Legal action can come about as a result of that damage and this is when people start to talk and opinions begin to form. You won’t know for sure in those early days how much reputational or financial damage the crisis might have on the business. There might even be people looking to compound the damage for their own ends. At the same time, the media won’t be off your back for a second.
When all this is unfolding and everything seems to be on fire around you, what do you do? How do you respond in a way that’ll actually make things better, both now and later? There are probably lots of options and ideas running through your mind, but it’s not always easy to decide which path is the right one to take.
We can help you and it all begins with understanding why corporate crisis response preparation is important and what it looks like. We’re going to talk about all that and more now, so keep reading.
The Threat is Bigger Than Most Realise
One thing you can’t afford to do is underestimate the threat. Even if you think corporate crises are quite rare, you’re not quite correct about that. Many of the big and threatening corporate crises don’t even hit the headlines. But the damage they do to the businesses involved remains huge. They cost businesses hundreds of billions each year, and many businesses sink completely as a result of them.
There are various reasons why the threat to businesses is bigger now than ever before. Businesses are more complex than ever, as are the things they sell to customers. Stakeholder expectations are also growing massively, and that can lead to all kinds of problems in indirect ways. And when customers experience something negative, they’re no longer shy about suing.
Businesses operate quickly and the speed of their operations can lead to miscommunication, bad judgements and reactions that are just plain wrong and unhelpful. These things all make crises more likely than they might otherwise have been. That’s why companies are having to spend more time than ever preparing for potential crisis situations.
Crisis preparation is now a core aspect of what businesses have to do and the consequences of not planning for crises can be huge. It’s something that’s too often underestimated and you shouldn’t let that misconception apply to your senior executives too.
The Five Paths to Resolution
It’s a good idea to look at a crisis and split it into primary threats and secondary threats. The primary threats are the technical, operational and financial aspects that form the core of the crisis itself. Whereas, the secondary threats are generally the reactions to the crisis by the company’s key stakeholders.
What matters is making sure you address both of these kinds of threats. They’re both important and they’ll both have an impact on the recovery and long-term success of the business. Of course, you need to address the primary threats first, but the secondary threats should be addressed as soon as possible too.
Having a team of mixed talents in place is important when a crisis first hits. Once that team has been assembled, the primary and secondary threats should begin to be addressed. Thinking about how the crisis might unfold and what might happen next allows you to take back control and make the right decisions quickly. You don’t want to be caught doing nothing but reacting to headlines.
We’re now going to take a look at the various paths to resolution you’ll need to take once a crisis is underway for your organization. Read on and find out about all five.
Control the Organisation
Nothing stays the same after a crisis hits; everything new and everything is different. It’s important not to allow the situation to turn into a boardroom tug of war because that never aids the business. A good crisis team needs to be at the head of the situation, making decisions and mounting the right responses.
The team needs to take control and start making decisions as early as possible. It’s important that the team is made up of people from within the business because external hires can struggle to motivate people and they might take time understanding the business and that can be damaging.
Calm Stakeholders
Things won’t be resolved right away and that’s what stakeholders will want. They just want the problem to go away, as impossible as that might be in practical terms. You need to work on calming stakeholders to ensure they don’t panic and make your problems ten times worse than they already are.
You can do that by talking to each of them on a one to one basis and outline what the plan is and what you’re going to do to turn the situation around. They should know what kind of interventions you’re going to make and what the cost of all this is likely to be for the business.
Resolve the Most Pressing Challenges
There are usually key challenges that are specific to your company and the crisis it’s going through. These are the challenges you should work on resolving first of all before you worry about anything. Your first ideas for how to resolve these issues might not work out, but that can’t deter you.
Be sure to stay focused on these core challenges and do what you can to ensure you don’t get disheartened by new problems that arise along the way. The sooner you resolve the most pressing challenges, the sooner you can start pushing your business towards a more positive future.
Get to the Root Causes of the Problem
As well as looking at the most pressing issues, you need to consider why this problem arose in the first place. If you don’t address the underlying root causes of the crisis, you’ll run the risk of the crisis emerging again and causing you future problems. You won’t want to let that happen.
This might mean having to change some quite fundamental things about your business and that can be pretty scary. However, if it makes your business’s future brighter and more positive going forward, then it’ll be more than worth it. It should be a core aspect of any business’s efforts to respond to a crisis.
Sew the Seeds of Future Success and Stability Early On
As well as focusing on the immediate fallout of the crisis your business is experiencing, you also need to start thinking about the long-term future of the business as early as possible. That means making the business stable as soon as you can so you can start sewing the seeds of future success.
Don’t wait until the crisis has blown over before you start thinking about the strategy for the next chapter of your business’s growth. Instead, sew those seeds early and make an integrated part of your planning. It’ll make the recovery a much more substantial and long-lasting one for the company.
Be Prepared for Crises
Executives and managers should be trained in a variety of disciplines so they can deal with whatever’s thrown at them. However, much of the training that they normally get relating to corporate crisis response preparation is sub-standard. It’s simply not good enough and doesn’t go into the depth required when it comes to preparing your business for potential crises.
One thing that your business can do in order to prepare a little better is to define the main threats that your business is most likely to face. Identifying risks makes it easier for you to understand how you’ll need to respond if a crisis does hit your business at some point in the future.
Doing this will also help to highlight the problems that are currently in place and where your business is weak at the moment. You can then make changes and improvements to your business to ensure you and everyone at the top of the business is ready for how to respond if you ever need to.
Once the business understands its current situation better and knows where its key weaknesses lie, you can start to carry out better and more impactful training for the executives and managers of your business. That learning experience could eventually turn out to be pivotal for them.
Risk prevention is still vital, but being prepared for crises and knowing how to respond to them is important too. Running a business isn’t easy and no matter what you do, you can never be completely sure that a crisis won’t hit you. And at that point, prevention goes out the window and the only thing that matters is your response, so make use of the information and guidance offered before.