In a tumultuous and interconnected business world, the types of crises and emergencies companies can face are manifold. From reputational to legal to operational and beyond, there is no shortage of potential pitfalls for even the most prepared business. Enter crisis management, where firms can deploy a team of experts to help not only mitigate crises as they arise, but even shore up operations to help prevent them in the first place. Sloane Menkes is a Partner with PwC’s Forensics Advisory practice, where she helps oversee PwC’s new Crisis Management Center. Consulting caught up with Menkes to talk about the new era of crisis preparation and how companies can be ready to respond if and when disaster strikes.
Consulting: How did the Crisis Management Center come to be?
Menkes: PwC recognized that crises were happening more frequently with our clients and typically having greater impact. A company or client would find themselves in a crisis and it would spill over into other areas and become even larger. Then they would find themselves in a situation when they’re either responding to or recovering from a crisis and aren’t able to put all the puzzle pieces together. So what we do is either helping our clients prepare for a crisis by making them financially secure or making their financial statements assured, or by creating strength in their human capital leadership. As we looked at the things we do, we said we should also be in a position to help them respond and recover. We’ve been on the respond and recover end of some of the biggest crises you could think of in the U.S. What we do is convene the best of what the firm has to offer in response and recovery mode, but we also bring true crisis practitioners to our clients to help them prepare.
Consulting: What are some of the biggest threats facing companies?
Menkes: When a crisis hits, regardless of what threat has presented itself, they typically spill over into other areas. We’ve actually bucketed them to help our clients think through an un-siloed approach. That may sound backwards, but it helps clients understand the types of threats they may be seeing. We’re helping them take these and evolve them into true, un-siloed crisis plans. It’s those buckets that help our clients think about the different types of threats they may face. It’s that spillover that truly creates crisis in the organization.
Consulting: What should companies do to prepare for crises?
Menkes: Our key advice to our clients as we start to engage with them on the prepare side is to build a crisis plan, make it robust, exercise it and revise it. The reason being is when you get people together that you’re building relationships. Sometimes it’s getting people together who have never sat around a table or virtually exercised something together. Those relationships strengthens the resiliency in the organization so ultimately if they encounter a crisis and their plan survives that reality, they will know when they need to ask for help because either the plan will define when to escalate it or they will understand it based on exercises they’ve done together.
Consulting: What are the first steps to get on the road to shoring up operations?
Menkes: A crisis plan will have a few things in it, defining what is a crisis and what are the triggers you’d use to recognize when you’re in crisis, and define roles and responsibilities. You want to have escalation points. Meaning, do you need to notify your regulators? Involve law enforcement? You also want to have the decision authority defined. Meaning, who is it that is able to make this decision, and who is the backup. We found a lot of plans actually leave this important part out. You get in a crisis, you have a great plan, but you aren’t sure who has the decision authority. Once you’ve defined these key attributes you can focus on communicating and exercising it, getting people together to build those relationships and build those muscles so when a crisis does happen, you’re able to respond.
Consulting: What are the biggest challenges clients are facing on the crisis preparation side?
Menkes: One of the biggest challenges is that the crisis plan might not survive reality. It’s because of that I think more firms are actually using PwC or outside help to exercise their crisis plans or simulate different crisis scenarios. Sometimes that’s industry wide, but it can also be an internal event where the crisis plan is exercised before you go through a crisis scenario together. Also getting help where you need it, that could come in the form of legal assistance, communication assistance, or even knowing who your law enforcement contacts are in case you need to engage them in your crisis response well before a crisis may hit so you’re comfortable with who you may be calling. Our hope is when we’re helping clients respond to a crisis, we’re helping them do that quickly and effectively so they can get to that recover mode emerging stronger than they were before so they can get back to business sooner rather than later, and more effectively.