Tuesday, September 8, 2020
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How Can You Manage a Business Crisis?

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N. Pompi Devi
Mountains aren't just funny, they're hill areas.

When I think of crises, the first thing that comes to mind is chaos. In terms of business, a crisis can generally lead to great damage no matter the industry, size or resources.

Now a crisis can be managed if you first of all have a plan to follow through. If you completely go bonkers in the face of an unplanned business crisis, well you most likely won’t be able to overcome it.

By implementing a crisis management plan, keeping note of the stages of crisis and having the right people by your side, you can work through the crisis. Before we delve further, let’s understand what a business crisis is about.

What is a business crisis?

A business crisis refers to an unplanned circumstance or situation that can possibly tarnish the reputation and work of a company. It can lead the company’s finances down the gutter and damage the business operations. The employees too will be harmed in the whole situation.

A business crisis can be severe and as such, it is very important that you prepare yourself and your team to be fully ready to face such a situation.

You and your team can be armed to do so by first laying down a crisis management plan.

What is a crisis management plan?

A crisis management plan involves the management of a crisis. It involves steps that you must be aware so that you can be prepared.

1) Pre-crisis

This very first step involves creating a crisis management plan, hiring and training your crisis management team and practice exercises for implementing the plan. An additional part in this step is to draft crisis communication messages. This helps to save time when an emergency actually take place.

2) Crisis Management

This step involves dealing with and responding to the crisis. This is the time when your crisis management plan is put into action. Pre-crisis management messages are released, employees and stake holders are contacted, public and company safety is prioritized more than the usual.

3) Post crisis

Once you have overcome the crisis, your work is hardly done. It is important for you to remain in contact with your employees and stakeholders and be available to answer any questions. It will also be best if you send updates to these parties.

Afterwards, work with your crisis management team and analyse how your crisis management plan worked out. If there are any areas in the whole plan which requires improvements then it should be integrated for future emergencies.

How to create a crisis management plan?

The following factors must be kept in mind while creating a crisis management plan.

a) Note down all the probable types of crisis.

b) Identify the impact that each type of crisis will have on your business.

c) Contemplate the actions you will need to take to resolve each type of crisis.

d) Settle on who will be involved in the actions for each type of crisis.

e) Develop resolution plans for each type of crisis.

f) Train everybody in order to be attuned to the plans that are set in motion for emergencies.

g) Review and update your plans regularly.

Stages of crisis

Along with planning crisis management plan, it is also important to be aware of the stages of crisis. These stages occur during a crisis but will help you to determine how you should respond to the situation at different point of times.

1) Warning

Crisis can never be determined or predicted beforehand. But there are often signs that you should look for and keep into account which will give you a warning. These warning signs can be associated with a wide range of factors such as employees’ behaviour, company finances, etc.

2)  Risk Assessment

In this stage, all the key players in your company will start assessing the damage and resulting problems. The impact of the crisis on your company, employees and customers are discussed in details so that everyone will be prepared for the worst-case scenario.

3) Response

Once you have reviewed the risks, everyone involved will be notified of the emergency and you will be able implement the necessary crisis management plan.

This stage involves a lot of communication in order to notify the necessary people of the actions that must be taken in order to overcome the crisis.

4) Management

Next comes the management phase. This is when everyone involved in rectifying the crisis comes forward to work on managing the chosen resolution plan, the immediate effects of the event, and any new or worsening effects that arise.

This stage involves the same type of open communication that you used in the response phase to ensure all employees, customers, and stakeholders are up to speed on the state of the business.

5) Resolution

Once you have reached this stage, everyone involved must have completed or possibly finished all their duties. All the necessary plans will be initiated in order to bring your company back to normal operations. The crisis should most probably be brought under control.

6) Recovery

As you move from the resolution phase into the recovery phase, your resolution plans are well underway and your business is getting back on track. This stage includes getting all employees back into their day-to-day operations and ensuring customers are set up for success with your products once again.

It’s very important to analyse the results of your crisis management plan during the recovery phase as well. This way you can determine how you feel the situation was managed and how you plan to avoid another similar situation from happening in the future.

What are your thoughts on this? Comment down below!

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