What is Crisis Management? How does it Affect You?
‘In the midst of every crisis, lies great opportunity,’ with the convincing quote of Albert Einstein, it is pretty obvious that everyone has his own definition of Crisis. It is merely an unexpected plight or rather a threat that suddenly arises in order to alter the flow or the stability of one’s economic or psychological business. This implies that a nasty situation can hit anyone and an effective decision may have to be taken immediately in a limited amount of time. Such a crisis can pose a great threat to a person’s mind reputation and more.
Not only human beings but also well-established businesses are also very likely to face crises during their existence and it is imperative that both humans and businesses effectively manage those. The crisis keeps on going and takes a sense of a lack of control throughout the business along with it. It requires the ability to lead the business out of an unfavourable situation by self-motivation and inspiring the employees.
There’s never been a hard and fast rule to identify and classify this unexpected situation. In a general perspective, a crisis can either be self-imposed or caused by various other external forces such as natural disasters, law and policy violations, fraud etc. Self-imposed crises are caused within the organization by employees or the top-level managers themselves with their poor decisions.
Classification of Crises
Crises are classified on the basis of place, events, technology, people etc. Some of the crises that everyone has or will face at least once in their lifetime are described in brief:
- Natural Crisis: A situation that is brought by naturally occurring events or disasters such as floods, landslides, earthquakes etc. is called a natural crisis. Such hardships are entirely out of management’s hands and may not have any solutions unlike the other crisis along with the huge loss of lives and property.
- Financial Crisis: It is the situation that often occurs when the business suffers a huge loss and lacks the funds to pay its debt and dues including loans, interest on loans, dividends, interests etc.
- Technological Crisis: This is a situation encountered as a result of breakdowns in the common scientific and technological tools and appliances that we use such as software failure, industrial accidents, etc.
- Crisis of Malevolence: In a world full of competition some competitors take such extreme steps that they end up ruining the other business for their own success. Crisis malevolence arises after the competitor or a miscreant plays extreme tactics to ruin someone’s business.
- Organizational Misdeeds: Such crisis issues are likely to take place due to wrong decisions of the management and hazardous activities within any sort of organization. It is a result of illegal activities taken by the management due to selfishness or personal hostility.
We have been observing numerous possible crisis situations ranging from those that affect the organization (natural disasters, reputational risks such as rumours, manmade disasters, etc.) to those inflicted by the company, which can have a negative effect on the public by endangering safety, environment, health, and security, such as faulty products and environmental disasters.
Such crisis issues need to be managed, mitigated or avoided through various approaches to build a developmental streak. For any business, whether large or small, there is always a probability that it may run into problems which then negatively impact not only its normal course of operations but also put a business continuity plan in place in case of unforeseen contingencies.
The technical strategy by which an event or a situation that threatens to harm or has already harmed the peace of either the organization or the human being or both is dealt with and effectively managed is known as Crisis Management. It has also been defined as a leadership imperative that involves qualified personnel within and outside of an organization. Crisis management in any organization is an element of competition that is eligible to communicate within and with other organizations, government agencies and media.
It usually involves the skills and qualities which tackle those crises or unfavourable events that negatively affect the general public and organizations. Crisis management often requires decisions to be made within a short time frame for the welfare of both producers and consumers.
It is very certain that crises occur at every level in organizations, even in those levels where various teams have been playing an integral role. In order to minimize the uncertainties during the crisis, organizations often come up with a strong crisis management plan.
It consists of a crisis management team, a set of well-inspected procedures and an objective that typically ensures consumers and the environment is protected with the safeguarded reputation of the organization in the crisis event. Standard members of the crisis management team are the spokesperson of the organization, who manage statements and press releases. The management committee must be very well prepared and highly attentive to deal with the crisis and its procedural elements and also must be able to communicate quickly, efficiently and with relevant key audiences, to show that all possible measures were taken to prevent the crisis.
Crisis Management Techniques
There is an old saying, ‘Leadership is turning crises into opportunities, darkness into light and hatred into love.‘ It is never a good idea for crisis management merely to be reactionary, but it must include preventative measures and anticipation of the various potential crises in the organization. Some of the techniques that can help limit the potential damage in a crisis situation are listed below:
This is a must-do activity for any crisis communications team. The first step in crisis management is to get prepared, and proactive and arrange an intensive brainstorming session to get away from all the potential crises that have the chance to take place in the organization.
2. Plan Formation
For every organization, a crisis response plan should be tailored which must include both operational and communications components i.e. the proper statement of what needs to be done and what needs to be said in crisis situations. Most importantly, taking these steps will help ensure you can carry out your response plan in a real-life situation, not just in theory.
3. Crisis communication team Formation
A responsible team of senior executives should be formed to handle the organization’s crisis communications. This team should be arranged in such a way that it sets up the proper communications process for business. It is a must to establish a clear process and well communicated to all the staff, channels that include newsletters, employee handbooks and intranet.
4. System Monitoring
In this step, the casual comments made about the organization on social media by employees, customers, and other stakeholders are analyzed and then decisions are made accordingly. Failing to perform such assessments may result in a situation of crisis. Similarly, monitoring feedback from stakeholders never goes out of trend and help in the adaptation of newly formed strategies and tactics for the organization during a crisis situation.
It has been said that the first rule of crisis management is to communicate, the critical early hours set the tone for the duration of the crisis. It is recommended to be as open as possible; tell every known detail with calmness and fluency and explain who is involved and what is being done to fix the situation. Hiding facts or remaining silent or could enrage the public and other stakeholders.
6. Post-crisis analysis
This step is performed at the end of a crisis where formal analysis of what was done, what could have been done to make it even better and how to improve elements of the crisis response plan are taken into account. A wise company or an organization shall assess how effective and efficient its plan was during the crisis as soon as the crisis comes under control.
By following the trends of occurrence of the various crisis issues and their mitigation measures, it has been noted that a properly executed, efficient and effective strategic crisis management plan has a large potential to reduce the level of stress and damage that an organization would further suffer during a crisis. And it is also certain that to overcome a crisis situation, an organization can rise up with even stronger stability and increased opportunities.