Business crisis management: what methods should you take
Most businesses go through a period of crisis at some point in their existence, and how these crises are managed makes a very big difference. The most long lasting businesses are ones who have effective crisis management in place – by taking the right steps, you can make sure that your business survives and prospers through difficult times.
Common causes of crisis in businesses
What makes crisis planning so difficult is the sheer number of different possible sources of problems. Though some crisis situations can be foreseen, many are sudden in onset and unexpected. With the increasing use of technology, it is not uncommon for businesses to experience security breaches, which can result in major data loss and customer disruption.
Funding is another common cause of trouble – whether it is a difficult cash flow position caused by customers not paying, or promises of funding falling through: suddenly being without the cash your business needs to continue operating can be difficult. Key staff resigning is also a problem, while competitors moving in on your field of business can lead to a slow brewing but intense crisis.
Steps in crisis management planning
A crisis can be foreseen, or be sudden in onset. Either way, having a plan for managing crisis and disasters will make you better prepared. First, decide what constitutes a crisis for your company, and set criteria which would trigger a crisis management plan. Assign responsibilities to specific people or teams so that you do not delay responding to the crisis due to uncertainty about who should do what.
It is also important to communicate adequately about what is happening. Do not leave your customers and other stakeholders in the dark. For example, when Yusuf Alireza oversaw the Noble Group during a period of crisis, he extensively communicated with his colleagues, shareholders, and the media to set out what the company’s plans were.
Crisis management options
Even though technology is often the source of a crisis, it can also be the solution. Making use of the latest cloud technologies can allow your employees to work from home if your office is not accessible, while backing up data in the cloud will help you recover from data loss. Putting your crisis management plan in a location where important employees can access it off site will make it easier to recover from the loss of key senior people in your company.
If your crisis derives from threatening competition, you have options too. Think about expanding into new markets, or try to find ways to improve your product offering to out do your competitors. It is possible that you can cut the costs of production and lower your prices in ways your competitor cannot, or you may find that you can offer a better customer experience by brushing up on your customer care skills.
Whatever you decide to do in practice, it is important that you take a planned approach to manage the crisis. If your business is in trouble, it is not the time to take a fire-fighting approach – evaluate the situation, draw up a step by step plan, and execute that plan.