Whether you are managing a company or a team within it, you will without doubt find yourself walking head on into a situation where you must make quick decisions and manage a crisis that’s developed.
Now a crisis can come from many directions and is often described as a transformation process where the current system(s) can no longer be maintained and therefore action needs to be taken. It commonly has one or all the following components.
1) The situation becomes a threat to the company.
2) Time is very short when it comes to making decisions
3) The situation is going to lead to fundamental change
4) An event occurs that is unexpected or surprising
It’s important to keep in mind that a crisis shouldn’t necessarily be looked upon as a failure of your risk management planning. As you can imagine it is very difficult to mitigate every unforeseen circumstance and therefore by their very nature can occur despite prior planning.
So, unless you and your team are hiding under a rock, you need to be prepared to deal with a crisis that will come your way at some point.
The first golden rule in effective handling of crisis is to build trust from the outset. Trust is about reassuring all those involved (stakeholders, customers etc) that you and your management team is creditable and capable with a positive commitment to resolving the issue that is fully communicated and transparent.
Next, its a matter of getting to work on following:-
First it’s key that management understand the real nature of the crisis and therefore the need to Diagnose is essential. Information gathering and multiple perspective-taking to see the event from various points of view is a must.
Second, it’s important that that management implements the relevant Damage Control and Containment. This is a period of high activity as you aim to find a turnaround strategy to limit damage to reputation and financial impact.
Finally, with every crisis comes a great deal of Learning that enables business recovery. How was the crisis handled? What new procedures need to be put into place to prevent similar situations happening? What monitoring systems can be put into place that can aid detection of something similar happening in the future.
Of course, identification of potential risk threatening situations should be considered in advance which is where Risk Management comes into play. Risk Management broadly fall into 3 main areas.
First is to identify the areas that are sensitive, potentially damaging and need to be addressed ahead of time.
Once you’ve identified the areas it’s then working out the likelihood of a crisis occurring and potential frequency.
Finally, you need to understand the impact of the potential crisis on the business from various points of view.
The results of your risk management then flow into your contingency planning to develop procedures to reduce the risk and plan for the worst.
So, remember, no matter how well you might plan for risks a crisis can come knocking at any time from any angle. But how you react and navigate it is in your control.
How ready are you and your team for a crisis?