Business crises affect everyone. No matter your industry, only one thing is certain in the business world: uncertainty. While your day-to-day operations might be predictable most of the time, every now and then something unfortunate is bound to arise. Your competition tries to do you in, the numbers don't line up, systems go down, management messes up or a major hurricane comes to town. Awareness and preparation are the keys to managing a big, unexpected crisis with as little negative impact on your business as possible.
TL;DR (Too Long; Didn't Read)
A business crisis could be a crisis of malevolence, financial crisis, technological crisis, crisis of organizational misdeeds or a natural crisis.
What Is a Business Crisis?
A Crisis of Malevolence
A Financial Crisis
A Technological Crisis
A Crisis of Organizational Misdeeds
A Natural Crisis
Hurricanes, floods, earthquakes, tornadoes, fires and other natural disasters happen, and they impact our businesses, our employees and our customers. When Hurricane Irma came to southern Florida in 2017, LendingOne took action before the storm even arrived. They sent employees to other regions, provided housing and temporary work spaces, ensured all data was backed up in the cloud and ensured that the equipment necessary for operations was available in other regions. Because of their advance preparation, LendingOne was able to make it through the hurricane while staying financially sound.
Almost every region of the United States is prone to one or more kinds of natural disasters. Research insurance options for your business and then craft a natural disaster plan that accounts for a variety of scenarios.
Plans you have already crafted for other crises, such as financial crises and technological crises, can be incorporated into your plan for natural disasters. Depending on your industry, remember to include things that can strengthen your image and relationship with the community, like offering volunteer hours in the recovery effort, free water or even space for a first-aid tent to set up shop.
Who Helps With Crisis Management?
In each of the types of crisis in business, proper management is key to recovery. If you try to ignore a crisis, it tends to grow and can take your business under. Crisis management is about crafting plans and leadership teams that are prepared in case of emergency and know how to follow an agreed-upon plan to minimize the impact of the crisis on your customers and stakeholders.
Different crises could require vastly different crisis management plans and teams. In every case, having excellent public relations spokespeople is to your distinct advantage. When a large crisis occurs, you might even consider hiring contracted crisis management public relations specialists. They have the training and experience necessary to help guide your company through the tough stuff, with the added advantage of offering an outside perspective.
In addition, technological crises require a strong technology team. Financial crises require people who know the ins and outs of the financial side of your industry, including enrolled agents or other accountants. Crises of organizational misdeeds necessitate a strong human resources department, while crises of malevolence or natural disaster require all of the above.
As you build your business, remember to always keep your public relations, accounting and human resources teams strong and growing. They are the people who have the most power to impact the outcome of any business crises your company encounters.
Five Crisis Leadership Skills
In addition to the leaders in public relations, accounting and human resources who are prepared to help address crises of natural disaster, misdeeds, malevolence or finances, be sure to plan your everyday leadership teams. Your employees will look to their management teams for reassurance about the direction of the company, and those managers will also look to you for the same. Cultivate these five crisis leadership skills to put everyone at ease and to continue in a positive direction with your business:
- Communication: Fear often comes from what we do not know, so effective leaders are skilled communicators. They know how to get the facts and communicate them clearly to their teams so everyone is on the same page. Excellent communication skills help to quiet the rumor mill and keep everyone on task even when times are tough.
- Accountability: People respect leaders who are real and accountable rather than those who pretend to have it all together while secretly messing up behind the scenes. Encourage your leaders to be accountable with their teams so they know how they are performing and what their leader is doing on any given day. Accountability builds trust, and trust is essential when a crisis hits.
- Decision making: Times of crisis can feel uncertain and foreign, so the last thing you want is someone in charge who cannot make decisions. Leaders who have strong decision-making skills are able to filter out the necessary information while blocking out anything that is nonessential in order to make decisions that benefit everyone on the team.
- Positivity: Positivity is not about being fake. To the contrary, skilled leaders are able to see things as they are and understand what they can and cannot control. They choose to focus on the things they can control, lead their teams to do the same and then celebrate those accomplishments. Positivity has the potential to create forward momentum, even under the most difficult of circumstances.
- Emotional management: Emotions can be high when crises hit and your employees and stakeholders will be looking to leadership for reassurance. High levels of emotional intelligence and strong emotional management skills ensure that a leader is capable of addressing his own emotions in a healthy way while helping everyone else navigate uncharted territory.
- Management Study HQ: What is Crisis?
- Fast Company: Conquering the 3 Most Common Types of Company Crisis
- Inc: 5 Things Successful Leaders Do in a Crisis
- The Wall Street Journal: Crisis Leadership: Five Principles for Managing the Unexpected
- Forbes: Five Ways To Demonstrate Leadership In Times of Crisis
- Inc: How Can You Protect Your Company From the Next Financial Crisis?
- In Case of Crisis: 3 Crisis Management Case Studies We Can Learn From
- BCM Institute: The Crisis Resulting from Organization Misdeeds
- Inc: I'm a CEO of a South Florida-Based Company and Here's How We Prepared and Braced Ourselves For Hurricane Irma
- Investopedia: Crisis Management
- Forbes: The Biggest PR Crises Of 2017
- Forbes: Starbucks Gets An A In Crisis Management