Crisis management is the process companies used to respond to short-term and immediate shocks, such as accidents, disasters, catastrophes, and injuries. It is not easy to generalize about how to manage in a crisis.
As one crisis management adviser has written, “It is true that every corporate crisis is unique; that is to say, the underlying circumstances are unique, the individuals who are involved are unique to that company or to that organization, the facts, the timing and anything else going on in the market place is unique.
Therefore, every situation has to be managed on its own terms.” There are, however, certain characteristics that emerge time and time again.
What Is a Crisis?
Four characteristics define a crisis.
Surprise is the single most defining characteristics of a crisis. The organization is not ready for the event, it happens without warning, and managers are left trying to react to events beyond their control. You should ‘expect the unexpected.’
- Lack of Information:
Crisis often put managers in the position of needing to act, but having to do without reliable information. Today, most managers operate in an information-rich environment. But when a crisis strikes, managers may be forced to act quickly without full and complete information.
- The escalating pace of events:
A crisis does not wait until a company is ready for it. Once a crisis begins, it often sets in motion a chain of events that increases in number and complexity for the company.
- Intense scrutiny:
During a crisis, the world is watching every move executives make. In the normal course of business, managers make decisions on the basis of research and analysis, extensive consultations with experts, and careful deliberation, and they do so in private. During a crisis, every single decision is closely scrutinized and subject to immediate assessment by the media, government officials, and many other external stakeholders. Crisis management is the management in a fishbowl. Feedback comes quickly, whether as praise, criticism, or condemnation. This makes it very hard for, managers to internalize the feedback they are receiving and evaluate what others are saying.
Key Principles of Crisis Management
What does one do when a crisis occurs? According to experts, there are some principles, not rules, that can be useful to managers facing a crisis.
Define the Real Problem.
Crises tend to force managers to think short term and focus on the narrow problem at hand. Experience suggests that the crisis management team should ask several reflective questions: What would constitute a good job in managing this crisis? What can we accomplish? What is impossible?
Set Goals and Define the Crisis Strategy in Light of Those Goals.
The urge to act first, think later is hard to resist when facing a crisis. Experts suggest that the better course is to have some managers actively thinking about the goals – What do we want to accomplish? How do we want to be perceived by the media? By our shareholders? By our employees and customers?
Manage the Flow of Information
Experts advise managers to tell the story their way, consistently, and frequently. Because electronic media repeat stories quite frequently in a typical news day, managers have an opportunity to correct errors and should not permit an erroneous statement to stand unchallenged.
Adopt a Team Approach.
It is important to have one spokesperson designated at the outset and available to act on the company’s behalf immediately. Successful companies have thought in advance about the skills each crisis team should possess. Legal, media, and government relations skills are essential in many crisis situations.
Plan for the Worst case
A crisis always has the potential to worsen, and managers need to anticipate the worst-case possibility. It is tempting to assume a crisis will pass and the world will return to normal. Experience suggests it is wise to prepare for the worst.
Plan on the Situation Getting Worse
By doing so, an organization can begin to see ahead and create contingency plans for communicating with key stakeholders, deploying resources, and organizing other companies and people for action.
Follow-Up after the Crisis is Over.
Many contacts with stakeholders occur during a crisis. Experience suggests that a company can restore its image and reputation by dedicated follow-up to shareholders.
Information technology can be a powerful aid to a company facing crisis and needing to communicate with stakeholders. Experts also advise that a company should measure the effectiveness of communication messages through polling, surveys, and focus-group interviews.
Don’t Give Up
As bad as it can be for an organization, a crisis rarely destroys a well-managed business. Leadership is vital if an organization’s internal and external stakeholders are to believe that there is a bright future beyond the crisis.
Is it possible to really manage a crisis? Although managers are at a disadvantage, there are a number of principles that experts believe help minimize the impact of crises on the organization. And since no two crises are ever alike, managers can only try to learn the lessons from past crises to be more prepared for the future. Although the advice to companies that have been caught in crises have learned some lessons that enable us to define some guidelines and suggestions, still, company executives often have to rely on their own good sense and instincts for dealing with stakeholders when facing a crisis.