9 crisis management strategies
Did you have crisis management strategies in place when the worldwide pandemic hit? If you did, you’re likely ahead of your competitors today. If you didn’t, you were forced to answer the question, “What is crisis management?” on the fly – and experienced negative effects your competitors did not.
When you’re running a business or working as a leader within your company, you know how everyday operations are meant to play out. You’re familiar with best interview and hiring practices, know what it takes to close deals with stakeholders and are familiar with the best way to ensure employees sign up for healthcare. But business crisis management skills aren’t about how many policies you have in place or the details of your vacation policy.
Learning how to handle emergencies is about making tough decisions when the world feels like it’s spinning out of control – and as many crisis management examples show, it’s no easy task. It requires leadership, communication skills and the ability to make tough decisions.
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What is crisis management?
The classic crisis management definition is the quick identification and handling of threats to a company. These threats can be internal or external, and can be one-time events or occur over a longer period of time. Effective crisis management strategies begin with identifying threats and performing a risk analysis, to understand how they impact stakeholders, customers and a business’ bottom line.
It’s important to note the differences between crisis management and risk management:
✓ Risk management focuses on planning for different events
✓ Crisis management is about responding to negative events or actions that have already occurred.
There are two types of crisis management, involving slow-burn or sudden business crises.
Types of crisis management
Business crisis management often refers to sudden crises: one-time events that quickly cause damage and require immediate measures to be taken. Sudden crisis management examples include an on-site death, criminal activity by an employee, public relations blunders, dangerous product recalls, essential technology going offline, natural disasters, fires and more. In this context, damage control involves making tough decisions quickly and with confidence.
The second type of crisis is a slow burn. These crises take a long time to build, but when they bubble to the surface, they can be even more damaging than sudden crises. This can include things like personnel turnover due to buyouts and financial crises like a drop in demand or supply chain issues. What is crisis management in this context? You’ll still need to make tough decisions with confidence, but you will have more time to consider them.
The worldwide coronavirus pandemic brought a new type of crisis to the forefront, one with qualities of both sudden and slow-burn events. The initial surge of the pandemic – and recession of the global economy – was sudden. Yet long-term crisis management strategies were also required as businesses made changes to accommodate remote work, social distancing and the new economic winter.
Crisis management examples
Perhaps the most famous crisis management example is the 1982 Tylenol poisoning incident. That year, Tylenol pills laced with cyanide killed seven people in Chicago. Panic ensued. Americans’ trust in Tylenol and in all over-the-counter medications plummeted. But its parent company, Johnson & Johnson, acted quickly.
The company was open and honest about the situation. They stopped selling and advertising the product and set up toll-free hotlines for information. They not only spent $100 million recalling and relaunching the product, they introduced tamper-proof packaging to prevent future occurrences. Thanks to the quick response and honesty of chairman James Burke, Tylenol’s stock prices recovered in just two months.
A more recent crisis management example comes from KFC in the United Kingdom. In 2018, due to supply chain issues, more than 450 stores in the UK had to close because they didn’t have chicken. Customers complained on social media and even to their political representatives. But KFC responded quickly with a funny full-page ad in UK newspapers acknowledging the problem and apologizing for it. Their honest, transparent and authentic response earned laughs and compliments around the world.
Crisis management strategies
Crisis management skills include confidence and the ability to make quick decisions and reduce uncertainty after a major disaster or event. You’ll also need a strategy, which will depend on the type of business you’re in, how many employees you have and what type of resources you need to protect. Here are some crisis management strategies that will give you a good frame of reference for developing and executing a crisis management plan.
1. Identify potential risks
Though it’s centered in response, smart crisis management strategies do identify potential risks and threats. Businesses must research and thoroughly investigate any risk factors to stakeholders or employees, general business vulnerabilities and how negative events or activities could harm the overall reputation of a company. Playing defense instead of offense is one of the seven deadly sins of business, so make sure you’re staying ahead of any potential issues.
