Crisis Management: Preparing For The Unexpected
By Davinder Johal & Alicia Dean - June 11, 2020
If you are interested in learning more about organizational response specific to COVID-19, there are several additional articles on our blog with insights about helping employees navigate this unprecedented situation.
The current COVID-19 pandemic serves as a reminder that a crisis can occur at any time. Many organizations were unprepared because few could imagine a crisis on this scale, impacting the entire world and all aspects of business operation. Organizations of all types and sizes have faced issues as a result of the pandemic such as:
- Newly implemented work-from-home policies
- Health and safety of employees on the front line
- Team rotations in plants
- Securing an uninterrupted supply of essential goods
- Re-deploying resources to help fight COVID-19
- Financial stress
- Making plans to return to some sort of normalcy
Though the impact of this pandemic is nearly unprecedented in scale, business crises have always been a fact of life. The following are just a few more recent examples:
- Thomas Cook, British-based travel agency collapse left 600,000 people stranded across the world (2019)
- eBay, cyber-attack exposing entire account list (2014)
- BP Deepwater Horizon disaster, Gulf of Mexico (2010)
- PepsiCo, claims of syringes found in cans of diet Pepsi (1993)
The one thing all crises have in common is that they are unanticipated. Because a crisis can affect your organization at any time, it’s important to have a crisis management plan in place. (Tweet this!) HR’s role in crisis scenarios is critical to protect the welfare of employees, while ensuring that employees continue to contribute to the organization’s sustainability by doing their part in times of crisis. In this article, we’ll examine the importance of crisis management and crisis management plan objectives, strategies, and procedures.
What is crisis management?
Crisis management is the process by which an organization deals with a disruptive, unpredictable, and unexpected event that threatens to harm the organization and/or all of its stakeholders—employees, customers, suppliers, and the general public—as well as the company’s value.
Crisis management can be divided into three phases:
- Pre-Crisis: prevention and preparation for a potential crisis
- Crisis Response: responding to the crisis
- Post Crisis: fulfilling all commitments that were made during the crisis and looking for better ways to prepare and respond to the next possible crisis.
While crises are of their very nature unpredictable, many can be avoided through prevention, and many others can be mitigated through preparation. This requires assessment of known risks and strategies to prevent and mitigate potential crises associated with those risks through crisis management planning.
Surveying in moments that matter, such as a crisis, is an integral part of a continuous listening strategy. Develop the right listening program for your organization with our free guide, Continuous Listening: Developing The Right Strategy For Your Organization.
Importance Of Crisis Management Planning To Long-Term Business Success
Because a crisis can strike at any time, organizations should have plans in place to address crises. Around 62% of organizations have some sort of crisis management plan, but few update them regularly. These plans should be completed prior to potential crises and regularly updated, and should clearly establish the processes the organization should follow when dealing with a crisis.
Crises can highlight the organization’s vulnerabilities. However, the more plans an organization has to manage a crisis, the less vulnerable it is. When organizations believe they are invulnerable and do not prepare, they are likely to be affected more severely, potentially even impacting their long-term success. A plan designed to effectively and efficiently manage the effects of a crisis can mitigate or prevent losses in the crisis situation, such as the organization’s profitability, reputation, and ability to operate.
Whether the crisis is a natural disaster, a highly-publicized lawsuit, or a damaging product review, the organization should be ready to take focused and emphatic action immediately. Because employees are the heart of the organization, HR should place utmost importance on people when developing crisis management plans; without employees, the organization cannot function. HR must ensure that employees are well-versed in crisis management procedures, to build resiliency against future crises.
Creating A Crisis Management Plan
The steps for developing effective crisis management procedures are as follows:
- Identify and assess the different types of crises that could disrupt the organization—financial, personnel, organizational, technology, and natural disasters.
- Determine the business impact for each type of crisis, such as lost or delayed sales, customer dissatisfaction and attrition, or increased expenses or regulatory fines.
