Crisis Management - OSHC€¦ · crisis management plan.” Kong) Limited, embraces an open attitude towards crisis management. His aim is to achieve a crisis management culture that

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Introduction

The “911 incident” in US has not only caused huge human casualties andeconomic losses, the production activities and daily operation of manyorganizations are also seriously disrupted. There follow natural concerns anddiscussions about crisis management. In Europe and America, some of thecountries have already increased resources to strengthen their “crisismanagement”, and the “911 incident” is a test to the practice of the “crisismanagement systems”. In Hong Kong many organizations have also put inplace a set of “crisis management” policy and system, in a bid to control acrisis incident and minimize the impacts on the organization. In this issue,three local organizations would share their experience in crisis managementwith our readers.

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Crisis Management

1

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Cathay Pacific Catering Services (Hong Kong) Limited

A Crisis Management Culture of“Bilateral Command Flow: Top-down and Bottom-up”

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“We place great value on frontline staff opinions. They have the best knowledgeof the operational details. If the management can take into consideration andtake action on the suggestions they raise regarding safety, the frontline colleagueswill be encouraged to contribute more inputs that are indispensable for a goodcrisis management plan.”

Mr Chau Chun-wai, General Manager, Cathay Pacific Catering Services (HongKong) Limited, embraces an open attitude towards crisis management. His aimis to achieve a crisis management culture that features “Bilateral Command Flow:Top-down and Bottom-up”, so that the crisis communication programme wouldinvolve its 1,400 plus colleagues who will not be confined to a top-down commandmode, but offer bottom-up inputs.

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Mr Chau Chun-wai, General Manager, Cathay Pacific Catering Services (Hong Kong) Limited

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A delicious, steaming on-board meal combines not only careful menu

design and superb culinary skills, it takes also the precise management

from purchasing, production, up to the point of dispatch.

To cater daily for over 30 international airlines, 120 flights, and

40,000 travelers, Cathay Pacific Catering Services (Hong Kong) Limited

has a firm belief in quality service. Therefore since 1997 a crisis management

programme has been drawn that adopts a bilateral command approach.

As of now the categories of crisis management items in Cathay Pacific are

rather comprehensive, which include:

A. Major operation system malfunctioning

B. Major information management system malfunctioning

C. External communication system malfunctioning

D. Electrical malfunctioning

E. Electronic operation system malfunctioning

F. Corporate vehicle malfunctioning and vehicle fuel supply shortage

G. Road transport network malfunctioning

H. Microorganism laboratory facilities malfunctioning

I. Infectious disease

J. Food poisoning

K. Industrial action and major violence

L. Explosion, fire, or chemical leakage

M. Major industrial accident

N. Extreme labour shortage

Although the basic crisis management categories are defined, Cathay Pacific

believes that the items must be constantly reviewed and updated, and this

takes the efforts of all colleagues.

“Even if you are the shrewdest of management it would still be impossible

to define all crisis possibilities. Therefore we solicit the support of all

departments to tap into their experience in conceptualizing the crisis

scenarios that may strike the business. This will be an immense help in

clarifying the constantly changing crisis scenarios and we can thus promptly

update out emergency manual,” said Mr Chau Chun-wai, General

Manager, Cathay Pacific Catering Services (Hong Kong) Limited, who

explicitly disapproves of rigid adherence to existing crisis management

practices.

With such an open attitude that embraces opinions from the frontline

colleagues, the company benefits much in the formulation of a most up-

to-date crisis management programme. The programme also improves with

the valuable experience gained in dealing with actual crises.

For instance in 1993 in Kai Tak Airport, two armed robbers barged into a

Cathay Pacific Catering Services plant when being chased by the police.

As a safety measure the management evacuated all staff and suspended all

plant operations so that the police operation would not be hindered. Cathay

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Pacific had also to inform all clients and airlines by all sorts of

communications channels. Eventually the robbers were arrested and Cathay

Pacific got into action promptly, and full operation was launched again

ten hours from the incident. Cathay Pacific concluded that the top priority

in such situation was staff safety and it was of utmost importance that full

coordination with the police be made.

Last summer, when Cathay Pacific Catering plants have already moved to

the new airport, a CLP transformer station nearby broke down and

electricity supply to our plants suspended. Hence, the automatic system

and the delivery system could not be operated. The management therefore

initiated the manual operation mode as laid out in the crisis management

manual, and fully utilized systems and facilities that ran on supply

electricity. For example the 16 elevators served as the automatic facilities

for delivering meals from upper to lower levels. After the incident, Cathay

Pacific strengthened the supply electricity system so that more facilities

and systems can continue functioning in the event of power suspension.

A monthly safety committee meeting was held in a bid to constantly

upgrade the programme. It is a channel for the company to receive and

study inputs from the staff. This builds up a high confidence in the

implementing .

The single most important element of the programme is the cooperation

and participation of the colleagues. A well-designed crisis management

programme, effective emergency measures, and the bilateral

communication culture will function best with staff participation. Mr.

