A crisis is the ultimate unplanned activity and the ultimate test for managers. In a time of crisis, conventional management practices are inadequate and ways of responding usually insufficient.
Fewer circumstances test a company’s reputation or competency as severely as a crisis.
Whether the impact is immediate or sustained over months and years, a crisis affects stakeholders within and outside of a company. Customers cancel orders. Employees raise questions. Directors are questioned. Shareholders get very nervous. Competitors sense opportunity. Governments and regulators come knocking. Interest groups smell blood. Lawyers are not far behind.
As the ultimate unplanned activity, a crisis does not lend itself to conventional “command and control” management practices. In fact, some of the techniques for managing a crisis may fly in the face of conventional notions of planning, testing and execution. Preparation and sound judgment are critical for survival.
One of the most vital skills a company can possess is the ability to determine if, when and at what level of importance a crisis has struck:
- Is this a crisis, or is it simply a continuing business problem coming to the surface?
- Is it confined to a local area, or does it have the potential to become a situation of national or international importance?
- Has someone verified the incident or crisis?
- What are the legal implications?
- What level of resources will be required to manage it?
- So what’s to be done?
Ten rules for crisis management
1. Respect the role of the media.
2. Communicate effectively
3. Take responsibility.
4. Centralise information.
5. Establish a crisis team.
6. Plan for the worst; hope for the best.
7. Communicate with employees.
8. Third parties.
9. Use research to determine responses.
10. Create a website
The Chinese have an expression for crisis: wei ji, which is a combination of two words: danger and opportunity. While no company would willingly submit itself to the dangers inherent in a crisis, the company that weathers a crisis well understands that opportunity can come out of adversity.
A well-managed crisis response, coupled with an effective recovery program, will leave stakeholders with a favourable impression and renewed confidence in the affected company.