Tips on Crisis Management
Crisis management, in simple terms, refers to how an organization deals with disruptive, unexpected events that could potentially have significant negative impact on the organization, its stakeholders, and the public.
No organization – start-up enterprises or long-time market leaders (think Toys “R” Us) – is immune to experiencing a crisis. With proper advance planning (because, after all, crises are usually unexpected), strong leaders are prepared to deal with the unanticipated.
There are usually three common elements to a crisis: the threat to the organization, its stakeholders, and the public; the element of surprise; and the need to make decisions and take action quickly.
Successful crisis management can be implemented quickly and efficiently in three steps:
• Risk Assessment
• Course of Action Planning
• Contingency Planning
The risk assessment phase begins with an analysis and prioritization of the risks that the crisis has created. The challenge here is to identify as many possible emerging risks without being overwhelmed by their potential.
Leadership needs to analyze and prioritize these risks so they can be addressed immediately or dealt with at a later date. It’s critical that leaders determine the likelihood of the risks occurring and their potential damage. With this information, leaders can prioritize risks and build them into their planning.
Next, a course of action analysis (COA) should be conducted. A COA determines what can be done to best mitigate current and minimize future risks. While it can be helpful to run “simulations” that analyze hypothetical scenarios (e.g., if ‘A’ happens, we’ll do ‘B.' If ‘C’ happens, we’ll do ‘D’), most leaders of start-ups don’t have the resources in-house to do that. Therefore the COA is often the product of staff brainstorming and discussions – which is invaluable!
The COA provides an assessment of the risks and articulates a preliminary plan for dealing with them.
The COA effort is very time intensive and must be quickly formulated. It is usually limited to two proposed courses of action and details what the most likely results will be, and what presents the greatest potential threats to the proposed courses of action.
Next, leaders must address contingency planning. It is essential to consider long and hard contingency responses should even the soundest, well-considered plan of action fail. Imagining and anticipating worst-case scenarios – however unlikely they may seem – is a vital component to effective crisis management.
By rapidly accomplishing these three stages of response, the organization’s teams can be informed and engaged in the crisis management activities. This might include new training for staff as well as increased internal communication efforts.
When it comes to crisis management, there aren’t any hard and fast, silver bullet solutions. Every situation is different. What every crisis does have in common is the leader’s need to use every resource available to quickly gather knowledge to effectively address the situation.
Leaders – whether in crisis or not – must always be learning about the organization’s operating environment and its people, which greatly helps identify potential challenges or threats. This continuous learning approach leads to greater agility and capabilities in reacting to a crisis.
Ultimately, the actions of leaders shine through in resolving any crises and mitigating the damage. A well-prepared and knowledgeable leader should have the tools available to manage a crisis rather than allowing it to spiral out of control.