Crisis Management and Why Every Business Needs a Crisis Management Plan?

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Business crises come in all shapes and sizes. A data breach is a business crisis. An employee turned whistleblower is also a business crisis. And a failed product definitely is a business crisis.

While crises can take a variety of forms, they all have a few things in common. For one, they have the potential to sink a business. Also, they are not picky about the type of business that they affect.

Statistics from 2014 through 2019 show that 69 percent of business leaders experienced at least one company crisis during that period. Many have experienced more than one. The average number of crises experienced by business leaders during those years is three.

If you are a business leader, statistics say you should be expecting a business crisis. Ignoring the potential puts your business at great risk. Developing a crisis management plan allows you to minimize the damage when a crisis occurs.

 

What is Crisis Management?

The first key to effective crisis management is acknowledging that a crisis cannot be avoided. Consider the COVID-19 pandemic. For most companies, COVID was a company crisis. For some companies, it was a crisis from which they did not recover. For all companies, it was a crisis that could not be avoided. Crisis management is not developing a strategy for avoiding a crisis. Rather it is the process of anticipating a crisis and developing a plan for reducing and mitigating its impact.

Developing a crisis management plan involves identifying what a crisis might look like and its potential impact. Regardless of your business, a natural disaster like a pandemic or a hurricane is a crisis that may affect you. Other crises will be more closely related to your business or industry. For example, if you manufacture a product, there is the potential for that product to malfunction and cause a crisis. If you provide a service to clients, there is the potential for an employee to misperform and cause a crisis. If you manage investments, there is the potential for a stock market crash to cause a crisis.

After you determine the type of crises you might expect, you can begin to understand the impact they could have. For example, if your company relies on data for its operations, you should think through the ramifications of a data breach. Will losing customer data make it impossible for you to do business? Will it expose you to legal liabilities? Will it affect the businesses with which you do business? Exploring these questions will help in developing a crisis management plan. It will also make the importance of a plan clear to the key stakeholders in your organization.

 

Who is Your Crisis Management Team?

Once the potential for a business crisis is established, a team should be chosen to respond to the crisis. One of the key issues with managing a business crisis is losing control of crisis communications. In the age of social media, every one of your employees has access to millions of people. One rogue tweet can make a bad crisis even worse. By establishing a crisis management team, you establish who should be communicating about a crisis and who should not be.

When a crisis strikes, the crisis management team will be the people who drop what they are doing to gather and confer. In general, this team should include some upper-level people. In big companies, it may include the CEO. In smaller companies, the owner will usually be a part of the team. The person or team responsible for overseeing communications should definitely be a part of the team.

 

What is Your Crisis Response?

As soon as a crisis is detected, the crisis management team must begin to develop a response. For the most part, this will involve putting into effect the crisis management plan that has already been established. However, there may be a need to tweak certain components of the plan to address the particular crisis.

If your company does not have experience with crisis management, this may be the point where you call for help. Public relations firms can provide crisis management experts who can assist with developing and deploying crisis management plans. A key service they provide is developing a crisis communications plan.

PR firms also can give you access to media professionals that can empower your crisis communications. It is important to counteract bad press by providing your response through press releases and organic media. PR firms have relationships with press representatives that can help to get your response out quickly to a host of outlets. PR firms can also help to assess outward-facing communications such as your website and social media channels to ensure a consistent response.

Here’s a bonus tip: When a crisis strikes, make sure that your social media channels are helping, rather than hurting. Social media crisis management will definitely involve posting about the crisis at some point. However, it might also involve shutting down any automated posts that you have scheduled on your channels. If your company has experienced a data breach, for example, you will not want automated posts that promote your security measures.

 

What is Your Crisis Policy?

For small companies, ensuring that your crisis communication plan is being carried out across the entire company is relatively easy. When a crisis happens, you simply gather everyone in a room and explain how the company will move forward. For large companies, however, getting everyone quickly on the same page can be challenging. For that reason, having a crisis policy in place before a crisis happens is valuable.

A crisis policy can inform employees who to contact when they need to report a crisis situation. It can explain the company’s plan for addressing a crisis, including to whom inquiries about the crisis can be directed. Most importantly, a crisis policy will make it clear to employees what they should not do when the company is involved in a crisis.

Again, we live and work in the social media age. You may have employees who have more online followers than your company does. If they do not know what role they are expected to play, their actions could turn a crisis into a disaster.

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Nik Korba

Nik Korba

Nik has been a screenwriter, ghostwriter, novel writer, song writer, and blog writer with a degree from the University of Miami. He has prepared communications for thousands online and on social platforms, as well as being involved in the production of more than 1,000 videos.

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