by Jason Richmond, CEO and Chief Culture Officer at Ideal Outcomes, Inc.
In a rapidly changing world, it feels like all types of crises—from natural disasters to civil unrest—might be around the corner. From a business standpoint, any unforeseen event can send your company into a tailspin: a data breach, or even a social media misstep. But such an occurrence doesn’t necessarily spell disaster.
With effective company crisis management, you cannot only ride out the situation but come out of it stronger than ever. Below, we’ll explore corporate crisis management and identify some ways you can adapt to a changing world.
What is Crisis Management?
Crisis management is a process that helps companies respond to negative events and emergencies that pose a threat to the organization, its reputation, and stakeholder groups.
The term refers to more than simply responding in the moment; in fact, the process starts much earlier. Risk management and preparation are as important as managing the crisis situation itself.
The Importance of Effective Crisis Management
Crisis management is a process that helps companies respond to negative events and emergencies that pose a threat to the organization, its reputation, and stakeholder groups.
The term refers to more than simply responding in the moment; in fact, the process starts much earlier. Risk management and preparation are as important as managing the crisis situation itself.
The Bad: Facebook’s Handling of the User Privacy Scandal
In 2018, a whistleblower revealed that Cambridge Analytica, a British company hired by the Trump campaign, had gained access to data on more than 87 million Facebook users. The resulting scandal led to massive fines, including a $5 billion fine imposed by the U.S. Federal Trade Commission.
What can business leaders learn from Facebook’s poor crisis management? The company’s CEO, Mark Zuckerberg, made fundamental errors in communication. He waited five days before making a statement and then, when he did so, sparked criticism by writing a post about the scandal that did not include the word “sorry”. While he did later apologize, it was deemed too little, too late.
The Good: Procter & Gamble’s Handling of the Tide Pod Challenge
The biggest corporate crises can arise out of nowhere, and that was certainly the case for Procter & Gamble when the so-called Tide Pod Challenge hit social media in 2018. While Tide wasn’t to blame for the phenomenon of teens eating laundry pods, the brand took immediate action and, as a result, emerged with its reputation intact.
What went right? Tide lobbied to remove the videos from social media, issued public service announcements, and created social content of its own, enlisting NFL player Rob Gronkowski to remind consumers not to eat laundry pods. It’s a textbook example of planning for the unexpected and maintaining timely, effective communication.
How Crisis Management Works
What does a solid crisis management strategy look like in practice? Crisis management plans can be broken down into three stages:
Pre-crisis
Preparation is key, both to prevent a disaster in the first place (for example, by conducting a risk assessment and establishing safety protocols) and to equip the crisis team to respond at a moment’s notice.
Put together a crisis management team, allocating clear roles and responsibilities, and run training sessions to make sure senior managers are familiar with the crisis plans. It’s also a good idea to appoint a spokesperson for crisis communications and perhaps prepare draft statements for public relations teams and senior executives, as well as a business continuity plan.
Crisis Response
When a major crisis occurs, such as a natural disaster, it’s important to keep a cool head. Look at the situation and establish the facts before you act. Then respond appropriately and quickly, taking any necessary steps to ensure public safety. And don’t hide away. Communicate with authenticity, showing empathy and sharing information, but staying out of the social media conversation if there’s a risk it might negatively impact the situation.
Post-crisis
Once a crisis situation has passed, it’s tempting to give a big sigh of relief and carry on as before, but that would be to miss out on a big opportunity to change for the better. Hold an internal investigation to understand the root causes of the negative event and find ways to prevent it from happening again. Analyze your response, too. Did you have the right crisis management teams in place? What changes could you make to do better next time?
Signs That You Need a Crisis Management Plan
The clearest sign that you need a crisis management plan is if you don’t already have one. Nobody is immune to unforeseen disasters and corporate crises, and every company should have a solid strategy in place to anticipate potential crises and deal with them effectively.
If you have a strong company culture—if teams work well together and your company’s core values are at the heart of everything you do—then you’re already halfway there. Conversely, an ineffective culture can make you less resilient to shocks, so if you spot any of these warning signs, it’s time to prioritize crisis readiness:
- You don’t speak with one voice. Authenticity and consistency are crucial to crisis communication. Make sure that all public statements are imbued with your values.
- Teams are siloed. When urgent action is required, it’s more important than ever for cross-functional teams and key stakeholders to work together effectively.
- You don’t have a culture of learning from mistakes. Admitting what went wrong is essential if you’re to learn from even the worst-case scenario and turn it into an opportunity.
Build Your Crisis Management Team
Crisis management is critical in a changing world. By being prepared and having a clear plan in place, you can minimize the damage caused by a crisis and even turn it into an opportunity to improve your company.
The first step in crisis preparedness is to create the right conditions for your team: strong lines of communication, great collaboration, authentic company values, and the flexibility to learn from mistakes.
At Ideal Outcomes, we help businesses build a healthy corporate culture so that they’re ready to respond effectively to business crises—and equipped to emerge even stronger when the dust has settled.
Contact us today to find out how we can help you turn potential crisis situations into opportunities for your company.