Annual Crisis Report Reveals No Shortage of Business Crises In 2007

The Institute for Crisis Management each year produces an Annual Crisis Report. By scouring news coverage, ICM creates a useful tool to help communications people and other business leaders examine trends in media coverage of crises. (To view the Annual ICM Crisis Report, see http://www.crisisexperts.com/2007CR.pdf.)

The number of business crises in 2007 was down slightly from the two previous years, but still above the 10-year average. The past year brought us an array of well-covered stories: the Virginia Tech shooting, toy and pet food recalls, coal mine disasters, a tiger attack at a California zoo, and a series of mortgage foreclosures and troubled lending institutions, to name just a few.

ICM groups crises into 16 categories. Crises in just three of those categories increased last year. They were defects and recalls, workplace violence, and class-action lawsuits. If you think back over the big news stories from 2007, increases in those three categories aren’t much of a surprise.

Care to guess the most crisis-prone industries in 2007? Before you look at the list below, take a shot and see how many you get right. Before I share that list, let me tell you that over the past 10 years, two-thirds of all crises are of the smoldering variety. Sudden crises – fires, explosions, natural disasters, workplace violence – often get the most attention. They’re easier to plan for and recognize and are more visual for the news media. But it’s the smoldering crises that can be hardest to manage because, if not dealt with early, they can take on a life of their own. Smoldering crises are problems that start out small. Someone in the organization is aware of the situation but, for a variety of reasons, doesn’t react properly and fix the little problem before it becomes a big deal and a public issue.

Okay, do you have your guesses written down? Here are the 10 most crisis-prone industries in 2007 based on the number of database records:
1. * Software Makers
2. * Pharmaceutical Companies
3. * Petroleum Refining
4. * Natural Gas Companies
5. * Security Brokers/Dealers
6. * Banking
7. * Telecommunications
8. Automobile Manufacturing
9. * Airlines
10. * Computer Manufacturers
* In top 10 the previous year