Crisis management is a process used to eliminate or reduce the harmful effects of a crisis event and establish methods to deal with them when they arise. Effective crisis management takes into account the actual and perceived effects of the event and provides options for responding internally and externally to mitigate the effect on the business.
A crisis is often defined as a crucial or decisive point. This can apply to any situation where a sudden change is taking place and is often associated with an emotional or stressful event. A crisis may not be predictable, but it is something for which the potential for damage or harm can be identified, analyzed, and planned for. A crisis management plan is developed with the goal of protecting a company’s assets—employees, stakeholders, community, facilities, merchandise, equipment, and so forth—and providing guidance on coordination of internal and external resources.
The ultimate goal of a crisis management plan is to provide a process that helps leaders make constructive and informed decisions at crucial points during a stressful situation.
Crisis Management Plan Development
A crisis management plan must support the organization’s overall purpose, goals, and strategy for business operations. It is a guiding force for people, resources, and assets that focus activities to transform a crisis situation from unpredictable chaos to a manageable steady-state that can be assessed and addressed in a composed, professional manner. It explains the process for required actions and answers pertinent questions that might arise during the crisis.
The format of a crisis management plan contains elements that can be adapted to most events or situations to identify, reduce, or eliminate risk. It takes into account future probabilities, allocation of resources, business strategy, strengths, weaknesses, and limitations. To be effective, a crisis management plan must be formulated, reviewed, and implemented prior to the occurrence of a hazardous event. The plan must receive proper attention and commitment from management.
Unfortunately, there have been occasions when organizations have suffered by cutting corners when developing a course of action in response to anticipated or unpredicted disasters. In other cases, companies will sometimes reserve a crisis management plan for major catastrophes; while smaller but more common and more frequent flair ups are happening all around them and causing losses. Part of the reason for this shortsightedness is a misconception that the risk management process is only applicable for those environments that historically experience hazard events. The reality is that risk is present in all facets of business and life. To ignore this can permit a crisis to erupt and can have devastating effects on a business or community.