Data is Drawing the Lines in the Art of Crisis Management

by K&L Gates LLP

K&L Gates LLP

Is the world in the midst of a crisis? It seems newspapers and rolling TV news channels are a constant stream of natural disasters or human crises. But are they getting worse? A study from The Economist shows that weather-related disasters have been steadily increasing for the last century, but that the number of people dying from them is decreasing. Much of this can be attributed to improved construction and safety measures, but we must also consider the changing ways in which we now communicate and share information relating to pending or active crises. Especially in today’s socially driven digital age where we can produce and receive a huge variety of information in real time. In this sense, the way we perceive crises can be, in itself, an existential crisis.

Thanks to technology and social media, the art (and it has become an art) of crisis management is changing in fundamental ways. Read on to get insight from leading industry experts across the social media alerting, crisis management, legal and insurance fields, and learn how the time is now for companies to use data in how they prepare, and act, in a time of crisis.

The blizzard of information: How to tell the sleet from the snow
Good crisis management relies on solid preparation but often with little forewarning when the crisis event, be it a natural disaster or brand issue, takes place. Social media is an essential data set for real time information and, because it’s public, can be very powerful in terms of quickly identifying incidents that could impact your business. Since the formative days of Friendster in 2002, the rise of social media has exploded, and grown in tandem with mobile adoption. There are now 2.8 billion active social users globally, and 2.5 billion of them are on mobile. That’s a lot of noise and accurately identifying the right data can seem like a proverbial needle in a haystack. So how can a company get their house in order and start to prepare for a crisis?

Tim Willis, Director of EMEA Corporate Security at real-time alerting firm Dataminr, notes that accurately getting a handle on publicly available social data is imperative for initial event detection. Social media is fast, and when people witness an event they tweet. These millions of sensors create an instant global sensor network. By leveraging alerting tools, organisations can use social media to their advantage. A quick burst of social activity may indicate a significant event is occuring. By being aware early, businesses can identify if it’s an incident they need to respond to and can be prepared to react or respond accordingly.

Thinking fast in a crisis
There are two key types of crisis management, the sudden flash and the slow burn. The sudden flash could be an earthquake that’s putting your employees or customers at risk. Real time alerts help you identify immediately what is happening, allowing your crisis team to take over - which is critical, especially when minutes can mean lives. A slow burn on the other hand, could be a news story impacting a firm’s corporate reputation that may take a longer time to unfold but is still damaging. In such circumstances a siege mentality often takes hold, but the right tools can give teams the aerial view of the situation when it may feel like the business is being hammered from all sides. By combining speed, context and situational awareness it becomes possible to start using data to learn of events and even mitigate new threats.

No matter the type or scale of a crisis, the dynamics and management remain the same, according to Jake Hernandez, Global Consulting Director at crisis and security advisory experts AnotherDay. When it comes to managing a crisis, the starting point must always be having the most up to date and accurate information available. By extension it is also essential to have the right team in place to manage the situation. They need to be fully trained and prepared to act quickly. Personality plays a key role in this. Your crisis comms team needs to be made up of calm and strong communicators who are able to explain what has happened in a clear and empathic way whilst highlighting how the crisis is being resolved. They must also be good listeners, able to process and make big decisions in the moment. By having the right team in place who have been pre-trained for these types of scenarios, combined with the right data at their fingertips, organisations can better weather a crisis by responding to it in an intelligent, prepared and predictive way.

Insuring against a crisis
When an incident hits it is always essential that firms have one eye on the legal and insurance aspects. Robert Dalling, Special Counsel at law firm K&L Gates, highlights that legal risk should always be addressed at an early stage in a crisis, as a company may be subject to regulatory enforcement or private law actions. A real time view of data, both internally and externally, can help businesses quickly reach an understanding of what’s happened, which in turn will help assess potential liability and plan next steps. This is especially important in an ever evolving regulatory environment where laws differ from one country to another. With such challenges in mind it is invaluable for companies to have early notice of incidents as they unfold.

When a crisis hits the first call many businesses will make will be to their insurer. As such policies need to adapt and flex as the type and frequency of crises evolves. Justin Priestley, Executive Director of crisis management at insurance broker Gallagher, notes that the insurance market is becoming more mature in terms of working with clients to identify what risks could impact them and what policies would best suit their organisational needs. Speaking from experience, Gallagher are at the forefront of new terrorism policy coverage, and are pioneers in cyber policies, a direct reflection of the rise in security crises faced by businesses. Social media data is now the front line and is increasingly playing a role in how insurers and brokers detect insurable events. In the future it may even play a role in paying claims automatically in whole or in part - particularly for smaller enterprises.

No organisation ever wants to be subject to a crisis, but with the right tools and understanding, businesses can respond and recover from one with as minimal impact as possible. Good crisis management has always been driven by foresight, now modern crisis management is being powered by true social insight.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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