WHAT CRISIS?
CRISIS management may sound like just the latest piece of jargon, but this relatively new discipline is fast becoming a familiar term.
Faced with a climate of increasing violence and attacks, which seem as indiscriminate as senseless, no business can afford to adopt an "it won't happen to me" approach. The Management of Health & Safety at Work Regulations 1992 have forced a duty of care on employers towards staff and the public who are allowed access to their premises. The need for contingency planning is real.
The principle of planning for all eventualities applies as much to small businesses as to large organisations. Although independent hoteliers and restaurateurs may not be obvious targets for terrorist bombs, they are just as vulnerable to violent attack or to becoming victims of natural disasters.
Few businesses would consider operating without the protection of some kind of insurance policy, yet having a crisis management plan is of equal importance. It is often regarded as a luxury, however. Exact figures are hard to come by, but crisis management consultants estimate that as few as 20% of top UK firms have an adequate crisis plan in place.
The recession has undoubtedly influenced this apparent lack of interest, as Chris Woodcock, director of consultancy Countrywide Communications, confirms: "During a recession, crisis and issues management is one ofthose management disciplines thatfalls to the bottom of the pile. Independent restaurateurs and hoteliers, like managers of many other businesses, would be well advised to at least ensure they have a workable crisis plan in place.
"The last thing you need when you are struggling to sustain your business is an unexpected incident to throw you into panic and confusion," she says.
In the hospitality industry this is particularly relevant. If your business is accused of causing a bout of food poisoning then nothing less than your entire reputation is at stake. Soeffective paths of communication are essential to maintain staff moraleand restore confidence in your operation.
Holiday Inn maintains a textbook approach to crisis management. Following the example set by its US division, it has distributed a 70-page manual to all its hotels in Europe, Middle East and Africa.
The document categorises crises under the headings of general problems such as lift and electrical failures; natural disasters such as floods and gales; third-party events such as bombs and assaults; and major disasters such as explosions or structural collapse.
Each incident is dealt with along the following lines:
lWhat are the first priorities?
lWhat is the procedure?
lTo whom should it be reported?
lOther suggestions to handle it.
Leslie Ritson, Holiday Inn area director for the UK and former chairman of the company's crisis management committee, anticipates that many crises will be dealt with locally.
But if the crisis gets out of hand, or attracts an unexpected wave of publicity, a senior management team based in Brussels will take over. So far this has not happened, but, to avoid complacency, regular training sessions are carried out.
Anticipating a threat to business means looking ahead to cover all eventualities, regardless of how implausible they may seem.
In July 1991, Rosemary Walker, director of Edinburgh-based consultancy Playfair Walker, unwittingly predicted catastrophe when she gave a presentation on crisis management to hoteliers and tourism representatives on the Shetland Islands.
Along with problems arising from fire, theft, food poisoning, a plague of algae, freak weather and a plane crash, Walker warned those assembled of a possible crisis emanating from the oil industry.
"Just because Shetland is remote and only has two radio stations and one local newspaper doesn't mean to say that it couldn't become the focus of world attention," she said.
Some 18 months later her words came horrifyingly true.
Shetland Islands hotelier Robert Smith, proprietor of the 35-bedroom Lerwick Hotel, Lerwick, admits that he could never have anticipated the oil spill from the Braer tanker which, in January 1993, turned the tranquil group of islands into a centre of media attention.
The spill is estimated to have brought in some £600m-worth of losses through bad publicity. For Smith the incident was, somewhat ironically,the catalyst for increased business at what was traditionally a quiet time of year.
"Our rooms were full for some time, initially with journalists and then with people carrying out official enquiries," he recalls.
Playfair Walker was drafted in to mastermind Operation Aurora, a damage-limitation plan which, because of the lack of any immediate compensation payments, was carried out on a shoe-string budget.
Once the initial furore was over, official figures revealed longer-lasting damage. Even taking into account the increased January figures, tourism during 1993 was down by about 20% over the 1992 figure.
Despite this disappointment hoteliers believe that, without a contingency plan, damage to tourism could have been a lot worse.
Smith has only been a hotelier for five years; he did not experience a decrease in business, but turnover was increased by only around 5% instead of an anticipated 20%.