- Identify the actions that would be required to respond effectively to the crisis. Think about steps that would need to be taken, the resources that would be required, and how employees can help. For example, creating a library of resources for remote working would have been useful to many organizations in the current COVID-19 crisis. Also consider employee health and well-being support, such as employee assistance programs (EAPs).
- Once an effective contingency for each potential crisis has been determined, build out the plan with relevant stakeholders.
- HR leaders must ensure that the crisis plan takes into account the health, safety, and welfare of employees. By collaborating with the organization’s leaders, HR can guarantee that employees’ welfare is considered within all crisis management plans.
Once the broad outlines of a crisis management response to each of the various scenarios is mapped out, the following strategies can be used to flesh out plans to cover all the bases.
Strategies For Creating Effective Crisis Management Plans
Using Surveys As Strategic Tools During Crisis Management
HR leaders play an active role in keeping organizations and employees well-connected. They must have a method in place to acquire information about both the status of the organization and its employees. As is true during all other periods of change, during times of crisis it is important to quickly gather and respond to feedback from employees. Through employee surveys, HR can provide valuable data to leaders to inform decision making during a crisis, enabling greater organizational agility and responsiveness.
Employee surveys should feature tailored questions directed towards issues where HR and senior leaders most need information. In a crisis, surveys can reveal what employees need, and enable employees at all levels of the organization to be heard. This then allows leaders to track, monitor, and take action as needed. The most effective leaders make strategic decisions while remaining prepared to quickly course correct , re-prioritize, and remove roadblocks as necessary. Employee responses are likely to change as a crisis develops, so it’s important to continually survey throughout and post crisis.
Employees determine how fast and how well an organization recovers from a crisis, so they should be placed at the forefront. While there is no one correct way to listen to employees, surveys provide the opportunity to learn about employees’ concerns and demonstrate that leadership cares about their well-being. As organizational priorities rapidly change during a crisis, it’s more important than ever to effectively listen, support, and engage employees through every step of the journey.
Crisis Management Vs. Business Continuity
Business continuity describes the organization’s ability to maintain essential functions during and after a crisis has occurred. Planning for business continuity is key to allowing the organization to return to normal operations quickly in the post-crisis phase.
The crisis management plan is a component of the overall business continuity plan. A well-designed crisis management plan for business continuity can make handling a crisis easier and reduce disruption—but plans should be tested.
Organizations that have crisis management plans can recover from a crisis much more quickly than those that do not. The benefit to the organization in financial terms is that they are able to handle disruption caused by crises and get back to business quickly. Having a crisis management plan also demonstrates to clients (and investors) that the organization is reliable and robust. An organization that has a clear plan for recovery with identified appropriate actions compares favorably with competitors who have not prepared for potential crises.
Recovery action plans are key for successful business continuity. Employees need to know their roles, responsibilities, and the actions they should take in the event of a serious interruption of operations. Continued employee engagement is also crucial to business continuity. Employees are the main contributors in the recovery process, and their welfare is critical in ensuring effective recovery. Engaged employees will want their organization to succeed and prosper. Successfully weathering a crisis can allow the organization to become more efficient, flexible, and responsive, making it stronger post-crisis. (Tweet this!)
Once the crisis has passed it may no longer be the primary focus, but that doesn’t mean crisis management work is complete. It is crucial to review the crisis management plan and determine how well it worked. Crises should be viewed as learning opportunities, highlighting areas that were ‘vulnerable’ during the crisis. Learning from previous experiences can help to minimize the effects of similar future crises, enrich knowledge, and inform new practices. HR’s role in recovery is prominent in helping both the organization and employees to regain their composure. Surveying after the crisis will reveal what employees need to get their lives—and the organization’s productivity—back on track.
See The Way Forward
The Perceptyx platform can help you keep your finger on the pulse of your employees’ perceptions, so you can see what really matters. By identifying meaningful actions to drive sustainable improvements in your organization—during recovery from the COVID-19 pandemic and beyond—you can build a more flexible, resilient organization. Get in touch to see how we can help your organization build a people analytics solution tailored to your strategic goals.