“Hope for the best, plan for the worst” is an oft-repeated mantra in business. Catastrophes happen, and acknowledging that while you can’t prevent all disasters, you can mitigate their impacts through proactive measures is the first step toward effective crisis management.
To build upon this foundation, instituting a crisis management strategy is crucial. By providing structured guidance on how your team should respond to unforeseen challenges, you ensure they remain resilient and capable, even when circumstances seem daunting.
What’s crisis management?
In business, a crisis is any internal or external event that threatens the fitness or success of the organization by harming its:
- Reputation amongst stakeholders and peers
- Workplace operations
- Cash flow or other financial aspects
- Employees or customers’ well-being
Business crisis management builds contingencies into a company’s processes, establishing a planned and organized emergency response. Examples of management crises include:
- Environmental: Natural disasters such as earthquakes, tornados, and floods.
- Technical: System failures, software malfunctions, and cybersecurity threats.
- Public health: Events like pandemics necessitating organizational shifts for remote work, or product issues impacting consumer health requiring a comprehensive public response.
- Public relations (PR): Product recalls or ethical controversies, which can damage a brand’s reputation.
- Financial: Situations leading to monetary strains, potentially resulting in delayed payments to creditors or bankruptcy.
- Legal: Internal misconducts such as bribery, fraud, or information tampering, potentially leading to leadership disruptions and loss of stakeholder trust.
Crisis management versus risk management
While related, crisis management and risk management serve distinct roles in maintaining company operations. Risk management is proactive, designed to foresee, assess, and implement strategies to prevent potential risks, focusing on safeguarding business activities from disruptions.
In contrast, crisis management is reactive, addressing the immediate challenges of unexpected, disruptive events. It involves formulating and executing strategies to mitigate the impact on the company and its stakeholders. Crisis managers are crucial here, responsible for responding to emergencies and ensuring swift and effective action.
Risk analysis and management are integral to both processes. They help teams identify potential threats and worst-case scenarios, assess their likelihood, and prepare for them. This preparation proves crucial for crisis managers, providing a foundation for the crisis response plan and equipping the organization to handle emergencies.
6 stages of a crisis
Crises progress through distinct stages before resolving. Efficiently navigating these six stages of emergency management can hasten the organization’s return to normal operations.
While crises are unpredictable, there are often signs that they’re looming on the horizon. Observing weather patterns, global economic indicators, or employee malevolence toward coworkers could warn the organization early of a brewing emergency.
An unfolding crisis means you’ve entered the risk assessment stage. At this point, key personnel should evaluate the impact on business operations, estimate potential damages, and formulate a response plan.
After completing the risk analysis, the response team decides on the best action. The PR department initiates the response by executing the communication plan, informing employees, customers, and shareholders about the crisis management actions underway.
Everyone involved in addressing the crisis should undertake their assigned tasks and responsibilities according to the resolution plan and actively work to resolve the situation and prevent additional impacts. Meanwhile, the PR team uses its communication plan to maintain stakeholder confidence, controlling rumors and ensuring everyone understands that the crisis is under control.
Once everyone involved in emergency management completes the tasks outlined in the response plan, the crisis is considered under control. The focus then shifts to restoring the company’s regular operations.
As the organization regains its footing, the crisis management team reviews the effectiveness of the response. This post-crisis evaluation is crucial for enhancing future preparedness, identifying response shortcomings, and exploring strategies to prevent similar crises.
What’s a crisis management plan?
A crisis management plan outlines how a company responds to and manages an emergency to maintain business continuity. It specifies roles, responsibilities, and actions to minimize impact, aid recovery, and return to normal operations as soon as possible.
This plan serves as a guide, providing team members with a clear checklist of tasks for each crisis response stage. As a dynamic document, it requires regular reviews and updates, ensuring the organization remains prepared for emergencies.
How to make a crisis management plan: 6 steps
Managing a crisis requires a strategic planning process, best tackled by breaking it down into manageable steps. A practical approach includes establishing a plan template incorporating these six key steps.