Bob Walker, general manager of the 64-bedroom Shetland hotel inLerwick, the islands' largest hotel, reports revenue down by about 10%over the previous year and anticipates it will be 1995 or 1996 before it is business as usual.
Despite the lesson of the Shetlands, tankers such as the Braer continue to use the waters surrounding the islands. Shetlanders are lobbying the Government to create an exclusion zone but without success to date.
Bob Walker admits that he is nervous of a recurrence: "There's nothing in place to prevent this happening again. No one could have planned for this situation."
CRACKS
Businesses which have suffered an unexpected crisis testify to the wariness which the incident instills in them.
"I am neurotic about cracks now," confesses Joan Turner, chairman of English Rose Hotels, which until last June included the Scarborough-based Holbeck Hall.
With no visible cracks, Turner says she could never have anticipated the hotel's sudden and dramatic slide into the sea as a result of a coastal landslip.
"It was totally unexpected. The slide could have started in the middle of the night but the first we knew about it was around six in the morning when there was suddenly only two or three yards between the hotel and the cliff," recalls Turner.
Management carried out an evacuation and no one was hurt. But the memories of the incident linger in Turner's mind. "I am very wary now, and try to anticipate every eventuality for insurance purposes."
Turner is still looking for a replacement for Holbeck Hall - a search which, as a consequence of the incident, is based on strict criteria.
"I now consider factors such as lorry reverberation from a main road which could cause cracks, and how close a property is to a coal mine."
Although she accepts that the Holbeck landslip was a freak accident, Turner has stepped up plans in the group's six other hotels, just in case. Night porters now carry out hourly inspections of all premises anticipating potential problems.
Recognising and planning ahead to prevent problems is an essential part of contingency planning.
Rosemary Walker defines a crisis as an incident which can cause damage in the following forms:
lTo people, as in an air crash, fire, explosion, food poisoning.
lTo property, a building, hotel, facilities.
lTo the environment, pollution, acid rain, oil spill, sewage.
lLess tangibly to reputation, confidence, credibility.
One way to establish a crisis plan is to bring in an outside consultancy to audit all aspects of your business and record these in a written report. Costs vary according to consultancy but the price of a week's specialist help including a written report is estimated at £5,000.
For caterers who do not have this sort of sum to spare there may be cheaper solutions.
The services of crime prevention officers, for example, are free. It may be possible to arrange for a local crime prevention officer to come and talk to your staff and increase their awareness of potential problems.
"Crisis preparedness doesn't have to cost a lot," says Countrywide Communications' Woodcock. "It is essentially a matter of careful planning and lateral thinking."
Woodcock offers the following inexpensive precautions hoteliers or restaurateurs can take to ensure they are ready to act if the media or customers suddenly start to take an interest for all the wrong reasons.
The first measure is to establish a crisis team. Consider the following: who will join forces in time of trouble? Does this group cover the main functions of the business? Are their personalities suitable? Will theybe calm under pressure, decisive, articulate and sympathetic?
She also recommends designating a crisis room. You need somewhere to congregate in time of emergency. The team should make for this venue when disaster strikes. It should have at least a telephone and a fax.
Identifying areas of exposure to risk is also important. Are there aspects of your business which leave you exposed? Are you in a high crime area or are there any difficult staff issues? Could a building project or structural defect cause any problems?
Anticipating the worst often means that you can rectify defects and areas of vulnerability before they develop into major threats.
It is useful to prepare emergency contact lists and regularly update them. You will need 24-hour contact details for any essential senior and specialist staff as well as lists for the local emergency services, the local authorities, any relevant pressure groups, politicians, professional bodies, key suppliers and customers.
Having done all the above, you need to collate the information. This will amount to producing a manual, but it need not be a hefty tome.
For most independent hoteliers and restaurateurs, a ring binder can hold essential information backed by notices with outline procedures displayed in reception or an office area.
Finally, training your staff is essential. It doesn't matter how many you have, they all need to know what to do, who's in charge, where to meet, the pitfalls, and so on.
All new staff should have crisis management training during their induction programme. Depending on your level of vulnerability and staff numbers, regular crisis simulations are also an excellent idea as well as being good for team building.o
lNext week: Dealing with bomb threats.
