At its core, crisis management is about how and what a business does when it finds itself unable to meet internal or external commitments or internal or external problems. Whatever the cause, the result is a crisis that needs to be resolved.
Crisis management is about handling a crisis by resolving the core issue.
The quality of crisis management at a business impacts its reputation, which is the most valuable asset for any business. A well-planned crisis management strategy based on openness and honesty helps resolve the crisis and build a reliable and trustworthy reputation.
Let’s now look at the five common mistakes you should avoid when facing a crisis.
1. Not having a plan
A crisis can unfold across different business verticals and hierarchical levels. Planning for a crisis means that key personnel in the company knows the answer to the question, “What am I supposed to do?”
Every employee should be empowered to trigger an “incident response plan” that starts with a mandatory internal disclosure along with a shared contact list. A shared contact list is needed so internal stakeholders and clients know whom to call during a crisis. Let’s look at a couple of different types of crises that a company could face and the benefit of planning for them.
Say your workplace is susceptible to fires and floods. You will need a detailed plan for notification, evacuation, and disaster recovery of mission-critical systems like customer information databases. A detailed plan will let the business get back on its feet in the shortest period and with the least damage to its operation and credibility.
In another case, let’s say that a client calls to inform you that they will delay a large payment by 60 days. That immediately affects multiple pre-committed vendor payments. A good crisis plan here would include a clearly defined process for internal disclosure and a backup for access to short-term funds. With these two things in place, relevant stakeholders are notified, and the company has access to capital it can utilize in these situations.
Crisis management plans must include training across the company and tabletop exercises to test their robustness. If you are prepared, costly mistakes are less likely to occur. A crisis management company can help you prepare for such a situation.
2. Letting the situation fester
In a crisis, the worst thing you can do is delay your response. Delays in responding to a problem can have disastrous results down the line. That puts your business in the spotlight for all the wrong reasons. You can guess the impact on your reputation.
There are many examples of companies that have struggled with this issue.
Businesses today operate in the digital world, and confidential data is housed on the cloud with third-party providers. A data breach could open you up to severe legal and bottomline implications. The Equifax data breach case of 2017, where hackers leaked the personal data of over 140 million people, is an example.
An unreported crisis can soon spiral out of control and affect reputation and profitability, which causes issues for business growth. Crisis management has to cut across all facets of a company’s operation.
In the Equifax case, the technology team should have updated its security software and triggered its internal disclosure procedures. A robust crisis management plan would enable the social team to mitigate the impact of the crisis by openly disclosing the issue, narrating the actions taken by the company, and reassuring stakeholders and customers.
3. Applying a band-aid solution
The third mistake to avoid in a crisis is hiding it. Take the example of Uber, which paid cybercriminals to hide a data breach affecting over 57 million users for over a year. When the news finally leaked about the incident, the company was flooded with complaints, lawsuits, and negative reviews leading to a severe loss of reputation and profitability.
If only Uber had been upfront in addressing the issue by reporting and containing it. That approach would have mitigated the problems. At its core, a crisis management plan is your insurance against escalating a crisis into a full-blown disaster.
A quick and simple statement along the lines of, “this is the issue, we are aware of it, and here is how we’re resolving it” can help contain the problem. It also reassures your customers that they are dealing with a company that owns up to its mistakes and respects customers enough to tell them.
4. Not sticking to the plan
While speed is vital when reacting to a crisis, it should not lead to a breach of protocol or agreed-to process. If the protocol assigns decision-making authority to a committee, you need to stick to it instead of making the call yourself.
Breaking protocols of a defined crisis management plan shows a lack of business acumen and can impact employees’ ability to do their jobs correctly. That creates communication breakdowns and slows down your recovery time. Sometimes this can lead to the creation of a new crisis.
Dealing with a crisis requires you to be both fast and organized. Once a plan is set up and your staff has been trained to implement it, have faith in them. Of course, you can’t anticipate all situations. If you’re faced with a situation where you have no choice but to break protocol, ensure you notify everyone involved and the solution you have put in place. That will keep everyone on the same page.
5. Dealing with issues outside your field of expertise
This one is for business leaders. Let’s say you run a tight ship and have a well-established crisis management plan in place, but you cannot contain a crisis that is fast-spiraling out of control. Don’t be a lone warrior and try to battle on. Instead, get professional help.
Your failure here could have a severe impact, as Uber found out when it tried to deal with its data breach outside commonly accepted channels. Turning to an external third party can be part of a robust crisis management plan.
A third party can help you look at things objectively. They can also conduct a root cause analysis and offer options for containing the crisis. Senior management often feels that getting professional help is a comment on their abilities, and this embarrassment needs to be removed.
Crisis management companies can help resolve a crisis and provide expertise in other areas, including data compliance, cybersecurity, and disaster recovery.
Wrapping up
Don’t let your business be the next Uber or Equifax. Know your risks and define what to do when a crisis arises. Repeated roleplay across business functions and hierarchies allows each employee to be trained in crisis management.
A robust crisis management plan is an opportunity for your company to shine and build its reputation in times of crisis. Companies and business leaders who manage a crisis in a timely and responsible manner attract and retain loyal customers and employees. That’s the bottom line.
By Chris Norton, Founder of insight-led PR agency Prohibition, blogger at Social Media Training, former University lecturer, author of “Share This Too” and listed in the UK's top 10 PR and social media bloggers.