As per the definition, crisis management is the process by which a business, or any other organisation, deals with a specific emergency. However, the notion goes a bit deeper. Crisis management, much like the human body, deploys senses to assess the crisis holistically, and then adopts a multi-pronged approach. Companies today tread a fine line between survival and disaster; and crisis is an inadvertent part of the business scenario. However, it is a task to avoid the bad from getting worse.
Since word travels far and wide, it is essential to plug all holes and a crisis should be reprimanded via all social and media platforms and if need be, face-to-face meetings as well. Disaster can also strike in terms of financial expulsions, technical breakdown, product flaws or the workforce. Crisis management involves an in-depth understanding of the problem at hand and the necessary tools to resolve it.
What is Corporate Management?
Corporate management is the technique of running an organisation based on its operative, regulatory and financial pathways. As per businessdictionary.com, business tasks often performed by corporate management might include strategic planning, as well as managing company resources and applying them towards attaining the company's objectives. Today, corporate management is achievable via a Corporate Management System (CMS) which allows organisations to respond to market changes in real time.
How are crisis management and corporate management connected?
It is a rather simple equation — the better the crisis management, the smoother the path for corporate management. Upholding the brand value or rectifying it to customers and other stakeholders’ expectations creates a positive image for the organisation. This positive image fuels the tactics that can be leveraged to grow the organisation in a desirable direction.
Why is there a gap between crisis and corporate management?
The crux lies in understanding the need for crisis management and what measures can be incorporated to align with the company's existing functionality. The gap between the two can prevail for the following reasons:
- If the organisational team or core team is unaware of the type of crisis at the threshold. Crisis management can be for anything, ranging from a brand perspective to a technical breakdown.
- They do not have the correct knowledge of the remedial measures that can be adopted to mitigate the crisis.
- The team is shooting in the dark, trying to choose a trial and error method which will lead to the loss of capital and resources.
- The organisation is not ready to face the challenges and is hence ill-equipped during the downpour.
What can lack of crisis management do to an organisation?
- Dissolve the current image: In simple terms, an organisation loses face
- Loss of credibility: With no reputation, customers lose faith
- Impairment of goodwill: No one will trust the organisation
- Loss of reliability: The organisation will lose its reputation of being self-sufficient.
- Impact future growth and progress: Since the organisation is trudging towards saving itself in a crisis, it often loses sight of the future which impacts the growth trajectory.
- High attrition rate: No one likes to be a part of an uncertain future. Lack of proper crisis management can lead to employees leaving.
Crisis management strategies
Since catastrophe is an uninvited guest (if we can call it that), it is better to keep in handy a couple of strategies that can either avert the impending disaster or at least soften the blow.
- Have a Plan: This goes without saying. Map the problem on a large scale and define clear objectives for every small step that can untangle the mess one knot at a time.
- Honesty is the Best Policy: The worst thing you can do in times of adversity is hiding it behind a pile of lies which will sink the brand reputation even further. Being transparent and coming out clean doesn’t offer much scope to those looking for dirt and also upscale the brand image as the one that takes ownership — a win-win situation.
- Communication: Communication with the team, customers and suppliers keeps them in the loop of the ongoings, especially during the difficult times. This will bring in inclusiveness and also build trust.
- Update Constantly: By keeping your name clear through constant communication will help erase the taint and not allow space for any rumours.
- Overall Engagement: While it is essential to stay in the clear on social media, ensure you do not miss out on other mediums of print and broadcasting. The tarnish can often be removed by interacting with people, in the flesh, devoid of any intermediary mediums.
Advantages of good crisis management
Prevent heavy financial losses: For instance, if the server of a large company is down, even if for a few hours, it can mean a colossal losses. Crisis management planning can, if not foresee, arm the organisation better in case of an impending disaster which can save a considerable amount of resources.
Legal Protection: Crisis can be in the form of litigations and lawsuits. Having a robust crisis management plan can seal the holes for any legal exposure and save the organisation from going into trial or expending huge costs in fines or penalties.
Avoids Reputational Damage: This cannot be emphasised upon enough. Reputation can make or break a company, and a robust crisis management plan can steel the reputation against upcoming attacks. There have been way too many instances in the news where hi-profiled CEOs and founders were questioned in public about their practices and a lack of proper explanation for the same.
The Secret of crisis management is not good v. bad; it’s preventing the bad from getting worse.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)