2. Assess the emergency and make a plan
You can’t properly execute your crisis management strategies without knowing exactly what crisis you face. Quickly assess the emergency and determine if it is a threat to physical safety, reputation, resources or data. Keep in mind there may be multiple types of threats occurring at once, so prioritize. The safety of your team always comes first, followed by securing resources and equipment.
Have a plan in place ahead of time for different times of crises. Determine what you expect of yourself and other leaders in the organization during an emergency. How will you show you are putting others first instead of only taking care of yourself? How will you communicate with your customers, the press and the public? Don’t assume your leadership team will act accordingly in a crisis; put it in writing.
3. Take immediate action
If it’s a physical threat, the next step is to make sure everyone is safe. This means taking steps like evacuating the building if a fire has occurred or removing an employee from a situation if there’s been a threat of violence either from or to that employee.
Once everyone is moved to a safe location, you need to think about what your team needs on a mental and emotional level. Will this crisis impact how your team is able to do their jobs? Does the company need to shut down for a few days while people assess the situation? Do you need to bring therapists on-site to help your employees deal with what happened and effectively manage the ensuing stress? Depending on the scale of the emergency, these are all things to consider.
4. Remain a leader
When a crisis occurs, it’s easy to get caught up in the panic of the situation. While you could let someone else take charge, it’s your duty as a leader to remain calm and maintain your position of authority. There are many different types of leaders, but all of them need to shepherd their team through a crisis. Take a breath and stay composed – your team needs you.
You can work on various leadership skills ahead of time so that you’re prepared for a crisis. The ability to communicate and connect with others so that they feel understood is one essential skill, and is closely related to empathy. You’ll also want to work on leadership qualities like confidence, focus, accountability and humility, which can help you handle a crisis expertly and minimize its negative effects.
5. Assign a public face
Crisis management strategies require a public face to handle public communication during a tough situation, as customers and stakeholders will need reassurance and guidance from company leadership. This individual must speak and write effectively and be prepared to stand behind a company statement while under public scrutiny.
While many companies assume a CEO is fit for this role, not every senior-level executive is prepared or skilled enough to endure a wide range of interviews, answer tough questions and speak candidly with employees or stakeholders in an open setting. Plus, C-level executives are often busy taking care of other aspects of crisis management
6. Be there for your team
Business crisis management means being there for the people who are most important to your brand: your employees. Check in with your team to see what they need most from you. It’s vital that you don’t merely see your team as employees – these are people who are dedicating the majority of their time to make sure your vision is a success, so treat them accordingly.
You can extend your personal support, as a friend and leader, and also work with human resources to compile a list of external support options. By keeping your employees in the know, you’re getting ahead of false rumors or speculation, which can damage your company.
7. Keep moving
You’ve made sure everyone feels safe, accounted for and heard. Successful crisis management strategies move swiftly. As a leader, it’s your duty to find a productive way to move forward. Actions like repairing your office or finding a new building if yours has been destroyed, replacing equipment and restoring lost data are vital to getting back on track as soon as possible.
8. Perform damage control
Part of developing and retaining customer loyalty is reassuring customers after a crisis. Depending on the nature of the crisis, you may need to send emails or make phone calls to clients explaining what happened and the impact on them. You may also need to issue statements to the press or meet with governing boards for your industry. Remember that a crisis not only affects you and your team – it can also touch all those you do business with.
Be as open as possible to questions from the media, employees, customers and clients. Relaying information as you receive it gives an air of transparency and openness, especially if there’s money at stake. At the same time, staying on top of digital communication is an effective way to spot negative trends or comments and address them before they turn into a full-blown crisis, as comments or input from the public might lead to nasty rumors or misinformation.
9. Look ahead
Ultimately, the answer to “What is crisis management?” is that it’s a way for your business to stay agile, but also prepared. If the crisis was something that could have been prevented, developing crisis management strategies that ensure this same incident never happens again is the final step. Anticipation is power, and though you weren’t able to prevent this particular crisis, you can take steps to strengthen your business so it’s less vulnerable in the future.
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