What do you think of when you hear the word “crisis”. Within the scope of an enterprise, a crisis seems to be something terrible, something that no leader or administrator from small and medium-sized organizations to large-scale corporations wants. meet at work.

But life is not like a dream, crises are often inevitable that any business must go through at least once in their career. For example, the COVID-19 pandemic – something that can be considered a disaster. No one wants their business to have to narrow its scope of operations or even close because of the current pandemic difficulties.

Therefore, it is necessary for managers to equip themselves with knowledge about crisis management, which can be compared to the action of “preparing for the worst”.

In today’s article, Malu would like to give you an overview of crisis management such as definitions, steps in crisis planning and much more.

Crisis Management – ​​What is Crisis Management?

Crises are important events of an organization or business that can seriously affect their reputation, brand and financial situation.

The cause of a crisis for a business can come from internal or from external causes.

Because of the unpredictability of crisis events, businesses should have certain contingency plans in place to prepare for the worst. That is the birth of crisis management activities in businesses.

Crisis management is a process of managing and preparing for emergencies that are beyond the expectation of a business.

The impact of this event can affect the interests of the parties involved in the business, including: Shareholders, employees, customers and even inside the business. Crisis management is an extremely important element in the PR activities of businesses.

Crisis management process

Below is the crisis management process commonly applied by large enterprises around the world to prepare for their worst-case scenarios.

1. Before the crisis

The first step in the crisis management process is to prepare for any bad situation that may happen to the business.

Activities that businesses need to implement during this stage are: Create a crisis management plan, create a crisis team, and set up simulations to test the effectiveness of your plan. .

An activity few business owners know to deal with a crisis is: Prepare crisis-related messages that you want to convey to the public.

This is a smart way to quickly extinguish the “fire of anger” from the public when the real crisis occurs.

2. When the Crisis Happens

These are the actions you need to take to respond to crises when they do happen. All the plans you made in advance will have to be implemented during this phase.

Usually, you will have to make statements, press releases that express the official voice of the business to stakeholders related to the organization such as shareholders, employees, customers and the public.

3. After the crisis

After the crisis is over, your work does not stop here. You’ll still need to continue to stay up to date and answer questions from business stakeholders to help them understand more about the current state of your business.

And most importantly, you need to analyze and evaluate the effectiveness of your crisis management process:

• What difficulties has the business faced?
• Have you limited the worst effects of the crisis?
• Lessons you can learn from the crisis?

Answering these questions is extremely important so that you can better handle the next business crisis.

7 steps to creating a crisis management plan

Crisis management planning is the process by which an enterprise proposes and adheres to pre-existing rules to prepare for the worst-case scenario.

The reason for businesses to plan for crisis management is to calmly get through their most difficult days. This is also a smart way for businesses to limit the bad effects from the crisis that can affect them.

Here are a few benefits that businesses can derive from having a clear crisis management plan in place:

• Help businesses maintain their credibility and image in the eyes of customers, competitors and stakeholders after the crisis.
• Helps protect internal components of the business when the worst happens.
• Put your business in a state of readiness to deal with the worst situations for you.
• Maintain stable business operations even in times of crisis.

There are a total of  7 steps you need to take in the crisis management planning process , namely:

Step 1. Identify the types of crises that businesses may encounter : Financial crisis, human resource crisis; organizational crisis; technology crisis; crisis related to natural disasters, epidemics.

Step 2. Determine the impact of the crisis that can affect the business:  Reduced revenue, lost customers, damaged brand image, costly in terms of costs, etc.

Step 3. Identify actions that need to be taken to respond to the crisis:  such as applying past actions to respond to the current situation; Classify the type of crisis to have a specific treatment;….

Step 4. Determine who will handle the crisis.

Step 5. Establish a response plan:  time to resolve, resources involved, who is the official spokesperson of the business, the cause of the problem and ways to limit the recurrence of the crisis in the future. future.

Step 6. Communicate and get people in the business  to understand the importance of a crisis management plan.

Step 7. Monitor and regularly  update crisis handling  if new factors appear.

>  Guide to effective business cost management

The circle of a crisis

The crisis of a business can be explained through the following steps:

1. Warning.

While it can be difficult to predict when a crisis will strike, you can recognize the warning signs of big waves. .

You can recognize these signs from employee behavior, statistics and the company’s financial situation.

2. Risk assessment.

Once a crisis hits, you need to immediately assess how the crisis will impact your business and its stakeholders.

3. React.

Once the problem has been identified, you need to decide what actions to take in response to the crisis.

After that, everyone in the company must follow the laid out plans to solve the problem.

4. Administration.

Next is the administration phase. This is the time when you need to monitor each development related to the crisis to make appropriate decisions.

5. Crisis resolution.

This is the time when the crisis is gradually coming to an end. You need to make key decisions to end the crisis. In addition, you should also gradually calculate the actions that the business needs to take to return to normal operations.

6. Recovery.

After the crisis, you need to come up with certain solutions to deal with the consequences of the crisis along with the business recovery of the business.

7. Crisis Team

A crisis team is a group of people whose role is to deal with crisis issues in a business. They are also the ones who are ready to prepare for the worst situations that can happen to the business.

Tasks that the crisis team performs include:

So what do the corporate crisis teams need to do?

• Warn businesses about signs of a crisis.
• Work with other employees to prepare for and respond to crises.
• Ensure a positive brand/business image before, during and after each crisis.
• Help your business deal with any future crises.

Some corporate positions involved in crisis management include:

1. Crisis Manager:  An employee who acts as the person who establishes and implements actions related to the crisis management plan.

2. Crisis Management Advisor:  The person who directly advises the head of the crisis management department when making important decisions.

3. Emergency Management Director (Head of emergency handling department):  Is the human resource who plays the role of directing the first response unit when the business encounters a crisis.

4. Public Relations Specialist:  As a bridge between businesses and stakeholders, responsible for maintaining a positive image of the business with the public.

5. Human Resources Advisor:  Is a human resource that gives advice to businesses related to human resources in the company.

6. Legal Advisor:  If you need any advice regarding a legal matter, you need to see this staff member.

7.Advisor (Advisor in general):  Not only legal issues, in a crisis you still need advice related to other issues such as technology, health, medical …

>>> See more articles: Crisis Management: What to Learn From 6 Famous Brands

We hope you have a better overview of crisis management and can apply our suggestions above to your business case. Check out more articles at  Malu’s Business Blog