1. Assemble the crisis leadership team
Inform the emergency management team that will spearhead the crisis response team. This team should include:
- A crisis manager to lead and coordinate efforts
- Experts from health, safety, security, and environmental fields
- A public relations specialist to handle communications
- Human resources and legal advisors for personnel and legal considerations
- Building custodians or facilities managers for on-site issues
Having these diverse team roles helps create a well-rounded response strategy for addressing various crisis scenarios, from natural disasters to cyber threats.
2. Assess risk
After assembling the team, conduct a brainstorming session focused on risk assessment. Use a risk register to identify and monitor potential threats. This tool helps analyze the probability of each occurrence, eliminate delays, and address potential roadblocks. It also enables management to clearly visualize each potential crisis, enhancing the contingency planning process.
3. Evaluate business impact
Analyze each identified risk to understand its potential business impacts, including everything from delayed sales and regulatory fines to organizational reputation damage. This evaluation helps gauge the severity and breadth of each risk’s possible consequences.
4. Outline a response
After finishing the risk analysis, decide on specific actions to counter potential threats. These measures might involve implementing a business continuity plan to keep operations running, issuing a press release, and conducting damage assessments.
5. Address additional factors
Effective crisis management extends beyond just planning responses. Set clear activation protocols that kickstart the process, compile a list of emergency contacts, and define roles and responsibilities so everyone understands their expectations during a crisis.
After finalizing the plan, share it with all employees. Regular annual reviews are also essential to adapt the plan to any changes in the business landscape, ensuring it remains relevant and effective.
How to manage a crisis throughout its life cycle
Managing a crisis requires diligent efforts before, during, and after the emergency.
Evaluate the likelihood of such an event and then take steps to prevent it. Action items include:
- Developing a comprehensive strategy for potential crises
- Hiring a crisis manager
- Assembling and training a crisis management team
- Conducting practice exercises to test and refine the response plan
Additionally, collaborate with the PR department to streamline the communication efforts. This includes:
- Developing a plan with PR for effective crisis communication
- Creating press release templates and draft messages to facilitate rapid public response
This approach allows upper management to concentrate on critical tasks during a crisis, with the assurance that communication strategies are ready for deployment.
During the crisis
Now, execute the crisis plan. The emergency management team takes charge, actively managing various crisis stages, swiftly addressing operational disruptions, maintaining open and regular communication with employees and other stakeholders, and ensuring the public’s and workers’ safety. Guided by the crisis plan’s strategies, this phase demands decisive action and effective management, focusing on rapidly minimizing the crisis’s impact.
After the crisis wanes, the focus shifts to ongoing communication and reflection. The PR team keeps providing regular updates, addressing any remaining questions or concerns from employees, customers, and other key stakeholders. Meanwhile, the emergency management team engages in a post-mortem analysis, evaluating the disaster response and addressing key aspects such as:
- Determining the impact and efficiency of the crisis communication strategy
- Ensuring the crisis team addresses any lingering questions
- Examining if there were any gaps in the team’s preparedness for the crisis
- Identifying any valuable insights and learnings from the crisis response
Tips and solutions for better crisis management
Even with a plan in place, effectively handling a crisis requires diligence and adaptability. Consider these best practices for enhanced crisis management.
Establish clear workflows
Set up crisis management protocols in advance, defining roles, responsibilities, and procedures for escalating issues. Regularly practice these with your team so everyone knows what to do and can make swift decisions during a crisis.
Use incident management software
Implement tools like Planner by Tempo to visualize and coordinate multiple response teams effectively. This software aids in better resource management, enhances decision-making, and helps prioritize tasks during a crisis.
Learn from experience
Regularly review and analyze past emergency responses to assess their effectiveness and integrate any lessons learned into the updated crisis management plan. This continual learning approach ensures your crisis response strategies evolve and improve.
Enhance crisis management with Roadmunk by Tempo
Crisis management is a critical and often high-pressure process, but using the right tools and a proactive approach will help you mitigate the stress. To effectively roadmap your emergency response plans, leverage Tempo’s Roadmunk software. This high-level overview aids teams in spotting potential gaps and roadblocks that could impede successful contingency implementation.