Examples Of Crisis Management
| Crisis | Impact on Business | Crisis Management |
|---|---|---|
| Natural Disaster | Can cause massive physical damage, dislocation of staff, shut down of operations | Implement disaster recovery plan, insurance assessment, business continuity planning |
| Product Recall | Loss of consumer trust, major financial losses, reputational damage | Swift recall of compromised products, public communication and quality assurance |
| Oil Pipeline Protests | Can halt business operations, reputational damage, financial losses | Engage in dialogues with stakeholders, develop communication strategies, & mitigation plans |
| Financial Crisis | Major financial losses, downsizing of staff, loss of customer confidence | Implement cost cutting strategies, corporate restructuring, and strategic financial planning |
| Data Breach | Loss of customer trust, potential legal issues, financial penalties | Implement cybersecurity measures, communicate transparently with customers, and fix vulnerabilities |
| Leadership Scandal | Reputational damage, loss of investor trust, drop in stock price | Transparent communication, appropriate disciplinary actions, and rebuilding of corporate image |
| Industrial Accidents | Potential loss of life, property damage, operational shutdown | Emergency response measures, insurance claims, safety audits |
| Employee Strike | Operational disruptions, reputational damage, potential financial losses | Negotiations with works councils, corporate communication, contingency planning |
| Competitive Disruption | Loss of market share, financial losses, need for strategic shift | Understand competitor strategies, innovate products, adjust business model |
| Regulatory Changes | Potential costs due to compliance, change in operations, potential fines | Understanding new regulations, adjusting business processes, compliance assurance |
Businesses and organizations of all sizes can be affected by crises. Either they affect the company directly, such as a natural disaster or product recall, or they emerge from environmental and social issues that affect society more broadly, like protests over an oil pipeline in North America.
A crisis is a set of conditions that pressure managers to address unanticipated questions and events that could negatively impact their operations. These include financial losses, compromised procedures, damaged equipment, lost talent pressure, and reputational damage. Crisis management planning helps an organization anticipate these challenges and develop processes for addressing them effectively.
Summary
• Learn from the ways other companies have dealt with crises
• Increase your company's reputation post-crisis
• Save money and time if a crisis ever should occur
Unfortunately, many companies do not consider this until after the fact — when they launch a review to understand how they handled a specific incident — or worse: They do not develop a crisis management plan.
A crisis is an incident that has the potential to endanger your project. This includes environmental and social happenings, such as natural disasters or political protests; supply chain disruptions; loss of key talent; reputational damage (e.g., client complaints); terrorist attacks; outbreaks of diseases or viruses; product recalls; fatalities or severe injury onsite due to equipment failure; chemical spills affecting nearby communities; construction accidents involving third party contractors; disruptions in utilities (water, power, telecommunications) and transportation networks; financial crises that affect critical resources (e.g., capital markets shutting down); or cyberattacks that shut down systems or release sensitive information.
Crises generally have three phases: activation, management, and recovery.
Activation starts with getting up to speed on what is happening, confirming how it affects your operation, and mobilizing resources to address impacts.
Management involves tracking developments, initiating communications with stakeholders, including employees, customers, investors, and suppliers; assessing capacity for containment or mitigation; preparing sites or businesses for adverse conditions (e.g., opening an evacuation center); securing equipment or sensitive information; arranging support from local authorities (e.g., police protection during a demonstration) or external sources (e.g., insurance policies covering damage from rioting mobs). It may also entail stepping up security measures at critical sites where relevant facilities are concentrated, such as laboratories containing infectious organisms in biotechnology companies or oil wells located in politically unstable areas.
Recovery starts when the crisis is controlled and ends when the business or organization has returned to normal operations.
A guide to crisis management
The goal of crisis management is to minimize the negative impacts of an incident on your project so that you can resume normal operations as quickly as possible. This involves three key activities:
Containment: Preventing a situation from worsening by taking appropriate steps to protect people, property, and the environment.
Mitigation: Reducing the consequences of an incident by limiting damage, repairing any damage that has occurred, and implementing measures to prevent future incidents.
Restoration: Returning the impacted area to its pre-crisis state as closely as possible.
For an organization to effectively manage a crisis, it is essential to have a crisis management plan. This document should outline the oorganization'sresponse procedures for different problems, as well as the roles and responsibilities of key personnel. The crisis management team should also practice responding to simulated concerns and be prepared to act quickly and effectively when an incident occurs.
There are many things that businesses can do to prepare for a crisis, including:
1. Identifying potential threats or vulnerabilities that may have emerged.
2. Developing a crisis management plan. The crisis management plan should outline the oorganization'sresponse procedures for different types of crises, as well as the roles and responsibilities of key personnel. The crisis management team should also practice responding to simulated concerns and be prepared to act quickly and effectively when an incident occurs.
