I interviewed Steve Gruler who discussed Crisis Management Planning.
Can you first provide a brief background of yourself?
Dustin, I'd be more than happy to do that. Thank you for the opportunity to discuss crisis management preparedness today. I don't know how brief that can be. I've had a pretty long career. I have enjoyed over 30+ years within consumer products companiesin manufacturing and senior management. .
I came out of college with degrees in analytical chemistry, went to work with Quaker Oats as a , quality assurance supervisor. I finished my career with Quaker as the QA manager of the world’s largest oat and cereal mill.
I learned a lot about operations by being on the shop floor and managing quality assurance operations. My eight years with Quaker was a great learning experience and set a solid foundation for me on regulatory compliance and what it takes to ensure deliverance of high quality product.
From there I went to the Clorox Company in California, I was with them for about 10 years. The majority of that time, I was the global head of quality. At that time Clorox was a $ 5.3 billion international consumer products company, with a wide variety of products. You could go in any aisle in a grocery store, and you would find a Clorox product that was either number one in its category or number two or both. Product ranged from Clorox bleach to Liquid Plumber to auto armor tire care and cleaning materials to combat insecticides to Hidden Valley Ranch Dressing to KC Masterpiece barbeque sauce, Glad bags, etc., etc., etc.
My years at Clorox were the most formative of my career and where I formulated my strong beliefs on the need of a risk based predictive quality management system. It became obvious that the widely accepted approach of compliance to global standards and certifications are lacking in true brand protection. With the support of a very enlightened senior management team we transformed the company’s culture to a pragmatic risk based predictive and preventative system. This transformation delivered outstanding results such as significant reductions in brand risk, manufacturing waste and cost of goods. Clorox is where I realized the critical natural and key role of the Quality organization is to implement a proactively brand risk based quality system managed with clear predictive data. Additionally, developing and ensuring the company is well prepared to protect it’s brand with a well-designed crisis management plan.
From there, I had a couple other stints with some other companies. One company was a bottling molding company providing plastic bottles for many branded companies.I was the corporate head of quality responsible for 51 manufacturing facilities
I finished my corporate career with Gerber as global head of quality, Gerber product lines included baby food, medical devices and clothing. I gained a lot of experience around the globe, a lot in Asia and Europe with Gerber, and in South America with Clorox.
I founded Global Quality Consulting (GQC) in 2004. We (GQC)isa full-service crisis management, product safety, and regulatory compliance consultancy company. We help companies of all industries and size to pragmatically identify, manage, and mitigate critical risk to their brand and reputation. We gained exceptional experience as the retained crisis management consultants to a Lloyds of London insurance syndicate. We have had the honor of working with outstanding companies of all sizes and all categories and sectors in proactive risk mitigation globally
Our primarily role is to provide an outside in look and peel the risk onion for the c-suite. We perform comprehensives risk assessments, planning, helping companies build crisis management plans. We help them focus on how to identify manage and mitigate risk to their brand.
Our business model is to provide a network of senior-level consultants, which have held senior management positions of accountability and authority within the public and/or the private sector to our clients. They range from regulatory, microbiologists, toxicologists, crisis communications firms, both internal to the U.S. and global, and customer service representatives, call center expansion support during a crisis. We have an extremely strong and experienced multi-functional team. It's a unique business model, having such high level senior professionals positioned to pick up the phone at a moment’s notice and help you thru a crisis.
That's fundamentally the background about my company and me.
From your experience, do most companies you talk to, are they well prepared to handle a crisis environment?
The direct answer is the majority of them are not. They arenot well prepared to effectively respond to a brand-crippling crisis.One thing that has changed over the years is social media capabilities, which has really increased the critical need for a solid crisis management plan.The warp speed of social media puts the unprepared back on their heels on how to handle the crisis in today's social media and multi-media. Prepared companies are poised to get out in front and lead messaging instead of responding, defending and fighting the negative messaging.
It's interesting. If you look at crisis management planning, there's two key phases that you undertake when responding to the crisis. One is immediate response. In other words, you've got to stop the bleeding and get operations under control. Those with a well defined and practiced plan handles this portion far better than those that don't. The 2nd phase is recovery, where you bring the business back to its norm as quickly as you can. Crisis management plans should integrate these together.
What are some of the top one or two things that need to be in place to be effective? What should companies be doing with their plans?
The most important key to successful managing a crisis is being prepared, which means having a well-developed plan that is practiced periodically.
Crisis Management Planning should take holistic approach and cover all potential perils to a company. The best plans I have seen, include multi level cross functions teams providing great alignment of strategic thinkers, tactical planners, and operational doers with clear roles and responsibilities. The top elements of a plan includes:
1. Control of Information flow into and within the company (How does critical information get to the right person quickly?)
2. Rapid Determination of Scope and Severity of an Issue (Do I have a problem? If so, how big is it and how much damage can it cause?)
3. What immediate steps must be taken to control or mitigate the damage (How do I get out in front of this thing?)
4. Decision Making Process (Who has the absolute authority to make the key critical decisions?) Is this clear to the organization?
5. Execution of the plan (Who does what, when and where?)
6. The process to keep the system current (How do you keep the company trained and skilled at what they need to do?)Practice !!!
We have found the most effective plans are well aligned with the company’s culture and organizational capabilities. Mostorganizations do not have the totality of capably in house and should include professional external services into their plan.
Internally the core plan typically have three different levels that. Smaller companies typically have two layers, because there's not a sharp line in responsibility between executive team and the middle management team.
The three levels are the executive team, issues management team or the middle management team, and the business recovery team, the boots on the ground in many of these facilities, the doers.
Each team has clear interdependent and overlapping roles and responsibilities.
Do you have any final recommendations for companies that want to build a solid crisis management plan?
Yes I do. When building their plan, reachto experts in the field, people that do this daily, people that have long experience, people that have been there done that.
Secondly, periodically pressure tests your plan. I’m talking about a simulation that involves all elements of the plan, not just the annual mock recall.
I do want to share the results of a study done in Oxford in the UK probably 10 to 15 years ago,for it outlines with data the key element to successfully recovering your brand from crisis. This study looked at the impact of a crisis on a company's value, in other words, their stock price. They looked at many different incidents, including things like plane crashes, severe food poisoning, recalls, etc., etc., etc.
They plotted the stock price over time. All companies stock price droppedimmediately when the crisis hit, they fell anywhere between 15 to 30%. Over time, a period of 3 to 6 months what they saw was quite fascinating. There were two clear and distinct lines formed.
One line came back up to the initial price point before the incident and kept growing like a normal healthy business. The other line stayed below that 15 to 30% and never recovered.
They came to the conclusion that it wasn't the issue or the crisis that happened, but it was how the company responded. How did they respond? How prepared were they? And you can see that in evidence since then that supports that. If you look at Tylenol issue in the U.S. Has been one that's been renowned as the best way to do. It's taught in all the business schools. It's a case study. They did it right. They responded right, and they recovered well. There are quite a few other examples around the globe. Maple Leaf Foods in Canada was one that was managed extremely well. So the conclusion is to be prepared with a solid, proactive, pragmatic crisis management program.
Thanks, Steve, for sharing today.
My pleasure. Wish you the best, and hope to talk to you again soon.
About Steve Gruler
President and CEO of Global Quality Consulting, Inc.