If adequate planning has occurred before any crisis, priorities will be understood across the business, enabling responses that match with and are focused on recovery time objectives.

Debrief

How do you improve if you don’t identify what went well and what needs improvement? Remember those slick teams I mentioned? Debriefing is fundamental to their success. Make it an essential part of your retail crisis team’s success.

This article was originally published in LP Magazine Europe in 2017 and was updated August 21, 2018.

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