Risk: Are You Prepared?

Beyond safety: why you need a crisis management plan for your construction business.

Sometimes, bad things happen to good companies. Even with strong safety programs and excellent people, construction is a risky business by nature.

Janine Shea, former owner of construction industry consulting firm The Janine Reid Group, learned this the hard way. In the early 1980s, she worked as the marketing manager for a general contracting firm in Denver when a fatality occurred at the company. After this happened, the owner asked Shea to develop a crisis management protocol to effectively manage any further tragedies. However, her marketing duties took precedence, which did not leave her much time to create this protocol.

Unfortunately, six months later on August 18, 1985, the company had another crisis. “We had a bomb threat at a large project in Albuquerque, and I had no clue what to do,” Shea says. She recommended that the jobsite be evacuated, and she immediately jumped on a plane to New Mexico. In hindsight, she recalls being relieved to have the plane ride to gather her thoughts. “During this time, we had no cell phones, and that was the only thing that saved me—I had some time to think.”

Though the threatening calls continued for four days, the threat had just been a hoax, thankfully. The lesson she relayed to other companies after this event: “Don’t be foolish like I was. It does not feel good.”

Little did she know at the time, these series of events would set in motion her future career focused on changing risk management in the construction industry. At the time, most risk management strategies concentrated primarily on mitigating risks through safety procedures. Shea’s interest in risk management led her to study how other industries manage crises. “I started to piece things together from crisis plans taken from the airline industry.”

Eventually, Shea consulted with 80 or more companies a year, developing crisis management plans and aiding in crisis situations. She also helped companies regain their position after a tragedy and create an employee support system.

“During my 30 years in the industry, I’ve seen crises take down hundreds of major companies,” Shea says. To help contractors become aware of crisis management best practices, she has authored three books and conducted countless training sessions, and now she shares her insights with CBO.

What Is Crisis Management?

Crisis management may sound like an oxymoron. In fact, Shea admits this in her book Crisis Management: Planning and Media Relations for the Design and Construction Industry. However, she concludes that “your chances of managing a crisis increase exponentially with the amount of preparation and planning you do beforehand.”

The first step in crisis management is identifying possible crises that can occur. Taking time to do this means you will not be the one asking yourself, “Why didn’t I see this coming?”

To identify possible situations, you must first understand the definition of a crisis. According to Shea, “It’s immediate—many times it’s a surprise” (for instance, when a crane collapses and results in fatalities). “The most common crisis that contractors face are injuries, which in many cases can be prevented; however, there will always be someone out there who will take a shortcut,” she adds.

While accidents constitute the majority of construction tragedies, a crisis could also be a natural disaster, environmental contamination, labor relations and litigation, among many other possibilities. “I’m talking about a crisis where the lid’s blown off, and you don’t have much time to respond—in the little time you do have to respond, you had better get it right.”

Why Do You Need a Plan?

A plan can help you identify logical steps to take during a high-stress event when decision making is rushed and clear heads do not always prevail. “There are so many components—not just handling the jobsite,” Shea says.

Beyond those obvious reasons, you must work hard to preserve your company’s reputation during a crisis, and being savvy about media relations is the best way to manage this. Doubters should consider the example of former BP Chief Executive Tony Hayward’s PR bungle during the April 2010 Gulf oil spill—remember the fallout from his notorious remark: “I want my life back.”

Shea observed that most contractors do not like publicity, and many don’t have skills in this area. But this excuse will not suffice during a crisis. “The day of being a silent contractor is gone,” she says. You must be savvy enough to position your company in the best possible light in today’s media-driven society in which news of an earthquake reaches the twitterverse before the aftershocks. Because the communication within the first few hours of a crisis is the most important, only contractors with a strategic plan can navigate these choppy waters.

Shea suggests answering this question: Is this crisis making you a victim or a culprit? Of course, it helps if your company has a previous history of good PR. “Build up the deposits in your PR bank,” Shea advises. The bottom line: Learn how to work with the media before you find yourself in a crisis situation.

How Do You Create a Plan?

“Just putting together a plan helps to bring about awareness,” Shea says. Creating a plan is an involved and complex process, but your plan should not be complex. “Make your plan easy enough so that it can be read during a time of crisis. You don’t want to read the plan for half an hour,” Shea says. “Yes, you can have longer contingency plans, but have a quick checklist to cover all the bases for the first few hours of a crisis.”

Having this straightforward plan can give leaders the confidence they need to run the show. “In so many crisis situations, I’ve seen upper management freeze more than anyone,” Shea says. This is why it is important to carefully select a designated crisis management team. “It’s interesting because you can never test how people will react until something happens.”

All subs on the job must also understand the company plan and take their lead from the GC. “The people are the variable. It’s not as simple as saying here’s the plan so you are protected now,” Shea says.

Most importantly, upper management has to embrace the plan and spend time on training. “It has to be championed, and you should do some role play,” she says.

Shea has identified the top 10 steps in an effective crisis management plan:

1. Organize a team, and assign specific areas of responsibility.
2. Prepare your plan, which should include emergency contact lists, project details, crisis contingency procedures, tips for the spokesperson, company fact sheets, key employee biographies and company achievements.
3. Train the spokesperson on the dos and don’ts of dealing with the media.
4. Train field supervisors on what should be done at the jobsite and how to act as a temporary spokesperson when a crisis occurs.
5. Perform systematic crisis planning by conducting an audit to determine which crises will likely affect your company. Then, conduct preventive safety measures to reduce exposure.
6. Keep materials current. Review the crisis management plan quarterly to make sure contact information is current, and also review it after each crisis.
7. Practice your crisis management plan.
8. Create a positive corporate image with your public relations program.
9. Sell crisis management to your employees by educating them about its importance.
10. Keep the plan accessible and in two locations—for instance, at work and at home.

Most crises can be avoided with a good safety program, but your company can truly be proactive by combining this with a strong crisis management plan. Though Shea has retired from her career as a crisis management consultant, her books remain a resource for contractors who want to create a crisis management protocol.

Since the dreadful day of that bomb threat in Albuquerque, Shea has accomplished a great deal. “One thing I’m most proud of is addressing how to take care of employees,” she says. “You don’t want to forget how many people were traumatized, yet life goes on. As an industry, if we can prevent one tragedy, then for goodness sakes, let’s do it.”

Required Reading

Though this article provides some tips for creating a crisis management plan, the actual task at hand is much more complex. “I recommend that you take a template and customize it for your company,” Shea says. In her three crisis management books, Shea has done the work for you. Read these books for more information on developing templates and procedures:

• What to Do When the Sky Starts Falling: A Guide to Emergency Planning for the Construction Industry
• Crisis Management: Planning and Media Relations for the Design and Construction Industry
• Saving Lives!: Proven Methods to Eliminate Jobsite Fatalities

Construction Business Owner, November 2011