Crisis management is an essential function in organizations. Most companies face a crisis at some point and, if they fail to respond to it properly, it can harm business results, stakeholders and the company’s public image.
What is crisis management?
A crisis can be defined as any significant threat to operations that can have negative consequences if not dealt with properly. In management, a threat is the potential damage that a crisis can cause the organization, its stakeholders and its reputation. A crisis can result in three related threats:
- Public safety
- Financial losses
- Damage to reputation
Serious crises, such as industrial accidents, can result in injuries and even the loss of life. Crises often lead to financial losses, diminished purchase intentions, interruptions in operations (such as closing a factory while investigating an accident) and potential lawsuits or payments. All crises imply a threat to an organization’s reputation.
Effective crisis management must address these three threats. The overriding concern should be public safety, as failure to address this intensifies the damages caused by a crisis. Reputation and financial losses should be considered only after addressing public safety concerns.
What is a crisis management plan?
A Crisis Management Plan (CMP) is a document that describes the processes that an organization should use to respond to a critical situation that could adversely affect its profitability, reputation or ability to operate. CMPs are used by business continuity, emergency management, crisis management and damage assessment teams to prevent or minimize damages and provide guidelines for personnel, resources and communications.
Defining a crisis and type of crisis
A crisis requires quick decisions to limit damages to an organization, its stakeholders and the public. By providing a well-documented set of responses to possible critical situations, a CMP allows an organization to act quickly in the event of a major incident.
Potential crises include:
- Natural disasters like hurricanes, earthquakes, tsunamis and volcanoes;
- Other serious climatic events such as floods, snowstorms and droughts;
- Biological risks, including foodborne illnesses and pandemics;
- Accidental events caused by humans, such as fires, explosions, collapse of buildings or structures and hazardous material spills;
- Intentional human-caused events such as robberies, violent acts and fires; and
- Technological events such as disruptions and cyber attacks.
What to include in a crisis management plan
Crisis management planning includes preparation, process development, testing and training.
To create an effective CMP, you should follow these steps:
- Determine the crisis management team members.
- Document the criteria for determining whether a crisis has occurred.
- Establish monitoring systems and practices for early warning of possible crisis situations.
- Specify the spokesperson in the event of a crisis.
- Provide a list of the main emergency contacts.
- Document who should be notified in the event of a crisis and how this notification should occur.
- Identify a process for assessing the incident, its potential severity and how it will affect the building and employees.
- Identify procedures to respond to the crisis and define safe places where employees can go in an emergency.
- Develop a strategy for posting and responding on social media.
- Develop a process to test the effectiveness of the crisis management plan and update it on a regular basis.
The importance of a communication strategy for crises
Communication is essential for overcoming crises, as it keeps the necessary people informed, from a local action in a single office to a global response. As the crisis develops and evolves, the organization should update its communications.
During a crisis situation, employees look to management for leadership and guidance. Without adequate communication, people may speak or act erroneously. Lack of communication can also result in safety problems.
An organization should designate a crisis communication team. All communication should be clear, concise and honest. In the interest of agility, an organization may proactively create a communication model with possible scenarios, determining the appropriate communication channels, and then add the necessary information, should a real incident occur.
Testing and updating your plan
Once finished, the crisis management plan should remain a living document. This means distributing it to employees, implementing training and testing and updating the CMP on a regular basis.
Training sessions should be conducted so that everyone involved knows what to do in the event of a crisis. Tests range from exercises to complete simulations. After a test, it is important to review the results, discuss what worked and what didn’t, and make any necessary changes to the plan.
Standards are excellent tools for organizations to improve crisis management planning. They help organizations manage business interruptions and improve resilience.
The British Standards Institution (BSI) provides a crisis management standard, BS 11200: 2014. The standard provides guidelines to help plan, establish, operate, maintain and improve an organization’s crisis management capacity. The standard is relevant for any size or type of organization, according to the BSI, and it includes sections on basic concepts and principles in crisis management, leadership, decision-making and communications.
In addition, the International Organization for Standardization (ISO) provides a number of emergency management standards in its ISO 223xx series, including ISO 22320: 2011, “Societal security — Emergency management — Requirements for incident response” and ISO 22301, which provides a business continuity management system.
It is important to note that, depending on the sector, a crisis management plan may also be called a business continuity plan, disaster recovery plan or a contingency plan.
Processes, procedures, training and incidents can be managed much more effectively with a software solution. With a solution, your crisis management plan ceases to be something static and comes to life, taking on an active role like other processes in your organization. Discover SoftExpert Excellence Suite and learn how it can help you in crisis management.