Chau believes it is the management’s responsibility to ensure the staff fully

understand their respective roles in crisis situations. Good crisis

management practice is after all a combination of an update emergency

manual, bilateral communication, as well as regular emergency drills.

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Participated in the Ramp Safety Month which organized by the AirportAuthority. Mr. Yeung Kwan Por and Mr. Ronald Lau from CPCS havewon the second runner up and outstanding prizes respectively.

4

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A Crisis Management System:“The Art of Planning, Implementation, and Management Meticulousness and Intelligence Reign”

As one of the leading property management companies in Hong Kong, KaiShing Management Services Co. Ltd. manages properties exceeding 84 millionsquare feet, equivalent to 723 standard football pitches. The types of propertiesare diverse, including private housing estates, public housing, large shoppingmalls, commercial buildings, and airport cargo freight centres. To handle theseimportant security and management responsibilities, Kai Shing firmly believesthe key to success is the implementation of a comprehensive, effective crisismanagement system.

“When our property management staff return home from work, they willnaturally ponder on the fact that the uninterrupted services of superb security,water, electricity, lighting, and elevators are attributable to the diligence of ateam of people who work around the clock, supported by an outstandingcrisis management system.”Mr Lam Man-Pak, Director, Kai ShingManagement Services Co Ltd, takes a user’s perspective on crisis managementissues.

When a building experiences electricity interruption, the operation of back-up generators will be triggered to maintain minimal but essential electricitysupply to the major building’s facilities. It is therefore common practice forthe management to conduct regular inspection on the readiness of back-upgenerators. But Mr. Lam pointed out that being able to think a step ahead isan integral part of the Kai Shing culture. They will look into details such aswhether sufficient diesel is available and whether diesel supplies are accessiblein the proximity. Or when the diesel supplies are also used up, where wecould obtain further supplies.

“Crisis management is not about the remedy of the symptoms. It is acomprehensive, effective system to prevent the emergence of the crisis. Whenthe crisis becomes unavoidable, actions should be taken to minimize theimpacts.” Lam further said that customers’ biggest concern is always security.

“We would re-deploy our security patrol routes on an irregular basis so thatcriminals are unable to grasp our patrol pattern. We will install combinationlocks and close-circuit cameras at obscure positions or access points that arehard to manage. Maintaining close liaison with the Crime Prevention Bureauof the Police Force is also important.”

Following this logic, Kai Shing has pioneered the introduction of double-lobby design. Under this design the buildings will have two access gates, eachwith a lobby to its own. Elevators are installed within the inner lobby, so thatthe outer lobby will serve as a buffer zone. Strangers will be deterred fromgetting into elevators direct when they follow a resident passed the gate. The

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same concept is adopted in the double-gate design in car parks.

Good crisis management thinking has to be complemented by the efforts of our4,500 staff.” Lam reiterated the importance of teamwork and cooperation. The teamcarries out regular drills and meticulous implementation of the items on the crisismanagement checklist. This is the best guarantee that management decisions will takedesired effect.

In addition to the set up of a Super-e Management Centre to strengthen the riskmanagement work in all the properties under its management portfolio, Kai Shinghas implemented a Super-e Management System, an intelligent management tool, forthe continuous processing and analysis of management and security data. Kai Shing’scritical close-circuit camera system is also installed on the company’s secured web-based system, enabling the management to have real-time monitoring on the Interneteven when they are out of town or working from the head office. The synergy betweenhuman and technology resources results in notable improvements.

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Kai Shing Crisis Management Systems

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Super-e Management Centre in Sheung Shui is therealization of Kai Shing incorporating advanced technologyinto property management.

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Kai Shing encourages active participation of residents andtenants in various working committees to win their supportto the Crisis Management policies.

6

KCRC Hazard Management�� !"�� !"#

“Hazard and risk are two different things.” Said Dr. Vincent Ho, the KCRCCorporate Risk Manager. “A drum of gasoline is a fire hazard. One can easilytell you the size of the fire hazard by measuring the weight or volume of thegasoline in the drum. But he would have difficulty in telling you what the risklevel of this fire hazard. For instance, if he simply knocks over the drumcausing someone to slip and fall, the risk level to the falling person could be farlower than if he ignites the gasoline. Each scenario associated with a hazard,with a different likelihood of occurrence, can lead to very differentconsequences. Thus, one simply cannot tell the total risk of a hazard withoutpostulating a comprehensive list of scenarios associated with the hazard.”

“Although it is difficult to assess the risk of a hazard, the level of risk can bereduced by a certain extent if one can manage the hazard well.” Said Dr. Ho.Under this premises, the KCRC introduced a corporate-wide HazardManagement System as the initial step of its Risk Management Programme,with an aim to control the risks associated with the identified hazards to a levelthat is as low as reasonably practicable.