3. Training employees on responding to a crisis and empowering them to take appropriate steps when a situation arises.
4. Being aware of local, national, and global events that may affect the organization or its stakeholders (e.g., political unrest or natural disasters) and planning how these events could impact your business operations.
5. Ensuring that IT systems can be shut down orderly in a crisis so that sensitive data is not compromised. It may also be necessary to move equipment into secure locations where it will not be accessible by unauthorized personnel during a crisis.
6. Implementing effective security measures for protecting company property, including storing sensitive documents away from office areas where they are less likely to be accessed during a disruption event (e.g., locked in a drawer at the home office).
7. Ensuring that physical and IT security measures are in place so that sensitive company data and equipment cannot be accessed by unauthorized personnel during a crisis (e.g., locking server cabinets or filing cabinets if they contain essential documents).
8. Keeping hard hats, safety glasses, and other necessary tools on hand to ensure personnel can safely carry out their duties during an incident (e.g., repairing damaged property).
9. Develop procedures for how people will communicate with one another about an incident, including details about how different types of stakeholders will be contacted (e.g., employees, clients, executives, or suppliers) and which communication channels will be used to reach them (e.g., email, text message, social media).
10. Preparing an emergency communications plan that will be activated if the osevereorganization'snormal communication channels are unavailable (e.g., a power outage or telecommunications failure).
11. Securing physical evidence such as documents, computer hard drives, and other items that could be used in legal proceedings following a crisis. Protecting electronic data from unauthorized access or theft may also be necessary, such as by password-protecting files or encrypting sensitive information.
12. Planning for the safe evacuation of personnel in a crisis (e.g., fire, toxic fumes).
13. Developing procedures for shutting down IT systems, moving equipment to secure locations, and protecting sensitive data in a crisis (e.g., backup copies of files and offsite storage).
14. Arrange insurance coverage to protect your business against potential losses caused by a crisis (e.g., property damage or business interruption).
15. Review the crisis management plan regularly and update it as necessary to reflect changes in the organization or the environment.
Developing a comprehensive crisis management plan is an essential step for any business, but it is not a task that should be completed once and then forgotten. Instead, the project should be reviewed regularly and updated to remain relevant and practical. By taking these steps, businesses can reduce the risk of experiencing negative consequences following a crisis and ensure that they are prepared to deal with it quickly and effectively.
1. Identify potential crises.
2. Develop a crisis management plan. The plan should include the following:
3. Keep employees informed about the company's crisis management plan by providing regular training on how to respond in an emergency, empowering them to take appropriate action when necessary.
4. Take steps to protect sensitive data by backing up files regularly, encrypting certain types of information (e.g., trade secrets), and keeping backup copies off the premises if possible.
5. Establish procedures for shutting down IT systems in an orderly manner without causing damage or leaving equipment inaccessible during a disruption event (e.g., a power outage or fire).
6. Store essential documents in a safe place where they can be accessed easily in the event of a crisis (e.g., offsite storage). It may also be i
7. Ensure that physical and IT security measures are in place so that sensitive company data and equipment cannot be accessed by unauthorized personnel during a crisis (e.g., locking server cabinets or filing cabinets if they contain essential documents).
8. Keeping hard hats, safety glasses, and other necessary tools on hand to ensure personnel can safely carry out their duties during an incident (e.g., repairing damaged property).
9. Develop procedures for how people will communicate with one another about an incident, including details about how different
The examples of crisis management given above are just a few of the many steps businesses can take to protect themselves from potential negative consequences. By being proactive and putting a comprehensive crisis management plan in place, companies can reduce the risk of experiencing significant damage following a crisis. However, it is essential to remember that no goal is perfect, and incidents can still happen. Therefore, it is also necessary to have a response plan ready to implement in an emergency. This should include clear instructions for how employees should respond and what actions need to be taken to mitigate the damage caused by the crisis. By accepting these precautions, businesses can minimize the negative impact a problem can have on their operations.
Questions
1. What are some examples of crisis management in the public industry?
2. How do you maintain transparency when you're in the middle of a crisis?Â
3. Have you ever handled a PR event in which one of your employees made controversial remarks online or offline, and how did it impact the company's reputation?Â
4. Why is crisis management important to businesses nowadays?Â
5. How can you handle media inquiries after something terrible has happened to your business (e.g., hack, job termination)?
I graduated from the Family and Consumption Sciences Department at Hacettepe University. I hold certificates in blogging and personnel management. I have a Master's degree in English and have lived in the US for three years.
