Smoldering Crises

July 04, 2007

Smoldering Crises

The recent Institute for Crisis Management report on 2006’s business crises found that when leaders think of crises, they think of a fiery explosion, plane crash or natural disaster such as Hurricane Katrina. Instead, the ICM fround that “smoldering” crises are the ones that take companies by surprise and harm their reputations. In fact, ICM reports that two-thirds of all business crises over the past 10 years can be classified as of the smoldering type. Makes sense. Companies rally behind the red hot crises but overlook the simmering ones.

The top 10 greatest crises of 2006 are categorized as follows (in rank order):

White Collar Crime

Mismanagement

Labor Disputes

Catastrophes

Workplace Violence

Class Action Lawsuits

Casualty Accidents

Discrimination

Defects and Recalls

Consumerism

The top five most crisis prone industries in 2006 are airlines, software manufacturers, pharmaceutical companies, natural gas companies and petroleum companies.

Time for companies to manage their reputations better by establishing some form of crisis alerts or warning signals.

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Leslie Gaines-Ross
Leslie Gaines-Ross
lesliegainesross@gmail.com

As Weber Shandwick’s Chief Reputation Strategist, I focus on the ever changing world of reputation. For the past 25 years, I have relentlessly observed, researched and commented on the rise and fall of reputations.

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