If you are in business, you should expect a crisis. Whether your organisation survives depends on how you manage it.
Is your business in crisis, or have you ever suffered one?
Often, businesses don’t know exactly when a crisis begins. A crisis can emerge because of competitive factors, external market factors and change in context, or even from internal actions.
A crisis can either make or break an organisation. The way the crisis is handled and managed says a lot about the underlying culture, the underlying values and standards, the resilience of the leadership and the preparedness of the organisation to deal openly and directly with issues as they emerge.
A crisis well managed has the opportunity to build massive trust with the communities it serves. It allows the organisation to demonstrate its core values to its target prospects and customers. A crisis badly managed is a recipe for disaster, and often leads to many businesses failing within next few years following the crisis event.
Unfortunately, great ‘crisis management’ really happens, as crises emerge in businesses large and small, it is often the opportunity for finger-pointing, blame, or the ostrich “head in the sand” approach to leadership and management. Often what these things do is to create a crisis from the crisis – each element creating greater and greater problems as the organisation spirals downward, out of control
Many organisations are not even prepared for the idea of a crisis. By ignoring the potential for crisis, they ignore a significant business risk which needs to be ameliorated, and at the same time they miss the opportunity that comes on the back end of managing a crisis properly. The number of times I ask business leaders ‘do you have a crisis or contingency plan’ and the answer is ‘we have something for IT’ is amazing. Great leadership is about preparing the organisation to face challenges as well as take opportunities. Risk and crisis planning is a core competence of a successful leader.
Nobody wants to see a business in crisis, however this does not mean that an organisation should not properly prepare for a crisis that can emerge. Consideration should be given, in any business plan, for what risks could emerge to the business. For a businesses, this could be something as simple as will losing all of the data files or the computer systems. It could be a legal challenge, a patent infringement, a customer litigation scenario. It could also be the result of new competition, sabotage, or changed market conditions which means that the income stream of the organisation is now no longer relevant to the customer base. It could be a natural disaster or an accident. Each business has its own specific risks, and those more likely to impact them in significant ways.
Avoiding crisis is often in proper preparation, so that when a ‘incident’ occurs, there is a thoughtful, reasoned plan of action to respond, rather than having the incident escalate into a full-blown crisis. Preparing for crisis means understanding all of the potential risks that might emerge from within and from outside of the business. Going through a stepwise process of imagining what those risks could be, and even ‘ war gaming’ potential significant threats allows an organisation to understand its risk profile, and what could be appropriate responses.
Having taken the time to understand the potential risks to a business also allows it to be more aware of the emergence of factors leading to crisis. It provides the organisation and those within it with a greater sense of the potential for risk, and alerts them to pay attention to the warning signs which might indicate a crisis is on the way and allow to be avoided even before it occurs. Sometimes taking organisations through the process of developing a crisis plan and a continuity plan provides a powerful ‘training’ for the managers, and enhances their ability to spot risks early and to respond in productive and valuable ways.
I will always encourage businesses to a ‘red book’, that is a crisis play-book based around potential significant threats to the business. This handbook can be taken out of the drawer and shared as appropriate to get the organisation through the storm should a crisis emerge.
Too often organisations are caught on the back foot. A crisis emerges, and the organisation has not thought through the potential risk or the strategies which could be employed to deal with that risk. This means that there are always playing catch up. When the trajectory of the crisis is in the hand of the customer, the media, or your opposition, it can be very difficult to get back in control.
Particularly in large organisations (but true for all) being on the back foot is a terrible place to be. It puts the organisation at the mercy of external forces, such as the media, interest groups, government, and those out to benefit from the organisations crisis (such as competitors).
Having a play-book developed allows an organisation to be on the front foot. It should have within a clearly defined roles and responsibilities for times of crisis, a communication strategy including a media plan, legal and regulatory strategies, internal communication approach, worst-case scenario strategies, and backup planning.
One of the key aspects of escaping crisis is the speed of response and the quality of communication and actions. Too often the first actions or statements are defensive, offensive, or not in line with the values of the organisation or best practice. Understanding what needs to be done/said, and by whom (and creating authorities to act) can make a massive difference in turning a crisis into a positive PR opportunity.
There are too many examples of bad crisis management to mention, and only a few really excellent case studies worth observing. Leading in crisis is about going first, going further and putting your needs last. Getting or having skilled advice at such times is critical, to support your plan and to evaluate and moderate planned responses.
The truth is that every business should expect to be in crisis at some time in the future. Prepare and practice, be vigilant about dealing with incidents that could escalate fast and learn the skills of crisis leadership and communication.
If it turns out that no crisis emerges, then you can consider yourself fortunate and simply keep your red book in the drawer.
- When you consider your business, how prepared are you for crisis?
- What major risks do you foresee for your business that could lead to a crisis scenario?
- Do you have a prepared red book to manage a crisis?
- Are you already in crisis but it is not aware of it?