A s your company grows, the risks of a crisis taking place grow as well. But crises can take place in any businesses, of any type or size. Let’s take the COVID-19 pandemic as an example. This is a major crisis that takes place at a global scale, affecting almost every business out there, one way or another.
It’s not usually something you’re prepared for, but once it happens, you sure do wish you were.
Instead of finding out what to do as the crisis unfolds, it’s better to have a crisis management plan laid out.
- What Is A Crisis and Why plan for One?
- Crisis Stages
- How to Create a Crisis Management Plan: Step by Step
- Why Should You Have a Crisis Management Plan?
- Crisis Management Tips
This will help you execute the appropriate steps to reduce the negative effects of the crisis. With the proper crisis response strategies, your company can counter any misinformation and head in the right direction.
What is a crisis and why plan for one?
Before we lay out the steps for a crisis management plan, we have to understand what a crisis is.
A crisis inside business is an event that has the potential to negatively affect the company, by negatively impacting its employees, finances or reputation.
A crisis can be caused by internal factors (such as employees making certain public statements or not doing their job properly) or external factors (such as natural disasters).
One of the most common issues is that entrepreneurs, CEOs, directors and managers often think that such events won’t happen to them.
“My employees would never do such a thing.”
“That’s never going to happen to us.”
But that’s not the case at all. It will never happen to you until it does! If you are here before any crisis ever hit your business, congratulations. If you’re here as the crisis unfolds… better late than never. Keep reading and you’ll find out everything you need to know. We’re sure you’ll pull this through!
Surely, the possibilities for a crisis are endless in all cases, regardless of the type of company you’re running. But some apply better to certain types than others.
For example, if you own a pharmaceutical company, a possible scenario is that a new product you’ve released is having severe negative effects on the customers and it’s made the news.
In crisis management, be quick with the facts and slow with the blame.
Leonard Saffir, Public relations executive
The crisis management process can be categorised in 3 main stages, the pre-crisis, the management and response stage itself and the post-crisis.
According to Everbridge, a crisis unfolds itself in 6 stages. In a real case scenario, you won’t be able to go through all these stages without a crisis management plan in place.
First you have the warning phase. The crisis did not happen yet, but there are warning signs about it. For example, you might hear at the news that a hurricane is about to strike.
Acting as soon as possible can help you greatly reduce the damage produced by the crisis.
Unfortunately, you can’t always predict when a crisis will happen, but there are almost always signs that it will, whether they are in the company’s financial records or in past or recent employee behaviour.
Risk assessment stage
The risk assessment stage begins once the crisis starts to unfold. This is when you’ll sit down with your team to analyse what exactly is happening, what are the risks and estimate the damage and how the crisis will impact the business, it’s employees and it’s customers.
This stage involves a lot of communication with your team.
Once the risks have been assessed, it’s time to decide which plan to implement. Once everyone has been notified about the decision, you start putting the plan in action. This stage involves open communication with your team so it’s a good idea to have a detailed business communications strategy.
This is the stage in which you actually execute the plan, with the intent to reduce immediate effects of the crisis and possible future issues that may arise.
This stage also involves a lot of communication to ensure that everyone is on the same page, from employees, to stakeholders and, ultimately, clients.
At this stage, everyone has fulfilled their duty and hopefully, the crisis is over or nearly over and everything is under control. It’s at this point when you’ll start to discuss how to recover from the crisis.
If you’ve planned well ahead, you’ll know exactly what steps to take.
Finally, once the crisis has passed, your recovery plans are already in action and everything starts to get better and hopefully back to normal. Employees return to their daily activities, sales start to go up again and finances start to recover.
How to create a crisis management plan: Step by Step
Here’s how to lay out a business crisis management plan in 6 easy steps. Each step might include multiple substeps which you have to take care of, depending on the size and type of your company.
1. Identify possible types of crises and their impact
First, make sure you can clearly differentiate between a crisis and something that isn’t a crisis.
