Crisis management is an integral part of running any business, no matter the size. The potential for an unexpected event to throw any business into turmoil is real and companies must have a plan in place to mitigate these situations. These events can include natural disasters, negative publicity, computer hacking, a product recall, and anything else that can shake the foundation of the company.
It is crucial that companies have a crisis management plan to deal with a crisis effectively.
What Is Crisis Management?
Simply put, crisis management is the plan that a company has in place to handle any emergency that impacts the company.
The focus of crisis management is how the company will overcome whatever crisis has occurred and taken steps to reach a positive outcome.
There are different types of crises but an effective crisis management plan will guide managers through how to handle any of them effectively.
Why Crisis Management Is Important
Crisis management is important because, without it, the business will fall into complete chaos. Imagine if a tornado hits the workplace and there is no plan in place. People would run around chaotically and it would be more dangerous.
With a plan in place, leaders take charge, people know what to do, and the catastrophe wreaks less havoc overall. Crisis management is critical for getting a company through any crisis and on a path to resolution.
Crisis Management Team
The role of the crisis management team is to determine the policies that will be put into place during the crisis and should include department managers as well as human resources representatives and legal experts.
During the crisis, each team member will be responsible for the actions of his or her department and everyone will know exactly what to do.
Crisis Management Plan
The crisis management team will create a crisis management plan so that the company can respond to and effectively resolve any emergency as quickly as possible. There are four parts to this process:
Define specific crisis plans: Different types of crises will require different types of crisis intervention. Every company should have a specific crisis management plan in place for the following potential disasters:
- Natural Disaster Plan: This plan should include how to evacuate, seek shelter, and handle a lockdown.
- Communication Plan: In case of a crisis that impacts the company’s reputation or negative publicity, there needs to be a plan for communication with the employees, shareholders, and media.
- Business Continuity Plan: This is a plan for how to continue to run the business in the face of an emergency.
- IT Crisis Plan: This plan concerns data breaches, hacking, and any loss of computer hardware or data.
Determine the Crisis Management Team and Sub-Teams: The team will include the head of each department, the company’s lawyer, and a human resources representative.
A team leader should be appointed to coordinate what will happen during the crisis. Each department head should identify a group of people from his or her department to be the sub-team for that department.
Information and Company Training: The crisis management team should plan how the information will be communicated during a crisis. Crisis management communication is critical to the success of the plan.
First of all, employees need to have quick access to information during a crisis whether they are at work or at home. This can be efficiently achieved through a link to a special area on the company’s intranet. Another option is to have a plan for email updates to go out during a crisis.
Training is critical so that everyone knows what to do. For example, the company can provide training for natural disasters such as earthquakes or fire so that everyone knows how to exit the building and what needs to be done.
The team leaders should train and engage in mock emergency situations to better prepare for an actual emergency.
Plan for Moving Forward: The emergency management team should plan what steps the company will take to move forward and into recovery from the emergency.
This might involve damage control and positive media messages, hiring new employees, relocation, and other actions that are necessary depending on the emergency. The team should brainstorm and come up with plans for as many options as they can.
In determining the plan, the crisis management team needs to be prepared for any emergency that may occur. The key is to have a solution-focused management plan in place before the disaster occurs.
Process of Managing a Crisis
Regardless of what specific crisis has impacted a company, there are four basic steps that get the crisis management plan in motion.
1. Contain and Understand the Situation
The crisis plan will come into play right away. For example, if the emergency is a natural disaster, the team leader will assess and contain the emergency as much as possible.
The employees will be directed on how to proceed, whether it is seeking shelter in a safe place or exiting the building. The team leaders will assess the situation and contain it as much as possible.
2. Investigate the Cause of the Problem
The next step is for the crisis management team to investigate what caused the emergency. If there is a data breach, they will determine how it happened.
If there is a lawsuit, the lawyer will bring everyone up to speed on the details. The plan is really critical here because it dictates how and where the team will be informed and investigate what caused the disaster to occur.
3. Outline How to Resolve the Problem
Once the team has contained the situation and found the causes of the emergency, they will work together to outline how the problem will be resolved.
Each team member will handle his or her department and the plan will allow everyone to work together efficiently to resolve the problem.
4. Set Long-Term Changes in Motion
Finally, any emergency mandates long-term changes to make sure that it doesn’t happen again. If the emergency was an IT problem, the company needs to plan how to make their data more secure.
If the problem was flooding, the company may need to relocate. Whatever long-term changes are required to move the company forward will be put in motion at this time.
These four steps simplify the general approach to managing a crisis. Different departments within the company will have unique guidelines for their specific tasks, all of which should be outlined in the company’s crisis management plan.
The probability of different types of emergencies will vary depending on the nature of each company but in general terms, most companies can follow these guidelines.
Testing a Crisis Management Plan
Testing a crisis management plan is an effective way to pinpoint weaknesses and make the necessary changes before an actual crisis occurs. There are a number of purposes that testing the plan serves:
- Assessment of the plan before a crisis occurs
- Assessment of understanding of employees concerning the plan
- Improving communication during an actual crisis
- Increasing emergency response time
Testing should be done in direct relation to the perceived risks associated with each type of emergency. For example, a company in California may have testing for earthquake emergency procedures on a more regular basis while a company in South Florida may test for hurricane emergency plans.
Business Continuity Best Practices
Business continuity plans and best practices for disaster recovery procedures are critical to the survival of the company. Testing them periodically allows employees to learn how to continue to function and provide services in an emergency situation.
For example, if the computers and the Internet are not functioning, the employees should be able to take orders and continue providing service to customers. Testing the plan will ensure that employees are prepared when an actual emergency occurs.
Final Thoughts
The importance of managing a crisis cannot be overstated. It is absolutely critical that every company has a plan in place in case of an emergency.
Emergencies can take many different forms from a lawsuit against the company or a product recall to a natural disaster or an IT failure that results in a data breach or hacking.
Some emergencies require damage control and containment; others may require a company overhaul or even complete relocation. The crisis management team will determine the appropriate procedures for the different types of emergencies so that the company is prepared no matter what happens.
In addition to understanding and containing the crisis, it is crucial for the company to be able to continue to conduct business and have a plan for recovery once the crisis has passed.
How effectively the company is able to achieve this is directly related to how well the crisis management team has prepared for a crisis. The crisis management plan is the key to recovery and future success.
By selecting the team, preparing for disasters, and creating crisis management plans for various situations, a business will be able to recover and move forward.
Testing the plan will only help the team to improve it and once an actual crisis occurs, everyone will know what to do.
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