5 Tips for Business Crisis Management

by securedatamgt | 09 Dec 2015

Crisis Management

Most businesses will go through a rough patch at one time or another and will be confronted with the task of managing a crisis. Managing a crisis poorly can make the problem worse. It’s important that businesses carefully consider their response to a crisis; an effective crisis management plan will make the recovery period shorter.

1. Take Responsibility

Taking responsibility is always hard, especially if a business is plunged into crisis because of the actions of a few individuals. However, it’s important that a business admits responsibility for a mistake as soon as possible. Only after a business has come to terms with its problem can it start the process of fixing it.

The BBC has reported on how Volkswagen has been handling its own corporate crisis and commended VW bosses for taking responsibility for the saga, despite claims that only a few VW employees were involved with the emissions tests rigging.  The former chief executive of the car company, Martin Winterhorn, resigned promptly after the incident. Such a bold move was undoubtedly in the best interest of the company and probably did help limit some of the immediate publicity damage.

2. Communication

After the problem has been identified it is important that the clients and customers affected are notified as soon as possible. Leaving them in the dark is only likely to fuel later frustrations and cause further distrust. A business should be transparent when communicating with clients in the wake of a crisis; this might mean disclosing information that will leave clients dismayed, but it is ultimately better that they understand the full extent of the problem sooner rather than later.

3. United Front

Blaming others will only lead to bitterness among employees and a haemorrhaging of employee morale. Even if only one individual is behind the chaos the entire business must be held accountable. Very often human error is the cause of a crisis; for instance, the recent data breach at the holiday company Thomson this summer was due to the actions of one individual who during a lapse of concentration leaked an email containing the personal details of customers. Thomson however did not go on to blame that particular employee in their press statements; they held their entire enterprise accountable for the mistake which made pledges of meaningful change seem more convincing.

4. Reflect

Yes, being quick off the mark to turn things around for a business is probably going to be an employers top priority after a crisis, but a little bit of patience never went amiss. The Labour party’s plan of action after the disastrous General Election (a hasty leadership contest that has left the party divided and the party establishment resentful of their new leader), is evidence enough that a rushed job can make things go from bad to worse.

Take time to reflect about what went wrong and how best to prevent it happening again in the future. Assess the full extent of the damage done before making plans to reverse it. A large scale corporate crisis that affects client’s in a number of different countries, such as the VW scandal, could take months or even years before all the consequences become known. Seek independent advice from a specialist or create a detailed recovery plan. Missing out crucial recovery steps means that falling victim to a crisis is even more likely in the future.

5.  Make Lasting Changes Not Empty Promises

Short term improvements rarely satisfy the public appetite for genuine change in the aftermath of a crisis. Implementing meaningful change does not entail simply making empty promises of reform – Sepp Blatter style. Significant corporate restructuring is never an easy process. Often the investment of time and capital is required. That said, if change comes easy it normally means you are not doing it right.

Reforms, if implemented properly, can go a long way to erasing a company’s murky past. The clothing brand, Primark, came under attack in 2013 when the Rana Plaza clothing factory in Bangladesh collapsed, leading to the death of over 1,000 workers.

Since the incident Primark has received praise for its quick response to the catastrophe, helping raise money for worker’s families, and also for its efforts to improve the safety of its other remaining factories. Consumers are willing to forgive and forget, as long as businesses are willing to make lasting changes that result in tangible benefits for the consumer and employees.