You’ll need to be able to clearly define what a crisis means for you. You can have incidents (which are often single occurring events which unfold in a short amount of time), you can have emergency situations (which might be more stressful but won’t heavily impact the business’s finances or reputation) and finally, you can have a critical situation which will heavily impact your business.
There are many types of crises that can affect your business. Some might fit more to your type of business than others. In your general crisis management plan, you should lay out multiple plans for all possible crisis scenarios.
Here are some of the most common types of crises that your company might face:
- Natural disasters such as earthquakes, hurricanes, or other severe weather related issues and bio-hazards such as the COVID-19 pandemic
- Human error and malpractice (such as fire, explosions or hazardous material spills) or intentional human-caused events (such as robberies or violence)
- Technology related issues such as power outage or cybernetic attacks
- Financial related crisis, when your product or company experiences a sudden drop in demand, for example Tourism during the
Many of these can differ from one case to another and can include multiple subcategories.
For example, human error or malpractice issues can be either related to personnel or can be organisational.
In the first case, an employee causes the issues which leads to negative consequences (person forgets to uncover a sensor after cleaning an airplane, leading to a plane crash) and in the second case, management is responsible for the consequences (requests by employees to replace damaged or old equipment are ignored by management, leading to a plane crash).
Other crises might happen solely online. Social media is a very powerful tool these days, both for promoting a company or defaming one. The trigger can be something as insignificant as an employee, manager or shareholder tweeting something controversial.
Surely this can be classified as “professional negligence”, but it wouldn’t be completely fair to call it that. This is also pretty hard to prevent, as in the US at least it’s difficult to tell people what they can and can not say, as far as the first amendment dictates, at least.
In a crisis, don’t hide behind anything or anybody. They’re going to find you anyway.
Bear Bryant, former Alabama football coach
Once you’ve laid out the possible crisis scenarios, you have to identify their potential impact. How will they affect the business? Which are the areas / sectors that will suffer the most? What financial loss can each crisis ultimately lead to?
Possibilities are endless, so a brainstorming session will be helpful. Once the ideas are laid out, you can start arranging them depending on how likely they are to happen and how hard they will impact the company.
To be able to go through the entire crisis management process, first you have to determine what causes a crisis in each particular case. Again, there could be multiple possibilities, so it’s important to decide which ones are most likely to happen and why.
It’s very important to know when the activation point is. Is this truly a crisis? Are we executing the plan now?
2. Set up roles, teams and communication
Having a crisis management team is essential for properly executing a crisis management plan.
It might sound expensive… but would you rather let your company take a major PR hit causing huge loss in profit, or prevent that from ever happening? A major crisis can be far more expensive.
In some cases, you might want to consider working with a professional crisis management team. However, you can also develop your own, internally, which can be even more effective if done properly.
- Crisis Management Advisor: Someone with experience in dealing with crises that can help manage the team or train someone to manage the entire team.
- Public Relations Specialist: Someone with experience in dealing with media coverage in stressful circumstances such as a crisis.
- Human Resources Advisor: Someone with experience in managing the staff properly and that can ensure proper communication between the teams.
- Legal & Financial Advisors: Depending on the type of crisis you are facing, you might require the help of a legal or financial advisor. They can ensure your actions are not wrong from a legal point of view, or that certain actions won’t affect your finances even more.
- Safety Advisor: Again, depending on the scenario and the amplitude of the crisis, you might require assistance from a health, security or environmental advisor.
These are just some of the top roles, but your teams will end up with a lot more roles than that.
That’s why it’s also a good time to start planning the crisis communications strategy. You’ll need to set up a proper communications channel which will include a very detailed contact list.
Who will contact who? Who will cover the media crisis response? Who is going to be the spokesperson? Who will contact the employees, stakeholders and clients?
3. Set up necessary and actionable steps for each case
Some crises will be different than others. While you will have a general crisis management plan, it’s a very good idea to have separate plans for each type of
In case of natural disaster, for example, you might require an evacuation plan for your employees.
In case of negative PR situations, you might want to focus more on media coverage.
