3 Important Reasons Why Crisis Management Plan is Important
A crisis on an organization scale has the potential to disrupt their workflow and that is just one of the reasons why crisis management plan is important. It is defined as an unexpected or a sudden event that creates unrest among the different employees at a workplace.
It is essentially a state of emergency that can affect the individual employees, a group, the entire organization or even the society when considered as a whole.
The crisis may come as a sequence of sudden events that have the potential to cause damage in a short period. It also creates a feeling of threat and fear among the employees or those involved. Most organizations have to be ready for crisis as they can occur at any point in time.
Why Crisis Management Plan is Important to have in Place?
Crises usually have a significant impact on the organization regardless of their type.
- If crisis management is not done properly, the recovery for the organization can take a longer period. This can directly impact the business in terms of revenue and downtime.
- For the IT companies, for example, a small disturbance or crisis can cause a loss to the company amounting to 6-digits (in dollars), according to the IBM Global Study on Economic Impact of IT Risk.
- Crises can also damage the reputation of the business. Such a loss is not something that can be quantified easily after it has occurred. So, it makes sense to have a management plan in place if something such should occur. But, to some extent, the reputational damage can be linked to decreased sales, loss of customers, etc.
So, What Is the Solution?
A plan! A crisis management plan can help alleviate the damage to a great extent and provides a sense of confidence to the people involved in the organization.
The first step is to create a detailed crisis management plan that provides the framework for actions to be taken concerning specific types of crises such as safety and health-related, reputational damage or disruptions in the business, for example, a website being hacked.
Following this, create strong crisis management teams and establish their hierarchy so that they can quickly analyze the crisis when it occurs and respond.
After this, a crisis communication strategy is also important so that the organization can respond quickly and appropriately to customers and other employees of the crisis. This can help control or avoid the damage to the reputation of the company.
How to Create a Crisis Management Plan
- The first step to creating a robust crisis management plan that works is to assess the risk. This can be done by creating a risk assessment plan. In this plan, you identify the potential risks and crises your organization can face and define the impact it will have on your business. Note that the risk assessment plan has to be inclusive of all stakeholders, leadership members, and other key stakeholders to identify all potential vulnerabilities and threats to the company.
- Although in the risk assessment plan, you may determine the impact each threat can have on your business; there is also a way to quantify it. It can be done using business impact analysis or BIA. A BIA can incorporate single or multiple effects on your business such as dissatisfaction with the customers, loss of income, augmented expenses, fines and reputational damage in the eyes of the customer.
- The next step is to identify the steps that can help you address each scenario in any potential crisis, effectively. Think about the different steps that would be best to take to solve a particular crisis, and also determine the resources it would require along with the number of employees and skillsets. For example, if you are an e-commerce website and it goes down, you can inform all your audience of the various social media platforms, and work with the customer service teams to respond to customers effectively. Also, in parallel, get the developer on – board to put the website up as soon as possible.
- Next is to write down the actual plan. As mentioned before, make it as inclusive as possible by taking inputs from key employees and all-important stakeholders. As you draft the plan, also keep in mind if you have any regulations or other rules to follow. Ensure that you continue to adhere to them even in the middle of a crisis.
- Following this, it is important to make your employees understand the roles they need to play during the crisis. To ensure that there is no confusion, they must have all the information they need in the easiest approach way possible. Maybe, you can have a crisis management plan which includes access to updated and real-time information, messaging options, contact lists, reporting of incidents, etc. Also, ensure that they are trained to follow the plan. You can do that by conducting frequent drills, so the employees become confident in how to respond when a real emergency occurs.
- The plan needs to be updated frequently especially when new employees join or old ones leave, or when a new technology is being implemented in the company. Keep the content fresh and review the crisis management plan at least a few times every year.
So, there is a guide to help you build a good crisis management plan. Crisis management plans are a need for every form of business because there is a potential risk everywhere. Try to include visual content in the plan so that it can be remembered and recalled easily by those who have to execute the plan. To get started, you can pick some templates and see some sample crisis management plans online. Or you can reach out to a company who specializes with crisis management like ourselves at BranReluao and Associates.