The 06:40 Declaration: Crisis, Incident or Continuity Event?
At 06:40 on a Tuesday, the plant manager of a 340-person specialty chemicals site declares a crisis by email after learning that the sole qualified supplier of a corrosion inhibitor will miss deliveries for at least three weeks following a fire at its own plant. The site holds 11 days of stock. The customer contract for the downstream automotive coating carries penalties of EUR 40,000 per day of late delivery after day 14. There are no injuries, no environmental release and no regulatory notification trigger. The site's crisis plan defines a crisis as an event with actual or potential significant impact on people, environment, assets or reputation, and requires the Crisis Management Team to convene within 60 minutes of a declaration. The CMT has nine members; convening costs roughly EUR 15,000 in overtime and diverted attention, and the site is midway through a planned safety-critical shutdown. Two customers have already called their account managers. The regional communications lead asks whether to draft a statement.
1. Should this be run as a crisis, an incident, or a business continuity event? Show the criteria you apply and where you land.
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Judgement: business continuity event under incident management, with the CMT on standby and a pre-agreed escalation trigger. Not a full crisis declaration today.
Work through the plan's own four tests rather than the label people are using:
- People: no injury, no exposure, no site population at risk. Not triggered.
- Environment: no release, no permit issue. Not triggered.
- Assets: no damage to our site; the supplier's loss is their asset. Not triggered.
- Reputation: the only live hook, and it is speculative until a customer line stops.
Because the definition is an OR test, reputation alone technically satisfies it. That is exactly why the definition is a poor decision tool: it permits over-declaration, and the plan gives no materiality threshold. Judgement has to supply one.
The decisive facts are dates, not adjectives. Stock covers 11 days; the outage is 21 days; the customer commitment breaks around day 11 and penalties begin day 14. That is a nine-day window to qualify an alternative source, buy on the spot market, or secure a written customer waiver. Nine days is enough for a supply-chain incident team and not enough to waste on a nine-person CMT sitting in a room.
The counterweight to declaring is real: EUR 15,000 plus the attention of nine senior people during a safety-critical shutdown, where distraction has its own risk profile.
Escalation triggers to set now: no qualified alternate source by day 5; any customer line stoppage; supplier signals the outage will exceed four weeks; media or customer escalation to board level. On any of those, the CMT convenes without debate.
2. Who should hold decision authority for (a) spending money to mitigate, (b) contacting customers, and (c) speaking publicly?
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Authority should be assigned by consequence, not by seniority, and it should be written down before the argument starts.
(a) Spend. The plant manager should hold a delegated limit that matches the cost of being wrong, not the cost of the problem. If expedited freight and spot-market buying plausibly cost EUR 200,000-400,000, a EUR 50,000 limit is decorative. Recommended: incident owner approves to EUR 150,000; above that, one named executive (COO or site director) approves within two hours, no quorum required. The failure mode to avoid is a mitigation decision waiting on a nine-person meeting.
(b) Customer contact. Account managers should not freelance here, because two have already been called. One named commercial owner sets a single message and a single list of who is contacted, in what order, by when. Customers should hear about risk to their supply before they discover it on a delivery notice; that is the reputational lever, and it is cheap now.
(c) Public statements. No public statement while there is no confirmed customer impact and no external attention. The communications lead should draft a holding position but not publish, because publishing creates a record and invites questions about a problem customers have not yet raised. Pre-clear the spokesperson and the approval chain so that if a journalist calls, the statement can issue in under two hours.
Why this split: mitigation must be fast, external voice must be single, and public disclosure must be slow until it is warranted. The recurring failure in these events is the opposite pattern: fast public words and slow internal decisions.
3. What are the first five actions you take as the accountable manager in the next two hours?
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Order matters, because the first actions lock in either options or constraints.
Verify the facts before acting on them. Confirm the supplier's outage duration in writing, the actual stock on hand versus the system number (physical count on the inhibitor only), and which open customer orders depend on the affected batch. A three-week figure that becomes five weeks on day 3 changes every decision, so get it in writing.
Appoint one incident owner by name with the authority described above, and keep the CMT on standby rather than convened. Name a deputy. Write the escalation triggers into the log.
Open three parallel options, not one. Qualify an alternative supplier (including a non-qualified source with a formal deviation and customer consent), substitute or reformulate with R&D, and negotiate a waiver or re-sequence with the two calling customers. Assign an owner and a deadline to each. A single option is a plan; three options are a position.
Control the external voice now. Brief account managers with approved wording, instruct them to log every customer contact, and hold a draft statement unpublished. Tell the communications lead the release conditions, not just to wait.
Start the log and set the review cadence. Twice-daily fifteen-minute stand-ups with a written decision log, because the risk here is drift, not drama. Include in the log the day-11 break point as a tracked date.
As a parallel action, flag the plan defect: the OR-based crisis definition has no materiality threshold and will keep generating declarations like this one. That is a governance fix, not a today fix.