The steps will differ from one case to another. It’s a good idea to follow the ‘if this then that’ methodology. This way you’ll be prepared for many more possibilities.
4. Engage in training and review the plans
Practice makes perfect. Hopefully, you’ll never have to prove your skill. But if you want to be prepared, having a plan isn’t enough.
If you truly want to prepare your business for crises, you’ll have to simulate them to test the plan and how people respond to it.
Users should be familiarized with their roles in a crisis response, from employees and managers to stakeholders. The crisis communications channels should be working flawlessly.
Testing and updating your plan is essential to figure out its effectiveness in a possible real life scenario.
Crisis management should be embedded in a program that the organisation takes seriously such as Quality Control. This will ensure that everyone is aware to some extent that a crisis could happen at any point and that they could help prevent it.
5. Start monitoring
Once you’ve finished everything, it’s time to look out for crises. Don’t get paranoid, but be cautious. The more your company grows, the more partners you engage with, the wider your products spread, the higher the risks for a major crisis to take place are.
Have weekly or monthly reports from different departments and make sure things are under control.
Brand is no longer what we tell the customers it is - it is what consumers tell each other it is.
Scott Cook, director of eBay and Procter & Gamble
Monitoring your brand’s online mentions with a tool like BrandMentions can help you identify when a crisis is about to start, as soon as it happens. This helps you not be taken by surprise and gives you time to execute your plan.
Why should you have a crisis management plan?
According to Deloitte, almost half of the companies ignore key steps to prepare for crises. But why should you bother setting up a crisis management plan?
First of all, you’ll know exactly what you have to do. If you’re serious about it, you might have even gone through some training and have some experience.
Secondly, prevention is better than treatment. By laying out a plan, you’ll be a lot more responsive to possible crisis triggers.
Last but not least, when a crisis happens, it isn’t generally a single event. They happen in a chain reaction or set off a chain reaction of events.
In case of natural disaster, for example, first you’ll have to deal with the employees and possible casualties, then recover financially. This means a safety plan and a financial recovery one. If the disaster is caused by professional negligence, then you can add negative PR to it, which will impact sales and revenue.
Note that a crisis management plan (CMP) might also be referred to as a business continuity plan (BCP) or even a disaster recovery plan, depending on the type of business and the sector it operates in.
A disaster recovery plan focuses solely on controlling the damage in case of a natural or human caused disaster, while a business continuity plan will focus on maintaining the critical business operations, rather than controlling and minimising damage.
Crisis management tips
On an ending note, below are some tips and reminders.
Don’t do too much introduction or definition. This is for you to understand, fine, have it separately somewhere else. The final plan itself must be like a panic button which you can press and get to work and implement it as soon as possible.
Study other crises from similar companies to identify early warning signs and possible mistakes they’ve made along the route so that you don’t repeat them.
Training is useful. Testing is useful. Updating is useful. Train, test and update your plan for crisis management if you want it to be effective.
Don’t mix everything in a single document that is hard to navigate and takes ages to load. Sure, it’s useful to have a roadmap somewhere, be it a table of contents with links to where the section begins, or a navigable mind map with ramifications. But the plans for each scenario should be clearly delimited so that they are easy to pull out and execute
Last but not least, invest in modern technology. It’s faster and it will help you resolve a crisis faster. Let’s take a very basic example. Cybercrime. If your entire company operates on Windows XP in 2020, expect the entire system to be very vulnerable to cybernetic attacks. For companies worried about potential security collapses, the addition of specialist rackmount servers can keep content secure on a fast and accessible server for the entire team to use. And don't forget to use advanced tools to secure your online connection by encrypting it and avoiding personal and corporative information leaks.
Don’t rush to change things too fast, though. You don’t want any other type of crisis to happen in the middle of a transition, when people don’t know how to properly use the new technology yet.
Hopefully, this will help you properly develop a crisis management plan. Ultimately, you might want to seek professional help from an experienced advisor such as Mr. Ian Mitroff or an entire company that deals with crisis management such as Deloitte.