Over the past decade or so, we have witnessed a number of organisations go under as a result of being struck by crises, both natural and man-made. For example, many small and large organisations fell victims of the recent global financial crisis which struck most economies worldwide in 2007. Big trading names went under, profitable businesses lost their economic value over night and small businesses alike were wiped off the map. Those organisations who did not have effective crisis management strategies were the most affected.
Improving an organisation’s crisis management capabilities is the key to ensuring that the organisation is in a position to survive when disaster strikes. Noone can accurately predict the future or when the next crisis is going to strike but that does not mean that organisations should just sit, relax and wait for the next unthinkable to happen and then react. During the strategic planning process, managers should take into consideration all the risk factors that have an influence on strategy execution and organisational value. This means carefully examining all the avenues and establishing what might go wrong and then have strategies and procedures in place to limit or combat the damage just in case something goes wrong.
In developing their organisational crisis management strategies or policies, managers need to know and understand the essentials of a good crisis management framework. Understanding the principles behind this framework will help during crisis preparations and also when developing the capabilities essential for survival during a major crisis. The key to having an effective crisis management strategy is:
# Understanding crisis types: Crises fall into different categories, for example, natural disasters, economic, reputational, human resources, physical, informational, fire, product etc. Various research has shown that, most organisations only plan for natural disasters such as earthquakes, floods etc and fail to consider other man-made disasters. Managers need to move beyond planning only for natural disasters and also consider other disasters specific to the industry. The aim is to view crises not in isolation, but as related to all the others. This is because most crises have a cause-and-effect relationship, thus, any type of crisis is capable of sparking another type and in turn being caused by it.
# Being proactive as opposed to reactive: Effective crisis management is not about responding or reacting to a major crisis after it has occured. It is about being proactive, not reactive. Managers should be able to plan ahead and anticipate the likelihood of any disaster striking then formulate effective procedures for handling the disaster. With human-made crises, it is possible to trace and pick up any warning signals before the crisis occurs. Having the ability to pick up and act on these warning signals will help minimise or reduce the damage or the entire crisis from occurring.
# Training and educating employees: Employees and other internal stakeholders of the organisation should be made participate in crisis training programs. This is essential for equipping them with the knowledge and procedures they need to follow in the event of a major crisis.
# Nurturing important stakeholder relationships: When a company is faced with a major crisis, it will need the help of other external stakeholders to weather through the storm. For example, it could be relationships with the media, fire departments, police departments and other emergency departments, the governement, providers of finance etc all of whom may be called on to help in a major crisis.
For crisis management to succeed, it must be embedded in the overall strategy of the business. It must be part of the integral design of the organisation.