Crisis Management Definition
Crisis management, in simpler words, is the art of taking care of employees and other critical business operations during/after an unprecedented situation. Crisis management helps a business to sail through a crisis effortlessly.
A crisis comes without any notice– coronavirus is the biggest example. Addressing such difficult times and coming up with effective solutions promptly is known as crisis management.
Let’s dive in and understand everything about crisis management!
Here, we will discover:
What is Crisis Management?
When an unexpected and major bad thing happens, crisis management steps in to help the organisation handle it while keeping business running. Crisis management is the process of putting policies and practices in place to protect a business during a crisis.
A crisis can happen because of an event that no one saw coming or because of an unplanned effect of an event that was seen as a risk. In either case, crises almost always mean that quick decisions are needed to keep the organisation from getting worse. Natural disasters, money problems, and cyberattacks are all examples of crises.
Importance of Crisis Management
Crisis management is one of the best ways to avoid and deal with crises. It includes strategic planning and how to handle threats and events that come out of the blue. The most important parts of crisis management are listed below.
Keeping Stakeholders and Image Safe
People who work for, invest in or have a stake in a business may lose trust in it after a crisis damages its reputation and trustworthiness. Organisations can build trust with their customers and lessen the damage to their image caused by crises by using good crisis management strategies.
Making Sure Business Keeps Going
Another important part of crisis management is making sure that business and critical operations can keep going even when there is a crisis. This is done with business continuity plans. To protect important business functions, these plans include backup plans, emergency action protocols, and other steps to be taken in case something goes wrong.
Keeping the Public’s Trust
Crisis management also helps businesses deal with problems and explain how they’re treating them in a clear and honest way. Organisations can keep the public’s trust by being open and honest with their words through caring public relations, addressing the concerns of stakeholders, and giving timely or real-time updates.
How to Create a Crisis Management Plan?
Break your crisis management plan down into smaller, more manageable steps to make it more efficient and effective. This can help you figure out what risks are most likely to happen without being too scared of the whole situation. Use a plan for crisis management with the six steps below:
Choose Crisis Leaders
Choose a team of leaders to work with during crisis planning before starting. Crisis responders should be on your team. Starting crisis management planning with this team ensures everyone understands your crisis approach.
Check the Risk
Start planning by coming up with ideas for how to deal with the different risks your business might face. As we already said, one way to start your brainstorming process is to think about the risks that come with your job.
Determine Business Impact
After identifying high-probability risks to your firm, assess their business impact with your crisis leadership team. Analysing risks is crucial since they can have distinct outcomes.
Make a Plan
After making a list of risks, you should talk to your team about what they need to do for each one if it comes true. Say your software company gets hacked. You might need someone to watch over the network, someone to tell your customers, and someone else to figure out how bad the damage is.
Review and Update
After finishing your crisis plan, check for any pitfalls. Also, crises may happen at any time. So, keep updating your crisis management plan at least once a year to stay ahead of the curve.
FAQs
What is crisis management?
Crisis management helps an organisation handle a sudden, bad incident while ensuring business continuity.
What are the 5 stages of crisis management?
Five Crisis Management Stages are Crisis Recognition, Initial Response, Situation Management, Pre-recovery flexibility and Recovery.
What are the elements of crisis management?
Four elements of effective crisis management are- Clearly defined team duties, Official incident assessment, good incident action planning and good crisis management team communication.