Even though crisis is a fact of corporate life, organisations often fail to prepare themselves adequately. That is despite the clear risks associated with poor corporate crisis management and corporate emergency management, i.e., lack of a corporate crisis management plan and corporate crisis communication plan. Notable risks arising from ineffective crisis management in corporate communication include as harm to stakeholders, material losses, up to and including bankruptcies. Why do businesses take the risk?
One explanation might be that organisations tend to conflate business crises with consistent slow-burn issues. Though the latter might turn into crises if not handled effectively, they are not crises, which are, by definition, episodic and of more significant magnitude.
Indeed, a business crisis constitutes an unanticipated event or issue that disrupts day-to-day business operations; such an event has the potential to create significant financial, safety, security, or reputational harm.
Types of business crises
What then can be done? Well, the task of preparing for, managing, and recovering from a business crisis falls under the banner of corporate crisis management. A crisis management process is one designed to prevent or minimise the damage a crisis can inflict on an organisation.
Businesses can go a long way towards mitigating the damage associated with crises by treating corporate crisis management as a critical business function, with activities implemented for each crisis phase.[i] The phases include:
When building or enhancing corporate emergency management competencies, organisations should also take intelligence gathering and constant monitoring as their default mode, using a suitable crisis management software platform. That entails approaching crisis management as a life cycle, taking a strategy-oriented approach for each of the following stages:
Understanding the crisis management lifecycle will help organisations enhance mitigation, response, and recovery activities. These activities should be catalogued in a corporate crisis management plan, with relevant annexes for crisis management in corporate communications.
So, what then goes into the corporate crisis management plan?
Well, the short answer is it depends. Specifically, the crisis management plan hinges on a couple of factors:
When committing a plan to paper, organisations should take the following steps.
1. Have a firm grasp of performance objectives. What would constitute success? What are the KPIs they will be tracking?
2. If organisations can’t answer those questions immediately, that’s ok. Some of the responses will depend on performing a vulnerability audit. That is a multi-disciplinary risk assessment which organisations undertake to determine areas of operational weakness and come up with strategies to mitigate or eliminate said weaknesses.
Of course, the fundamental purpose of the audit is to uncover current and potential threat, whatever form they take, e.g., arising from normal operations, most common to the industry, and unexpected external events.
3. From there, organisations will develop a list of potential crises and rank them in order of likelihood of occurring and associated costs of dealing with the impact.
4. Then, after incorporating a list objectives and likeliest crisis scenarios into the plan, organisations will proceed with drafting the rest. The plan itself will have to be flexible enough to adapt to multiple situations, i.e., modules rather one-size fits all.
5. The final step, often forgotten, is defining what constitutes a crisis within the plan ahead of time. Organisations must know when to call in the crisis management team. And to do this, they should document all the criteria and indicators which will be used to determine whether a crisis has occurred.
When crisis response goes awry, flawed communication is often the culprit. In crisis, bad corporate communications can either mean withholding too much information from the public, having important internal spokespeople saying different things (i.e., not being on-message,) failing to correct the record, giving too much information to the wrong publics, etc.
Combatting those common errors requires planning ahead of time, i.e., developing a crisis communications plan. The plan should include the following:
Many smaller organisations, of course, don’t have dedicated, in-house PR resources. For the purposes of crisis communication planning, those firms should consider investing in an external PR resource in a contract capacity. Make sure that person weighs in on the crisis communications plan and is fully abreast of subsequent.
Indeed, crises are a fact of business life, making corporate crisis management an essential organisational competency.
However, building such a competency takes time and effort. And so, firms themselves have to get serious, investing in the right crisis management technologies to execute best-practice strategies that will serve to improve the management of critical events and exercises.
What capabilities matter most? In close, we suggest the following:
Finally, the precipitous rise in corporate crises necessitates a best-practice approach, paired with advanced technology capabilities, to ensure effective critical event response and better coordination. The up-front investment might seem like much. But the results speak for themselves: peace of mind, improved collaboration, and, of course, longstanding organisational resilience.
W. Timothy Coombs: Crisis Management and Communications. Available at http://www.facoltaspes.unimi.it/files/_ITA_/COM/Crisis_Management_and_Communications.pdf.
Dawn R. Gilpin, Priscilla J. Murphy: Crisis Management in a Complex World. Available at https://books.google.com/books?id=_7rW6w7duDUC&pg=PA19&lpg=PA19&dq=crisis+management+lifecycle&source=bl&ots=jwJDoU7dfa&sig=BCQOC9MNz632lPo6dCivA9fFQsg&hl=en&sa=X&ved=0ahUKEwiJ_sPfxZ7ZAhUB3GMKHdO4CMcQ6AEIbzAO#v=onepage&q=crisis%20management%20lifecycle&f=false
Gwyneth Veronica James Howell, Queensland University of Technology: Description of the Relationship between the Crisis Life Cycle and Mass Media. Available at https://eprints.qut.edu.au/15827/1/Gwyneth_Howell_Thesis.pdf.
Jonathan Bernstein, Bernstein Crisis Management: The 10 Steps of Crisis Prevention. Available at https://www.bernsteincrisismanagement.com/10-steps-crisis-prevention/.
Michelle G. Hough and John Spillan, Journal of Business & Economics Research: Crisis Planning: Increasing Effectiveness, Decreasing Discomfort. Available at https://www.researchgate.net/publication/242581268_Crisis_Planning_Increasing_Effectiveness_Decreasing_Discomfort.
Published May 19, 2021