Global downturn highlights need for crisis planning, say senior Gulf executives

More than three-quarters (77%) of the executives who had undertaken some form of crisis planning said having a plan in place helped their company manage the downturn.

However, only one in six (16%) said they had a plan fully in place to deal with the economic crisis, while little more than a quarter (26%) strongly agreed that their organisation is well prepared to deal with a crisis if it occurs.

The online survey of 254 GCC-based business leaders was conducted by Real Opinions for Hill & Knowlton's Middle East Corporate Reputation Watch earlier this year, at the height of the economic crisis.

Brian Shrowder, Director of Crisis & Training, Hill & Knowlton Middle East, said:

"The impact of the global downturn on the Gulf region was greater than generally predicted. When it hit, many companies in the GCC were caught unawares. Managers who had undertaken proper risk assessment and crisis planning fared better than those who were forced into making critical decisions on the run."

Communication is vital:

An overwhelming majority (85%) of respondents agreed that communication is either extremely important or very important during a crisis. 61% strongly agreed that in the absence of information people are more inclined to think the worst.

Yet only 36% of executives believed their organisation had enough resources fully in place to manage communication of difficult messages during a crisis. Less than a fifth (18%) thought their company had put out the right level of information to the media about the crisis.

Dave Robinson, Hill & Knowlton CEO, Middle East, Turkey & Africa, commented, "In challenging times, it is more important than ever to communicate clearly and effectively with employees, customers, investors and partners. Failure to do so can lead to rumour and speculation, resulting in a loss of confidence."

Robinson added, "The effects of the global recession appear to have eroded public trust in business. A separate study conducted in February this year for MEPRA, the Middle East Public Relations Association, found corporations were regarded as not credible or reassuring by 53% of residents in the UAE."

"Companies in the Gulf region need to address this challenge to their reputation and be ready to communicate openly about the impact of market conditions and their management's strategy," added Robinson.

Forewarned is forearmed:

The Middle East Corporate Reputation Watch 2009 findings also underscore the importance of thorough research in a rapidly changing market. More than half of the senior executives surveyed (54%) did not feel they had enough information about the global financial crisis and its impact on their business.

While 89% felt that it is important to have research data on how a company's stakeholders would react to news of a crisis, only half (52%) said their organisations have this kind of research data.

Dan Healy, CEO of Real Opinions, said, "Managing a crisis without up-to-date business intelligence is like boxing while blindfolded. It becomes harder to make the right decisions under pressure and to communicate those decisions in a way which maintains trust and confidence."

Healy added, "As the survey respondents concluded, stakeholder sentiment is vital to an organisation's success in a crisis. Without the tools to track market perceptions there is little wonder that some GCC companies were not as proactive as they could have been in responding to the economic crisis."