Have you had a time in your business when you experienced a crisis? What did you do to manage it? Having a crisis management plan is the probable solution to overcome these crises.
This article will discuss how you can create a crisis management plan, or CMP, for your business. Additionally, it will provide ways to identify probable risks, make plans, and implement those plans that can help you manage crises when they come.
What is a crisis management plan?
Before we go on to define what a crisis management plan is, we need to know what crisis management is.
Crisis management is when companies identify a threat or a negative event, monitor it, make plans, and implement those plans to handle the crises they may face.
Usually, a crisis is an unwanted event that may arise during a company’s existence and operation. These crises can be of different types, but the most important thing is to have a plan to deal with such a turn of events.
On most occasions, it is not a matter of if but when a crisis will occur, and that’s where a crisis management plan comes in.
So a crisis management plan, or CMP, is a detailed plan that outlines the various actions that will be taken when a crisis occurs and those responsible for managing the crisis.
Moreover, the plan deals with the response to a crisis, ensuring the company comes out successfully from it.
Types of Crises that Require a Crisis Management Plan
Different types of crises are bound to knock at the door of a company. They have different causes, and in handling them, you must provide specific solutions. Let’s take a close look at the five types of crises that your business could face:
1. Natural Crisis
This refers to unwanted outcomes resulting from natural events such as a pandemic, typhoon, flooding, or any natural disaster.
Usually, these events impact businesses located within the area of impact. The impact of these crises can be anticipated, and proper plans can be made to cushion them.
2. Financial Crisis
A financial crisis is one of the most common crises any business is bound to face. In fact, some companies may suffer from this type of crisis more than others.
Also, a financial crisis could occur when a company loses assets due to an economic downturn, which could seriously affect its finances.
Moreover, this could lead to the company shutting down except there is a plan to respond to such an event.
3. Technological Crisis
Technological crises are bound to occur in technology companies; however, the severity of the impact may differ. In addition, technological crises such as website shutting down and storage device malfunctions are prevalent in technology companies.
Moreover, how a company responds to risks is one of the most important aspects of a CMP. Hence, there must be a ground plan to cushion the risks.
4. Confrontational Crisis
Sometimes, situations arise in a company where one or more employees get involved in confrontational situations among themselves. When these happen, the company must be ready to deal with such a turn of events.
Moreover, companies should ensure a ground plan to manage this crisis effectively and protect their image and reputation.
5. Sabotage Crisis
This often occurs among organizations, even among employees, with the main intent of sabotaging a company’s image and reputation.
Furthermore, individuals or companies may use a bad record from that company, which an insider could provide, to tarnish the reputation of that company. Therefore, companies must have a CMP for this crisis; otherwise, they may never recover.
Why is it Important to Create a CMP for your Business?
Crises, as we stated, are a series of unwanted events a company could face, but Why should a plan be made for a “disastrous” event that may not even occur?
It’s like asking why soldiers train and prepare as if they want to go to war even when there’s none. The idea is not to be caught off guard. Moreover, you want to be ready when crises eventually happen, and you want to know exactly what to do in such situations.
So, here’s why you cannot afford but have a CMP on hand: A CMP affords you three things:
First, it offers you insight into identifying possible threats or negative events that may happen to your company. You have to be able to foresee a crisis and then make proper plans for it when it comes.
Secondly, CMP offers you contingencies to minimize the effects of the different crises on your company when they occur or completely prevent them from ever happening. This is something you don’t want to joke with.
Thirdly, with CMP, you can know how best to respond in times of crisis. This is the most important reason for having a CMP.
Some companies may drown in crises, especially when they do not have a response plan in dire times. Hence, CMP is the most preferred plan you could ever make to save yourself and your company when a crisis eventually happens.
A Step-by-Step Guide to Creating a Crisis Management Plan
In creating a crisis management plan (CMP), there are specific things, more like components, that you must factor in. These components are arranged stepwise to help you create a proper CMP for your business.
Here are the seven steps you can use to create a CMP:
1. Select the Crisis Management Team
The first step in creating a crisis management plan is to select the leaders who will form the team.
These are the individuals who would collectively play their part in the identification, planning, monitoring and implementation of the CMP. Moreover, they would be responsible for taking all the necessary actions during the crisis.
2. Identify Probable Risks
Once you’ve been able to select your team, you all must work collectively to identify probable risks that may lead to a crisis.
In addition, you must consider the different types of crises that can occur and then make meticulous bailout systems that could cushion the crisis. Once you can identify probable risks, you can better prepare a CMP.
3. Determine the Impact on Your Business
Next, you must be able to ascertain the extent of the impact that that crisis is likely to have on your company. You should be able to conduct an impact analysis on your business, which will serve as a key component of your CMP.
One mistake that could run your company aground is when you have a slight estimation of the impact, which then turns out to be heavy and dangerous when such a crisis actually occurs.
4. Determine Contingencies for the Crisis
This means the way out of the crises you may have identified and their different impacts on your business. This is where you brainstorm what to do when faced with a crisis, making it the bulk of the process.
Furthermore, you and your crisis management team must see far into the crisis and create ways you can handle each crisis that may arise..
5. Create the Plan
You create the plan when you’ve successfully gathered all the above components. This plan has to be detailed enough to contain the different identified probable risks, the impact, and the contingencies to handle such a crisis.
It also has to be simple enough for every member to understand what needs to be done when it comes.
6. Integrate Employees with the CMP
At this point, you and your crisis management team are well-informed about the CMP. You’ll have to integrate the rest of your employees with the plan that has been created.
They all must know exactly what they must do in response to any form of crisis that the company faces. Moreover, you could even set out a mock crisis scenario so your employees can rehearse how they’ll respond in a real-life situation.
7. Review the CMP
This is the last step in creating the CMP which can be done as often as possible to check the whole plan and eliminate errors.
Additionally, a review is needed to accommodate changes such as new technologies and a different scenario that was not included initially but may influence the CMP.
Furthermore, all these steps must be followed in order, as each one is related to and dependent on the other. With a strategic crisis management plan, you can either mitigate or at least reduce the impact of a crisis on your business.
Conclusion
The fact remains that crises are bound to happen to any business, and there is a likelihood that your business will experience its fair share. However, the best you can do is prepare for the crisis when it comes.
Moreover, the extent to which you can respond during a crisis depends on your depth of preparation. Therefore, take these steps and put them into action so that you’ll come out unaffected when a crisis comes.
