Taking Steps to Improve Crisis Management

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It’s important to have a well thought out and rehearsed plan of action in place in order to properly and efficiently manage a crisis situation. It is common place for a crisis to occur without warning. First and foremost, familiarize yourself with the different types of crisis that may happen within or to your company. Every business is based on different fundamentals and is characterized by numerous factors, as is crisis. Crisis can be clustered into groups. Here are some suggestions you should consider, familiarize and plan for in case of a crisis.

  • Management misconduct crisis: Management engages in the misrepresentation or concealment of its products/services or practices dishonest customer relations.
  • Deception crisis: Deliberate deeds of misconduct.
  • Misconstrued management value crisis: Management focuses on short term financial gain and aggressively favors investors over all other stockholders.
  • Confrontation: A group confronts your business to win approval of their demands.
  • Malevolence: Criminal or intense measures are taken against your business to destabilize or destroy it.
  • Technological crisis: A direct result of a technological breakdown usually as a result of human manipulation.
  • Natural disaster: Earthquakes, tornadoes, volcanic eruptions, hurricanes, floods, droughts, landslides or tsunamis.
  • Sudden Crisis: Occurs without warning and is beyond the control of the business.
  • Smoldering Crisis: A minor issue that turns into a crisis due to mismanagement and negligence.

In order for crisis identification to be effectual, a course of action must also be put into place. Identify employees that are equipped to handle such situations.

Guide Your Turnaround Strategy with Honesty and Integrity
In the competitive world of business, not all companies are liable to regenerate after having been through a crisis. This is especially sobering in the wake of today’s financial hardships. This statement alone offers an explanation as to why it is immensely important to be open and honest with employees and other beneficiaries of the company during a crisis situation. There is no room for grey areas and utilizing this piece of advice will leave employees, clients and suppliers with a sense that your business was ethical and honest no matter the outcome of the crisis.

Successfully Implement a Turnaround Strategy with These Tips

  • Instill confidence and earn trust
  • Be open, frank and honest
  • Lead with integrity
  • Be transparent
  • Establish clear communications
  • Listen
  • Be available and accessible
  • Work hard
  • Sacrifice
  • Establish control and performance systems
  • Have discipline
  • Give rewards

Learn From the Best
Throughout history there have been several widely publicized crisis affecting large businesses that had established themselves as household names. Due to the implementation of strong crisis management the following companies worked through and overcame their crisis.

  • Johnson and Johnson (Tylenol): 1982* a disgruntled citizen adds cyanide to Tylenol on store shelves killing 7 people. Though it cost Johnson and Johnson $100 million, the company took action and destroyed over 31 million capsules of product. James Burke, CEO of the company, appeared in ads informing consumers of the actions the company was taking to manage the crisis. Their solution: tamper resistant packaging and being open and honest about the crisis throughout the entire ordeal. Tylenol sales recovered.
  • Mattel: Summer 2007, more than 28 products were recalled. A problem with exports from China ensued. The company dispersed information about the recalls immediately earning the respect of customers and the public. Robert Eckert, CEO of the company conducted 14 television interviews and made over 20 phone calls to individual reporters to keep the public informed. The company fully recovered from the debacle.

A crisis can be managed and the outcome successful if the proper steps are taken and implemented as soon as possible at the formation of a crisis.

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