The High Cost of Not Having an Actionable Crisis Management Plan
When a crisis occurs, it is paramount that organizations offer affected parties clear guidance on how to mitigate the many related risks. Surprisingly, the Institute for Crisis Management reports that only about half of organizations worldwide have a crisis plan in place. For those that have taken the time to develop a plan, they must be executed swiftly and strategically because the longer it takes to communicate specific directions, the more likely it is that a situation could escalate. Also, the longer it takes to address a crisis, the longer it will take to end it. This could mean more delays, and more lost revenue, before business can resume.
No industry is immune to a crisis. According to The Institute for Crisis Management’s 2015 Annual Crisis Report, the 10 most crisis-prone industries are food, energy, automotive manufacturing, transportation, banking, insurance & financial services, education, government agencies, pharmaceuticals, and healthcare.
No matter the industry, a slow reaction to a crisis, due to not having a plan or not implementing the plan quickly, can increase the cost of replacing, repairing, or rebuilding what has been damaged. A lagging response can create hard costs, in the form of unnecessary material damages, and soft costs, like damaged relationships, lost business, and even lawsuits. Collectively, these expenses could add a lot to the financial impact of a crisis.
This includes reputation damage – one of the most valuable and fragile assets owned by any organization. To prevent or repair their reputation, organizations need to show that they not only responded to the crisis, but responded quickly. While some crises will not attract public attention, stakeholders (customers, suppliers, and employees) will want to know how the crisis is being managed and also that it is handled quickly and effectively.
All of these risks can be prevented or decreased by having a sound crisis management plan that is actionable, up-to-date and easy to access. Here are a few things to consider.
Response Needs to Be in Real-Time
Crisis plans need to work in practice, not just in theory. Take another look at the plan and ask some new questions. For example: How long will it take for managers and employees to find their crisis instructions? How quickly will crisis communications be up and running? If possible, run some simulations or tests to get a more accurate assessment of response times.
Eliminate Unnecessary Steps
Try to identify and eliminate unnecessary steps that will slow down crisis response. Also, make plans available to constituents in a variety of formats. Finding written materials or looking for something on a computer could cost an individual precious time. Consider a solution that utilizes mobile devices. When crisis strikes, everyone needs to start moving as soon as possible, and with a mobile-based solution they can have access to information and instructions wherever they go.
Adjust the Response Timeline
Recovery begins when the crisis starts, not when it’s over and reputation protection must start immediately. A good crisis plan should ensure that internal communications are the top priority, but be careful not to neglect external communications. Here again, a mobile solution can make a big difference – for example, allowing your crisis team to quickly update the company website with important customer-facing information.
For many organizations, a false sense of security has developed when it comes to crisis management. Although creating a plan and keeping it up to date are important steps, they are just steps, not the whole journey. No matter how good the plan might be, it is not good enough unless it can be put into action quickly. Making crisis plans actionable is a best practice that can save money and keep all of your constituents safe.