A Two-Year Study Shows that Companies Failed to Learn from 9/11

A few months before 9/11, Dr. Murat Alpaslan and I sent out surveys to the Fortune 1000 companies to determine what, if anything, they were doing to prepare for a wide array of major crises, from terrorism to product tampering to financial improprieties. Immediately after, we sent out a follow-up survey to see if anything had changed as a result of 9/11. We also sent out follow-ups on the one-year and the two-year anniversary as well.On the whole, we are just as vulnerable and as unprepared as we were before 9/11. To put it mildly, this is unfortunate since the recent power outage on the East Coast demonstrates that all of us are as dependent on business to be prepared for large-scale crises as we are on government.

Immediately after 9/11, preparation for all kinds of crises shot up dramatically, but especially for terrorism. The reasons were just as important as the increases themselves. Most executives that we talked to reported that their companies increased their preparations because, “it was the right thing to do irrespective of costs.”

One and two years later, only a tiny fraction of companies are continuing their preparations for terrorism and other crises if and only if they are cost effective. Even more disturbing, preparations for terrorism as well as all other crises spiked about one year after 9/11 and they have continued to decrease dramatically. With few exceptions, we are back to the same low levels of crisis preparation that we were prior to 9/11.

9/11 may have impacted our national psyche, but unfortunately, it has not changed our long-term attitudes towards the importance of Crisis Management as part of the day-to-day conduct of business. This is one of the biggest reasons why we stumble from major crisis to major crisis. One week it is the power grid that is the object of national frenzy. The next week it is another company or industry gone belly-up through mismanagement or greed.

If there is a silver lining, it is the fact that there is a tiny body of companies and executives that “get it.” There are a small percentage of companies that prepare for a wide variety of crises whether crises have occurred recently or not. They practice Crisis Management equally in good and bad times. As a result, these companies experience substantially fewer crises, and they are substantially more profitable.

Crisis Management is not only the right thing to do, but it is good business.

About imitroff

Dr. Ian Mitroff is Professor Emeritus at the Marshall School of Business and the Annenberg School for Communication at the University of Southern California in Los Angeles. He is the president and founder of Mitroff Crisis Management, a private consulting firm based in Oakland, California, that specializes in the treatment of human-caused crises. He is a Senior Affiliate with the Center for Catastrophic Risk Management at the University of California, Berkeley.
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