Management of crisis is a critical aspect of organizational stability and resilience. Every organization, sooner or later, does have to face crises that emanate from internal mismanagement, external pressures, or unforeseen incidents. Knowing how to manage crisis within an organization can be the difference between recovery and failure. This article takes into consideration various aspects relating to crisis management as strategies, examples, and utmost principles to assist organizations in making the best use of this given situation.
Crisis management involves the designs and strategies an organization employs in handling a surprise event that disrupts its normal activities. It generally involves preparation, response, and recovery. This way, the organization ensures it can sustain some functions and become stronger to perform following a crisis event.
There are many crises that an organization may encounter. They are categorized as follows:
These result from bankruptcy or a severe lack of cash flow.
Reputational Crisis:
These are caused by scandals and negative publicity.
Caused by the disruption of a supply chain or failure of technology.
Floods, earthquakes, pandemics, etc.
Labor strikes, employee misconduct, mass layoffs, etc. Understanding the type of crises provides an organization with a more accurate strategy of developing proper business crisis management.
Here are some of the steps to manage a crisis:
A crisis management plan is required to properly respond to situations. The following should be in the given plan:
Determine all the risks that could cause a change in the overall action of the organization. This should be made in line with a comprehensive analysis of all the internal and external situations.
Crisis Management Team Formulation:
Establish a specialized team to be entrusted to manage the crisis. The members should come from departments like HR, legal, communications, and operations.
Communication Plan:
Describe the communications process that would occur during an incident. This includes communication inside the organization with the employees and outside the organization with the stakeholders and media.
The proper response to a crisis handling requires preparation. Formal and constant training sessions and simulated exercises might enable participants to learn their roles as well as what is expected of them in the case of a crisis. Such scenarios should resemble possible events that may occur in the organization for better preparedness and responses.
Organizational health monitoring can be proactive and, hence indicate potential crises for their early detection before they grow into an actual crisis. Early detection allows the swift action of damage control by an organization. Some of the components of monitoring are regular audits, employee feedback, and market analysis.
Proper and uniform communication is crucial at the time of a crisis. The absence of effective communication leads to panic, which creates further problems. Some of the needed communication strategies include:
Be Transparent: Explain the crisis and its effect on the organization.
Have a Single Point of Contact: Appoint a person to handle all the external communication. This ensures a consistent message.
Regular Updates: All stakeholders need to be updated regularly about the developments. Frequent updates help build trust and evidence that the organization is serious about ending the crisis.
Once a crisis has been resolved, an evaluation of the process used in responding should be done. This would be looking at what went well and what may improve. Capturing learnings from this is key to aiding further shaping of future strategies around managing crisis and improving organizational resilience.
The Organization crisis examples provide an insightful understanding of best practices in crisis management. A few examples can be described:
One of the major crises that engulfed Johnson & Johnson was the tampering with a few bottles of Tylenol, which resulted in several deaths in the 1980s. The organization immediately recalled more than 31 million bottles, and a country-wide communication campaign was initiated. The cause always surfaces when there is transparency and responsibility during a crisis. Thus, public trust came back to the organization as they were responsible for open communications.
Another major severe business crisis management failure was the BP oil spill in 2010. It was criticized for being slow in its initial response and less transparent; it got bad worse because of ineffective communication and deep reputational damage. Timely and effective communication stands out as a critical element in such cases.
In 2018, Starbucks faced a crisis when two black men were arrested in a Philadelphia store for trespassing. This led to quite a public outcry and accusations of racial profiling. Starbucks responded by closing all its stores for one day to hold race-biased training for employees. This kind of proactive measure showed accountability and interest in clearing the issue at hand, as this disaster in public relations would have instead been a learning moment.
Management by crisis is an organizational style that embraces the reactive rather than the proactive mode of operation. However, managing crises at the moment may be necessary, organizations should not pursue an organizational culture of crisis management. Instead, they should adopt the following:
Come up with strategies that will prevent any situation from becoming a full-scale crisis.
Adopt an approach devised for building resilient cultures in organizations that take change and cope with challenges.
Effective crisis management can help bring an organization out of a tight situation. Here are five strategies organizations should have:
As the crisis erupts, it is very important to determine who is doing what and when during the crisis. Assign a clear head to lead each part of the crisis, thus making the head accountable and making decisions promptly. Every member should be aware of their roles and their specific contribution toward the final response.
Encourage internal openness. The workforce has to feel secure enough to raise awareness of any issues that they perceive might eventually turn into full-blown crises. Meetings and updates can facilitate keeping the door open with high levels of trust among the diversified members of the team.
Utilize technology to facilitate crisis management. Leverage any real-time monitoring, data analysis, and communication tools. This may prove especially useful with social media to spread information faster and concerns throughout the public.
Involving the stakeholders in the process may give the body a deeper insight and support from the employees, customers, suppliers, and sometimes members of the community who give the organization insight into their perspectives and allow the organization to make better-informed decisions so that it can ride challenges better.
Crisis management is not a one-shot effort. Ensure the plans are reviewed and updated concerning the new threats and lessons learned from past crises. This commitment to continuous improvement will greatly enhance the organization's resilience and preparedness. After all, crises are not avoidable but the response presented by an organization may make the difference between success and failure in the face of such situations.
Crisis management is a significant organizational strategy. It assists companies in better-managing crises by preparing themselves, making proactive plans ahead of time, and rearing a culture that is out and open as well as resilient. The experiences of crises over the years provide companies with opportunities to build more stringent frameworks for the face of what is yet to come. British Academy for Training and Development is offering top-notch risk management courses.