Obviously, any corporation hopes not to face "situations causing a significant
business disruption which stimulates extensive media coverage" (crisis).
The public scrutiny that is a result from this media coverage often affects
the normal operations of the company and can have a (negative) financial,
political, legal and governmental impact. Substantial value destruction is
to be feared of, especially when the crisis is not handled well in the perception
of the media / public opinion. Crisis management deals with giving the
right crisis response (precautionary, structural and ad-hoc).
Some generic help and hints on crisis management
Prepare contingency plans in advance (crisis management team and
members can be formed at very short notice, rehearsing of crises of various
Immediately and clearly announce internally that the only persons to
speak about the crisis to the outside world are the crisis team members)
Move quickly (the first hours after the crisis first breaks are
extremely important, because the media often build upon the information
in the first hours)
Use crisis management consultants (advice by objectivity of PR
consultants is important, use the corporate image expertise of specialists)
Give accurate and correct information (remember that trying to
manipulate information will seriously backfire if it is discovered, also
When deciding upon actions, consider not only the short-term losses,
but focus also on the long term effects.
Executives at all levels of the organization are employed to manage crises
and often do so on a daily basis. Their skills are really tested when they
have to manage significant crises that have the potential to disrupt the organization's
value creation process, income sources, operating expenses, stock price, competitive
position and ongoing business. Compare:
The most effective crisis management occurs when potential crises are detected
and dealt with quickly - before they can impact the organization's business.
In those instances they never come to the attention of the organization's
key stakeholders or the general public via the news media.
Creating a Business Continuity Plan
In instances where the crisis already has erupted, or it is inevitable
the crisis will impact the organization's key stakeholders, a business continuity
plan is helpful to minimize the disruption and damage. Developing such a plan
can seem like a daunting task, but in actuality it is a common-sense document.
It involves identifying those functions and processes that are critical to
the business, then designing the operational and communications contingency
plans to deal with the potential failure of one or more of them and how key
stakeholders will react when they find out. An important element that is sometimes
overlooked is to test the Business Continuity Plan. Also companies should consider Business Interruption Insurance against the loss of income after events (disasters) that temporarily interrupt business operations.
Corporations with business continuity plans will be in a better position to
minimize the business impact and financial damage. On top of that, executives
may find that the process of developing these plans also has an indirect benefit.
Their organizations are more sensitive to possible crisis situations that
could disrupt the business and affect its operating expenses, profits and
overall growth. As a result their managers respond more rapidly and effectively
to head them off.
Barton - Crisis in Organizations II
Book: Steven Fink
- Crisis Management: Planning for the Inevitable
Special Interest Group
Crisis Management (Contingency Planning) Special Interest Group.
Forum discussions about Crisis Management (Contingency Planning). Below you can ask a question about this topic, share your experiences, report a new development, or explain something.
Types of Crises
In a recent paper, Erika Hayes James and Lynn Perry Wooten distinguish between:
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In a world that is constantly moving on from one crisis to another, organizations should assess their responses to said crises to determine if their actions taken were the optimal strategies, tactics,...
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Here are some facts that show the importance of Crisis Management / Business Continuity Planning.
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International Association of Emergency Managers
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