8. Crisis Management

Crisis management is the process by which an organization deals with a major threatening event. Whether an earthquake destroys infrastructure, computer hackers attack a company’s website, or a key manager leaves the company with no replacement – all these events must be addressed immediately.

Many different models of Crisis Management exist in the public and private sectors. This section argues that Crisis Management can best be defined by the following six-stages process model:

Stage 1: Avoiding the Crisis
Crises are unpredictable, but they do not have to be entirely unexpected. As a manager, you have to prepare for crises when things are going well. Key to good preparation is not only crisis management planning but also the implementation of training and exercising.

• Include crisis planning in your overall strategic planning process and talk to people from other areas of your company about risks in your industry.
• Perform the SWOT analysis: Find strengths and weaknesses of your company as well as, environmental opportunities and threats for your business.
• Develop a crisis-risk list: What are the worst things that could go wrong? And what are the most likely crises that could occur?

Stage 2: Preparing to Manage the Crisis
In the second step, a manager should develop a crisis plan. Consider everything that might go wrong, and assess the costs if it should. After selecting a what-if scenario and possible consequences he/she should brainstorm the kinds of decisions that will have to be made.

• Perform a reality check on your plan by brainstorming possible side effects.
• Form a crisis-management team and create a communications plan with key persons.
• Think about what resources will be needed to handle the crisis.

Stage 3: Facing the Crisis
In this stage, you have to face unpleasant situations – things get serious! But is the current situation a crisis? In this stage, you have to characterize the event and evaluate the size of the crisis. Furthermore, you have to evaluate honestly how you manage the situation.

• Estimate the size of the crisis: How many people are involved? Who and where are they?
• Get a team in place as quickly as possible.
• Get all the information you can get about what’s happening.

Stage 4: Containing the Crisis
The fourth stage is about damage control and communicating. You have to make decisions – and you have to make them quickly. Be on the scene and show physical presence, respond to your people and communicate critical information to them.

• Stop rumors and false information. Inform key people who need to know and do so quickly.
• Stick to the facts and Make your message straightforward and confident.
• Communicate honestly (otherwise people may blame you for failure).

Stage 5: Resolving the Crises
A crisis requires fast, confident decision making. Therefore, managers should not be paralyzed when there are no standard operating procedures. Often, they just have to trust their judgment and take action. By making decisions, ensure that the safety of the people is always prioritized and that you grasp new developments.

• Focus on what is in your control and ignore what is not.
• Help everyone work together and draw people together to act as a team.
• Avoid blaming others.

Stage 6: Learning from the Crisis
Once the crisis has passed, you can use the experience and make changes to prepare for a similar crisis. A manager should review how the crisis was handled and plan ahead.

• Try to find out, if there were warning signals that you may have ignored.
• Evaluate what you did right and what you could improve.
• Get input from everyone.