Roads to Resilience

management mode. We had all of our plans, we were relatively well prepared. We started implementing a series of actions which felt intuitive. What I found interesting was that we found ourselves teaching the neighbouring international hotels our methods and our practices” (Regional President of EMEA, IHG).

When an emergency or crisis happens, response teams can take the incident away from top management and deal with it separately, thereby minimising the impact of the event on normal operations. “The commander who is running those situations is very competent. He knows where his decision matrix is and what his level of empowerment is and he just gets on with it” (Chief Operating Officer, Virgin Atlantic). With major accidents and natural disasters typically triggering claims, insurers such as Zurich Insurance similarly have emergency response teams. Instead of being geared to protect their own operation from disruption, these teams, which can be forward deployed, are focused on getting their customers’ businesses back to normal as quickly as possible. Insurers essentially sell trust and delivering a good claims experience is crucial to maintaining client relationships and developing loyalty. As is often the case within IHG, employees are proud that they have advanced ways of dealing with risk, but there is no complacency: “I think we recognise that crisis management is not something that’s static, it is something that we need to constantly improve and you never do it completely right” (VP Global Security Risk Management, IHG). It is recognised that “crisis management is about leadership and it is about values and behaviours” (SVP Head of Global Risk Management, IHG).

Leadership and governance

A number of the case study organisations faced major risks that could suddenly and unexpectedly emerge. For example, natural disasters, terrorist attacks or major accidents can take place with little warning and can severely disrupt normal business operations. To deal effectively with these challenges and to minimise reputational and financial damage, a number of sample organisations have separate structures that are normally dormant but can be quickly mobilised in case of emergencies or crises. These emergency response or crisis teams are typically task-focused, comprising specialists from across relevant functions. Good communication is crucial in both recognising and responding to risks and AIG has a governance forum that is responsible for reviewing the effectiveness of risk-related communication. Non-executive directors are involved in bringing an external perspective on the effectiveness of communication on risk. This governance system ensures that AIG is “compliant from a regulatory stand point, that we’re satisfied that we have the resilient controls in place to handle risks that face us in our business and we’re governing, we’re managing, we’re testing resilience” (Executive Director, Commercial Lines Division of AIG UK). While each major unexpected event is unique, industries such as power generation, insurance, hotels and airlines have dealt in the past with a range of serious accidents, and security and weather-related incidents. Hence, many of these situations are in a sense routine or business as usual events and this enables emergency response and crisis teams to rely on well-rehearsed contingency plans and adapt these to the particular situation 3 . During the handling of these events, response teams will have direct lines of communication with executive levels, but typically operate independently.

3 However, in less resilient organisations, the learning from a previous crisis or incident is lost when employees move positions.

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Section 5: Resilience Principle No 4: ‘Rapid Response’