It is said that every two years, most brands will experience a potential crisis situation that could have an adverse effect on their brands. The COVID-19 crisis that began in early 2020 for example, can be depicted as a compendium of crisis management situations for brands; where businesses around the world were forced to shut down, forcing millions of employees home and leaving essential services struggling to function; ultimately testing the crisis management skills of affected businesses to determine their recovery.
Crisis management is defined as a series of steps an organization performs to deal with a catastrophic event. A crisis disrupts business operations, threatens to harm people, damages one’s reputation, and negatively impacts one’s finances. Basically, anything that could negatively influence a brand’s reputation constitutes a crisis.
Of course, the best way to manage a crisis is to avoid one in the first place; however, mistakes and inescapable calamities happen; therefore, it’s important to anticipate a crisis and take precautionary measures.
HOW CRISIS AFFECTS YOUR BUSINESS
An organization deals with many types of crises outside of its control. Natural disasters can be impossible to prevent, yet other potential crises may be directly caused by your company or employees. An improperly planned message on social media can easily erupt into a crisis. While there is an infinite number of scenarios, businesses are primarily impacted in three ways:
Reputation Damage: As Dilenschneider (2000) noted in The Corporate Communications Bible, all crises threaten to tarnish an organization’s reputation. The news cycle during a PR crisis can damage your brand’s reputation due to constant negative press from the media. Your company’s mistakes, actions and inactions will be criticized and broadcast around the globe, forcing you to take action by removing articles from Google as they spring up. Only a targeted reputation management strategy can effectively push negative search results down.
Business Operations Disruption: Your business continuity plan may require you to pull people from several departments. This was evident during the covid-19 pandemic as many businesses laid off a percentage of their staff in order to survive the situation, but vital business functions like customer service and production could be at risk when teams are short-staffed.
Elevated work stress and a poor reputation may increase employee turnover and hiring costs. Furthermore, operations may be hindered when chief executives and experts leave the company on short notice.
Revenue loss: Constant negative media attention will bury positive content in your search engine results. This can damage your reputation and drive away potential customers. People may also have a difficult time finding your website and social media accounts if they aren’t on page one. Reputational risk combined with reduced website traffic leads to lost revenue.
According to several statistics from a study by Forrester Consulting, 47% of brands believe reducing unfavourable search results can improve brand perception and 54% feel that improving search results can drive revenue growth.
Businesses that put a continuity plan in place in case of unforeseen contingencies can mitigate the effects of a negative event. The process of having a business continuity plan in place in the event of a crisis is known as crisis management.
RESPONDING TO CRISIS SITUATIONS
Crisis communication is what management does and says after the crisis hits, and public relations play a critical role in the crisis response by helping to develop the messages that are sent to various publics. In responding to a crisis, what you say matters as much as how and when you say it, in order not to run the risk of being misunderstood.
Establish a Crisis Team: A crisis management team led by a senior executive or CEO must have been put in place during the preparation/planning stage. This team must constitute highly experienced professionals especially in legal affairs and public relations in order to avoid lawsuits, if looming, and present the crisis communication messages in the most appealing way to the public. Developing a crisis team is the first step in mitigating crisis situations.
Fast and Decisive Action: Crisis management requires that your response in crisis situations is fast and well-planned. Usually, it is best to respond within the hour as any possible delay in responding could aggravate the crisis wherein your action or inaction could be misconstrued and used against your brand. However, as a pro-tip, do not be quick or give in to pressure to respond without a well-informed plan as the result could be catastrophic.
Preparation is Key: ln crisis management, preparation is paramount without which you’ll be lost in an ocean of confusion when crisis strikes. Most firms start by conducting risk analysis on their operations by identifying adverse events that may occur and estimating their likelihood. Once the risk manager identifies the possible risks and impacts, a plan is developed by the crisis management team to contain any emergency if it becomes reality. This plan is what aids you to respond quickly when it happens.
Simplify Communications Strategies: Crisis communication requires arduous planning and your company’s values become evident in what and how you respond to the situation. It is advisable to take responsibility, apologize and show sympathy to the victims of the crisis. It is also important to stay consistent with your message during the crisis and post-crisis period. Any inconsistency in communication messages could be used against your company.
Honesty and Integrity: Denial could be a good tactic in evading crisis situations but with the existence of proof against your brand, it is advisable, to be honest about the situation. Being honest also entails giving accurate information about the crisis situation and how your company intends to amend the situation. People understand that mistakes are bound to happen and might still consider your brand post-crisis, but don’t trade your integrity and credibility just to evade the crisis.
Crisis managers agree that a crisis should be a learning experience. The crisis management effort needs to be evaluated to identify what is working and what needs improvement. This will aid the organization to seek ways to improve prevention, preparation, and/or response to the crisis. So, the question for your brand is: do you have an established crisis management plan?