How can a Crisis Management Plan save your business?

In 2017, the US company United Airlines lost $800 million in just a day and it all started with a dress policy problem of 2 passengers, in addition to another brutal video of a passenger being dragged from a plane. This case and like many others are examples of wrong crisis management. It is important to have an efficient crisis management team and good crisis communication in order to respond quickly to the situation at hand.

What is crisis management? How to implement a successful crisis management plan?

Nowadays, we are vulnerable to multiple risks, dangers, and crises, whether they are natural, related to occupational accidents, product quality, etc. It is important to react quickly in order to save the company's finances and economy. Implementing a successful crisis management plan can help companies to deal with their problems and maintain their brand image intact or recover it. 

This is what KFC showed in their UK crisis in 2018, where they had problems in their supply chain delivery and caused the close-down of their restaurants for quite some time. By applying an intelligent crisis management strategy, KFC UK managed to keep its employees and customers informed about the situation. Therefore their brand image was preserved and they managed to use social media to communicate and own up to their mistake. This is an example of good and effective crisis management.

What is crisis management?

Crisis management in the industrial world appeared in the 1980s. In order to react properly and to fully understand what crisis management is, the crisis itself should be identified and understood to see how it affects the company.

What is a crisis?

In the business world, a crisis is a problem that a company is facing and it can fundamentally change its processes. It is a direct menace to the well-being, reputation, credibility and sometimes even the survival of a business. It can be a sudden and an unexpected event that faces the employees and leads to the disruption of an organisation.

A crisis can be of various and very different types. It can go from a product problem to a natural disaster, passing by breaches (infections, vandalism …)  in a company, technological failure, or like the crisis we are facing today, the global pandemic caused by Covid-19.

Crisis management

Crisis management is the process that an organisation adopts to react and to recover after an unexpected event and threatens the organisation itself.

Implementing a crisis management plan

When a crisis hits the organisation, it usually comes as a surprise and it is a major threat to the corporation. Therefore decisions should be taken rapidly to avoid major losses.

Usually, a crisis shows the flaws of a process and it is a sign and an alarm that the old system should be replaced. If it was not the case and the change did not take place, this shows a great failure of the capacity of the crisis management of an organisation.

To help corporations implement a successful crisis management plan there are standards such as the ISO/DIS 22361 standard and the standard BS 11200 in the United Kingdom. Both standards provide guidelines and good practices for adopting a crisis management plan.

Why implement crisis management?

The necessity of crisis management is crucial to successfully cope with an unexpected event, make important changes in the processing system of an organisation and fully recover.

It allows:

• The preparation of workers to intelligently face the crisis and its consequences;
• The rapid adaptation of employees to the new changes of the corporation:
• The understanding and the analysis of the crisis’ origins and taking the right course of actions to deal with it;
• Managers to take the right decisions and adopt the best strategies to come out of the destabilising conditions and to steer the company on the right path of recovery;
• Managers to detect the beginning of a crisis, act and alarm all parties concerned about the possible consequences and make fast corrective actions;

These actions and preventive measures in the crisis management plan are made possible thanks to a crisis management team (CMT) and above all a great way of communication! The CMT consists of members that have the qualifications and technical knowledge to rapidly identify, assess, understand and deal with unanticipated situations, from the beginning until the point of the recovery phase.

Building the crisis management team

According to ISO/DIS 22361 a crisis management team is “a group of individuals functionally responsible for leading the organisation’s crisis management response”.

The CMT is composed of members from different departments of the organisation. They are usually chosen from: marketing and communication, legal, risk management, information technology (IT), finance, HR, warehouse and impact/damage assessment. There might be more representatives depending on the structure of each organisation. In addition, in large organisations each department could have its own CMT.

The CMT is managed by a leader who’s usually the CEO or one of the senior managers. In some companies, the leader position is voted and turns are taken in a defined period. The leader’s role is the most important one as he is to orchestrate the whole execution of the plan when the crisis hits. Along with the communication team they must ensure that all the data and information circulates correctly and rapidly among the CMT. They also make sure that all the stakeholders receive all the necessary information. In addition, they communicate externally about the company’s situation and their handling of the crisis, especially when it comes to product recall from the market.

The role of a CMT is to manage, monitor and ensure that good actions are being carried out. Their missions briefly are:

• The planning phase: anticipate, assess, prepare the potential risks, vulnerabilities and the actions to take when they occur;
• The crisis phase: respond, detect and monitor the first signs of a crisis, evaluating it and activating the actions in the pre-defined plan and communication;
• After the crisis: review, recover and evaluate all actions taken and their effectiveness, communication and the crisis management plan if necessary.

The most important action of the CMT is elaborating the crisis management plan.

Crisis management plan playbook and report

When the CMT decides or adopts different scenarios and strategies for an upcoming crisis, this information is drafted in a playbook or document that defines all the steps and actions to take when needed. In addition to the plan, all the members are mentioned and each role is predetermined in the crisis management plan document/record. This record is communicated to all stakeholders in order to understand which department is represented and by whom. After dealing with a crisis, a report is issued including all the actions and measures taken to resolve the problem and recover.

All this information can be centralised on a single digital platform, which allows to keep track of all the records. The crisis report can be digitised and actions can be taken rapidly thanks to an automatic notification system that alerts the parties concerned. Monitoring the crisis through statistical tools and dynamic dashboards will make the representation and the advancement of the situation easier to communicate to all stakeholders. 

The use of a digital platform to take actions can be of great use in the case of multi-site organisation where all the data is collected in real-time and updated automatically. BI reports are generated automatically and sent directly to the CMT in order to communicate the necessary information. In addition all these documents can be stored, archived and easily accessible by all the employees and stakeholders thanks to an Electronic Document Management (EDM) system.

Finally, a digital tool can be a great asset for the crisis management plan and can greatly contribute to the limitation of losses and brand image.

A large number of organisations don’t have any crisis management capability. And if they have a capability, it may be less effective due to poor planning and ineffective crisis management team. Hence the importance of choosing the right individuals to build an effective CMT that will draft a flawless crisis management plan to save your company and limit losses when the crisis hits. Having a digital solution as an ally can help in the process of strengthening the communication capabilities of the CMT and make fast decisions. In addition, there are existing guidelines to help companies install a successful crisis management strategy. So, where does your company stand concerning your crisis management plan? Did you choose your CMT carefully?

Go further

> Improve your crisis management plan monitoring with BlueKanGo’s digital platform and its app Power BI (available on BlueKanGo’s Marketplace)