“The common misunderstanding in applying a hazard management system isthat a layman tends to think the more hazards he has identified, the worse offhe is because the record may show that his system has more hazards than thesystems of others.” Dr. Ho explained the approach adopted by the KCRC insafety management - to proactively identify all reasonably foreseeable hazardsand control their risks. “In fact, the more hazards one can identify the betteroff one is, as it means more hazards are under control. Imagine that there is afinite number of hazards associated with a system, the more one can identifyand control, the less unknown one will have to deal with.”

The KCRC Hazard Management System is devised to help the managementprioritise the use of resources in risk mitigation. The procedure uses a riskmatrix to categorise hazards into different risk classes: A, B, C, D, and E,representing high-risk, medium-risk, low-risk, negligible-risk, and hazard beingeliminated, respectively. High-risk items should receive the highest priorityin implementing risk control measures.

“Another common misunderstanding is the avoidance of assigning Risk ClassA to a high-risk hazardous situation. Typical engineer tends to think that byregistering a Class A hazard in his system, the senior management might thinkhis system is less safe than someone who has no Risk Class A hazard.” Dr. Hoexplained that Class A hazards do not necessarily mean they will entail seriousaccidents. “We categorised some hazards as high-risk because of their frequentuse and high accident rate. They often may lead to no injury or minorconsequence. The risk classification is a tool to help the management inprioritising their focus and resources to deal with a large number of hazardsidentified from their systems. Thus, assigning a lower risk class to a high-risksituation would cause the focus and resources be spent in the wrong direction.

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Dr. Vincent Ho, the KCRC Corporate Risk Manager

7

” Dr. Ho emphasised that the risk class assignment is relative. “If one does notidentify any Class A hazard within a system, all Class B hazards in the systemwould impose a relatively higher risk to the system than other hazards and wouldrequire one’s full attention as if they were Class A hazards. It is simply not worth toplay the game of avoiding assigning Class A to high-risk situations.”

To prevent these misunderstandings, Dr. Ho advocated that appropriate trainingmust be provided to all line managers and relevant staff to ensure the competencyand consistency in the risk assessment and the application of the procedure acrossall departments and divisions within a company.”

One key improvement of the KCRC Hazard Management System over a typicalhazard management system is the consideration of a “hazard life cycle”, whichdefines the different statuses of a hazard from being identified to being monitoredafter the implementation of control measures. This allows the management torealize the progress of the hazard management process. Dr. Ho explained that theKCRC Hazard Management System classified the life cycle of a hazard into 6status or stages. “Each status reflects a unique milestone of the progress of thehazard management process. An item at status 4 is much better off than a hazardremaining at status 2. The management can also use this as a tool to monitor howmuch time has been spent in advancing the status of certain items.”

The possible risk control measures include design change to eliminate the hazard,replacement of hazardous material with a safe material, use of safe guards, etc.“Many organisations will identify the hazard, introduce control measures and closethe hazard there. We choose to take it a step further and calculate the residual riskin order to make sure the remaining risk is monitored and controlled.” Dr. Hohighlighted another key feature of the KCRC Hazard Management System. Residualrisk is the risk level of a hazard after control measures have been implemented.

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8

“Knowing the residual risk can also avoid spending unnecessary resources oncontrol measures. The assessment of residual risk forces the managers toconsider the cost-effectiveness of a control measure before they areimplemented.”

The KCRC Hazard Management System includes an intranet web-baseddatabase, called the Hazard Log, which contains the action forms of all hazardsidentified and allows the easy tracking and monitoring of the hazards. Eachhazard’s life cycle is clearly registered in the action form. The form recordseach hazard’s identification number, person-in-charge, content, status, residualrisk and next action due date. All line managers can access these forms throughthe KCRC’s intranet.

Regarding common misunderstanding in risk management programmes, Dr.Ho explained, many equal statistics to risks. “One consultant suggested tome that the risk of collision was zero last year because there was no collisionlast year.” Dr. Ho clarified that there could be realised risk and unrealisedrisk. Realised risks related to the frequency and consequence of accidents thathad occurred. Unrealised risks related to potential accidents that could haveoccurred with an estimated likelihood but did not occur. “One should,therefore, consider both realised and unrealised risks in assessing risk, andaccident statistics can only tell you the realised risk. It is therefore ineffectiveto use only accident statistics for prioritising safety plans. ”

Moreover, it is found not practicable to make plans solely based on the analysisof risk (i.e. risk-based approach). This is how Dr. Ho sees it: “Safety analysiscan be risk-based, but safety management has to be risk-informed, that is totake the assessed risk one of the many pieces of information towards decisionin safety matters.” Dr. Ho explained that the latest trend in apply riskmanagement in safety is to apply a risk-informed approach rather than a risk-based approach. The risk-informed approach is a more realistic way tocharacterise the decision making process in real life situation, often,management have found there are other tangible and intangible factors thatcan affect a safety decision in addition to the consideration of risk. “As anexample, the consideration of regulatory compliance and environmental impactin making a decision can be as important as the consideration of safety risk.”Under Dr. Ho’s leadership, the KCRC has become the first company in HongKong to use risk-informed approach in safety management.

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KCRC Hazard Management Procedure