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9 Lessons on Crisis Management

9 Important Lessons on Crisis Management All Businesses Should Consider

by Francesca Dosayla on and last update on May 27, 2020

You may know that crisis management is an essential part of your responsibilities of owning a business, but what does that mean in practice? In this article, we discuss 9 crisis management lessons gleaned from real companies. While you can view our basic guideline for putting together your CMT (crisis management team) over here, let’s help you visualize what to do—and not do—when disaster strikes.

 

What is Excellent Crisis Management?

Finding yourself in the middle of a crisis can feel overwhelming. In those times, remember that many other business leaders have faced major challenges, overcame them, and flourished afterwards.

 

Here are a few to inspire you:

  • Many people remember Pepsi’s marketing crisis when one of their advertisements sparked outrage in 2017. What they got right afterwards saved the day. They pulled the ad within a day and apologized. Although their sales were impacted, they recovered and Pepsi is still around.
  • In 1982 Johnson & Johnson faced a crisis that could have harmed their reputation. Some of their Tylenol capsules were found to contain cyanide and seven people unfortunately died after taking them. They promptly recalled the boxes and changed their packaging so they couldn’t be tampered with—actions that managed to restore some of their lost brand trust.
  • Social media is helpful for marketing but creates more risks. When a Red Cross employee accidentally sent a personal tweet on the company’s profile—all about buying beer—the company took an original approach: instead of deleting the tweet they turned it into a humorous situation.

 

What is Bad Crisis Management?

Unfortunately, not everyone gets it right. Some companies experienced huge losses because they didn’t handle crises correctly, such as:

  • Facebook’s management not responding when allegations relating to its data scandal first surfaced. They took five days to start communicating, forever damaging trust in their brand.
  • After a BP oil spill, its CEO seemed more concerned about getting back to his life the way it was before the crisis, than providing people with information. The brand even wanted to pay off plaintiffs so they wouldn’t sue BP. None of this showcased the brand as having respect for others or even for nature.
  • The Pizza vendor Domino’s suffered embarrassment after employees shared videos online, showing some revolting things they do with the food items in store. Although the individuals were fired, the brand’s slow response in getting out a statement tarnished their reputation.

 

Now, what can you learn from others’ past experiences?

 

Crisis Management: Lessons in Best Practices

You can see that there are many ways to approach a crisis and if you follow this best practice checklist, you’ll be one of the success stories.

 

Create a Team

When a big crisis hits there are many important focus areas, ranging from your audience to products to shareholders. You need a team to manage all aspects so you don’t forget important tasks.

 

Stay Vigilant

Some crises have warning signs; think droughts, recessions and even employee morale. Your managers need to keep an eye out for approaching problems so you can get plans in place before you’re overwhelmed.

 

Act Promptly

When it’s time to act, act. From the examples above you can see the damage it causes if you take too long to respond or implement action plans.

 

Gathering Data is a #1 Priority

Before and throughout the crisis it’s important to have data at your disposal. Whether you need to analyze the market, find out which employees can come to work during a hurricane or discover the truth about a rumor, information is the key to making wise decisions.

 

Be Prepared with a Plan; but be Flexible

You’ll put together a CMP (crisis management plan), but during a crisis, particulars often change. Simply think of how COVID-19 numbers prompt governments to change their tactics overnight. So, be flexible so you can adjust the plan whenever needed.

 

Decide Now How You’ll Make Decisions Then

During the time of crises, various individuals in the business may have to take responsibility for making decisions, sometimes without the chance to talk to other stakeholders. Can you create a framework to make decisions that align with your company vision and future goal?

 

Before You Make a Decision: Are You Biased?

You’ll come across a lot of information spewed out by the press, especially in our modern era thanks to social media and TV. What will you base your decisions on? The information you find online that make you biased, or the truth that your own research provides?

 

Document Everything

Make time during the stressful process to document all the decisions and your reasoning behind them. Also note who takes part in which aspect of your CMP. When the dust settles you may need to conduct an audit, either for financial reasons or to prepare for future scenarios. Your documentation will protect role players and provide answers to important audit questions.

 

Last Tip: Realism vs Optimism

You’re going to face stressful moments and it will feel overwhelming. And of course, you need to be realistic in order to make wise decisions. But try to stay optimistic too because it’s that mindset that results in creative plans that could be the key to helping your business survive.

 

Whether you’re facing a server that went offline or a global pandemic, it’s possible to help your company survive to the best of its abilities. Taking these crisis management lessons, and actively learning from what other organizations can put you in a better position to handle crises that may come your way.

 

Do you have more advice for others facing similar challenges than you do? Please be part of the conversation in our comments section.

Governance and Leadership
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