Key Benefits of Crisis Management Planning

Organizations are still unprepared for crises

Failing to plan is planning to fail. But why then do so few companies implement crisis management scenario planning best practices?

It’s a mystery borne out in too many post-crisis post-mortems.

Indeed, root-cause analyses often identify how the glaring lack of a company crisis management plan and contingency and crisis management competency led to a poor incident response.

What’s the excuse? Well, one often hears from senior leaders that they couldn’t possibly plan for crisis scenarios. And so, they simply jettison all crisis management plan steps entirely.

Why you need to begin crisis management scenario planning

This line of thinking is ludicrous and self-defeating – as countless crisis responses have demonstrated.

Nevertheless, senior leaders might still need a run-down of the benefits of the crisis management plan to motivate investment in resources for the critical event management competency.

Here are the key benefits:

Helps identify threats early.

One of the more salient benefits of crisis management planning is the risk assessment and threat intelligence processes contribute to the development of a culture of organizational resilience, by unearthing where threats lie before an incident occurs.

In other words, crisis management scenario planning isn’t only about being better equipped to effectively respond to specific incidents. Developing a crisis management scenario plan also helps teams identify potential threats as they plan and game out the tasks, communications, and information needed to deal with those threats.

Increases the wellbeing of your employees and the public.

What’s more, crisis management planning (including testing and updating) yields better optimized incident response solutions. Those solutions, in turn, drive better response outcomes, including better financial outcomes.

An Oxford Executive Research Centre study from the early 2000s, for instance, showed that the publicly traded companies who were able to execute their disaster recovery plans reduced the initial negative capital impact of a crisis by a whopping 60 per cent.

On the other hand, those unable to execute plans had initial losses equivalent to 11 per cent of their capitalization and average stock price losses of almost 15 per cent.

That’s significant.

Nor is the ROI just financial.

Crisis management planning also helps organizations improve the wellbeing of employees and the safety of the public at large. If you were sitting on a stockpile of hazardous materials, for instance, it would simply be foolhardy not to prepare a contingency plan for an accidental leak or contamination.

Protects your company from legal exposure

It’s likely to be criminal, as well.

Indeed, another advantage of crisis management planning is that it can help firms mitigate potential legal exposure in the case of a crisis – direct exposure to the organization as well as to its senior stakeholders.

In certain industries, planning is often mandated. Forgoing mandatory planning requirements opens organizations in those industries to the threat of fines and penalties.

Limits impact and helps maintain business continuity

What’s more, it’s not uncommon that a crisis will shut down operations – if only for a few hours. But even those few short hours entail revenue loss, with adverse effects on business continuity.

And so, without proper business continuity management and planning solutions, those few hours might stretch out into days, maybe even weeks.

Effective crisis management planning, on the other hand, can help minimize downtime, which increases productivity and revenue.

Maintains your reputation

A final incentive to plan, especially your crisis communications, is the avoidance of significant reputational damage.

Publics (including regulators and policymakers) might be forgiving if an organization is hit by a major crise for which it was prepared, but hardly to be so if that company failed to have a response plan for a likely scenario, e.g., natural disaster, security breach, or other information security crisis.

Communication during a crisis

How to spot such a botched response? Well, it’s likely to feature spectacularly, inadequate business communication during a crisis.

Crisis communication itself refers to the collection, processing, and dissemination of information required to address a given crisis.

Why do crisis communications go awry?

Well, without adequate preparation, it’s too easy to get crisis communication wrong. After all, they’re too many inherent challenges to communicating during a crisis. The most significant of these include:

1. Lack of situation awareness often results from inability to communicate long and short-term goals, functions, capacity, and resources. Uncertainty and worry can result from resources arriving as a surprise – or not arriving at all. Here, dynamic information central to the task at hand isn’t relayed due to communication problems.
2. Clogged communication pathways can occur when information is relayed but problems arise with finding the right person to contact. Here, information gets “stuck.” Staff might become overloaded with information of unclear provenance; and/or informal communication paths form, but often hinder the cohesion of the operation. Researchers have found that it’s often a lack of practice in informing others about own activities that clog communication pathways.
3. Poor communication forms and content. Similarly, time-consuming and ineffective forms of communication can also bog down operations. For instance, when adequate documentation is lacking, the hand-over of roles becomes more laborious, as it is unclear what information other actors need.
4. Lack of a common ground. When multiple parties are involved in crisis response, different opinions and ideas about fundamental concepts often occur. This results from the different communication styles of different organizations. Staff rotation might also affect communication since it takes time for people to get to know each other.

Using the best crisis management software to implement and update crisis management plans

How then to mitigate the challenges and recoup the benefits of crisis management and crisis communication planning?

That’s where digital critical event management technology comes in. These solutions are needed to establish a process for gathering, analyzing, sharing, and managing crisis-related information and intelligence. Generic capabilities to enhance the crisis management planning capability include:

• Rapid plan and team activation. Leverage pre-configured crisis playbooks and checklists to allow quick activation and dispatch of your crisis response teams. Automate and track task allocation to ensure everyone knows what to do so you can restore normal operations ASAP.
• Easily communicate and share information. Built-in communication and collaboration tools like chat, email, SMS, and voice messages make it easy to work in real time with your team, to better coordinate your response and keep everyone informed.
• A central location for incidents. Monitor and generate crisis response tasks, as well as log and share updates, decisions, facts, and assumptions. Produce situation reports and save time briefing stakeholders on the latest.

Finally, crisis management and crisis communication planning, as we’ve seen, is easy to put off until it’s too late. To ensure resilience, senior leaders will, therefore, need to marshal the necessary resources to develop a planning competency.

What’s the ultimate benefit? As we’ve attempted to lay out, the benefit of crisis management planning is that it helps organizations save time during a crisis. Rather than deciding what to do, crisis teams can focus on execution and restoring services quickly.

To learn more about how digital crisis management software comes in handy, check out Noggin for Crisis Management.