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Estimating the "Impact Value" of
a Crisis
By Dan Paulk, Crisis Management International
"From a tiny spark comes a great conflagration."
Ben Sirach, Ecclesiasticus
What would be the effect of a "worst
case scenario" if it occurred at your work facility (any kind of
disaster or calamity)? It is important to try and calculate the "impact
value" of a crisis because that will tell you how damaging a "critical
incident" will be if there is no crisis intervention
What kind of news coverage might ensue?
What kind of agencies might get involved? OSHA? EPA?
How would stockholders react?
What about senior management’s evaluation?
On a scale of 1 to 10, how much scrutiny would your
crisis incur?
- effect on employee morale/productivity
How would the crisis affect employee productivity?
Absenteeism?
How much time might be spent dealing with the crisis at the expense
of other work/business functions?
What about employee morale during this time? Stress? Outrage?
On a scale of 1 to 10, estimate the amount of business
interference the crisis might generate:
- the company’s public image
How will the public view the crisis and your handling
of it?
Will the company be seen as culpable? Liable?
What about customers’ reactions?
Community reaction?
Employees’ family reactions?
On a scale of 1 to 10, estimate the potential damage
to company image/reputation in the aftermath of the crisis:
- damage to the company’s
bottom line
Concerning "hard" dollars, what might
be the cost to the company?
How much would be covered by insurance?
Concerning "soft" dollars, what will employee unrest, stress,
absenteeism, lowered morale and lowered productivity cost the company?
How would it affect the company’s ability to get product to market
on time? Meet payroll? Pay creditors?
What about the costs of increased workers’ comp claims?
Unemployment insurance claims?
Combining hard and soft dollar cost together, what
is your opinion (1 to 10) of the cost of the crisis?
- legal liability/vulnerability
Was this incident "foreseeable"?
If so, did we take enough reasonable precautions to prevent such a
calamity?
Did we have any specific controls or policies in place meant to prevent
such a crisis?
Is there any "discoverable" information regarding this incident
that could be interpreted in a "damning" way by outsiders?
Would an aggressive plaintiff attorney "smell" an opportunity
here?
Considering the potential degree of legal liability,
what is your estimate, on a scale of 1 to 10, of legal vulnerability
regarding this incident?
IMPACT VALUE OF THE CRISIS= Total of 5 scores ¸ 5
=____________
This concept and these questions are based upon
the thinking and research of Steven Fink, Crisis Management: Planning
for The Inevitable, American Management Association, New York, 1986.
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