7 critical steps to crisis management

BY BRUCE CONDIT

Vice President, Allegiance Capital 
Before a crisis strikes, business owners should think about how a disaster would impact employees, customers, suppliers, the general public and their company’s value. A crisis can strike any company anytime, anywhere. Advanced planning is the key to survival.
Daily headlines are filled with companies dealing with crisis. Is your company prepared? Just as BP learned with the gulf oil spill and Malaysian Airlines learned through two disasters, a crisis can strike at any time. However, unlike Fortune 500 firms, smaller companies are often unprepared and usually do not have a crisis plan in place. They believe it will never happen to them. But, what if it does?
How well would your company fare if you died in an auto accident on the way to work? Who would assume your role and continue operations? Suppose you own a retail company and you discover that one of your primary products or services has created a major health issue–what would you do? If you operate a construction company and an industrial accident has killed several key members of your team–how would you react?
Before a crisis strikes, business owners should think about how a disaster would impact employees, customers, suppliers, the general public and their company’s value. A crisis can strike any company anytime, anywhere. Advanced planning is the key to survival. Here are seven critical steps to crisis management that every company should have in place regardless of its size.
1.Have a plan–Every plan begins with clear objectives. The objectives during any crisis are to protect any individual (employee or public) who may be endangered by the crisis, ensure the key audiences are kept informed, and the organization survives. This written plan should include specific actions that will be taken in the event of a crisis.
2. Identify a spokesperson–If the crisis could potentially impact the health or well-being of customers, the general public or employees, it may attract media attention. To ensure your company speaks with one voice and delivers a clear consistent message, a spokesperson must be identified as well as prepared to answer media questions and participate in interviews.
3. Be honest and open–Nothing generates more negative media coverage than a lack of honesty and transparency. Therefore, being as open and transparent as possible can help stop rumors and defuse a potential media frenzy. This transparency must be projected through all communications channels: news interviews, social media, internal announcements, etc.
4. Keep employees informed–Maintaining an informed workforce helps ensure that business continues to flow as smoothly as possible. It also minimizes the internal rumor mill that may lead to employees posting false reports on social media.
5. Communicate with customers and suppliers–You do not want customers and suppliers to learn about your crisis through the media. Information on any crisis pertaining to your organization should come from you first. Part of the crisis communications plan must include customers and suppliers and how they will be regularly updated during the event.
6. Update early and often–It is better to over-communicate than to allow rumors to fill the void. Issue summary statements, updated action plans and new developments as early and as often as possible. Remember that with today’s social media and cable news outlets, we live in a time of the 24/7 news cycle. Your crisis plan must do the same.
7. Don’t forget social media–The Ebola crisis and other recent major news events have all confirmed that social media is one of the most important channels of communications. Be sure to establish a social media team to monitor, post and react to social media activity throughout the crisis.
A crisis that is not managed well can wipe out decades of hard work and company value in a matter of hours. A well-managed crisis confirms that your company has the processes and procedures in place to address almost any issue that may develop.
Another critical component of crisis management planning is the establishment of a succession plan. You should clearly outline the necessary steps to follow if you suddenly become unable to perform your duties. This plan may include selling the company, or transferring ownership to family members or key employees.
What is most important is that you create the crisis management plan when everything is running smoothly and everyone involved can think clearly. By planning in advance, all parties will have time to seriously think about the ideal ways to manage different types of crises.
As you develop your crisis management plan, seek advice from the experts that include your leadership team, employees, customers, communications experts, investment bankers, exit planners, lawyers and financial managers. Each of these individuals can provide you valuable insight that could be critical should a crisis strike your company.
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