As a CEO, working with variety of innovative small businesses, start-ups and companies, I understand the wishful thinking and confident mindset of CEO’s thinking they have all it takes to manage any situation. We are professionals after all, we work well under pressure, we adapt and overcome. However, crisis does not discriminate, it does not simply choose the weaker part on the chain. It comes in all forms and sizes, whether is data breach, cyber attack, misconduct, natural disaster, epidemics, technological failure, or just something as brand falling under the fire on media and social networks, that can ripe off all of your reputation and leave your business in ruins. As Dean Travelino said: “Reputation and crisis have the potential today to define an organization, to send its community of advocates spinning, to disrupt financially its stock, its profitability, its leadership hold on the market,” and I cannot agree more.
PwC’s Global Crisis Survey examined 2,084 senior executives in organizations of all sizes, in 25 industries, and across 43 countries — 1,430 of which had experienced at least one crisis in the past 5 years, for a total of 4,515 crises analyzed overall. The survey conducted in 2019, long before COVID-19 pandemics disrupted the world and demonstrated a variety of Western industries( Asian businesses adapted better due to experience with past epidemic) and companies the importance of crisis management, found out that 7 out of 10 (69%) leaders have experienced at least one corporate crisis in the last 5 years.
Figure 1: Types of crisis experienced
There are many stratages that can help you to overcome the crisis. You can check out some interesting examples on https://www.rockdovesolutions.com/blog/3-crisis-management-case-studies-we-can-learn-from
But, as a CEO, your do not solely aim to overcome crisis, right? In ideal, you would aim to sufficiently recover and to experience revenue growth. Well, this can be achieved with sufficient crisis management. What do companies that experience revenue growth post-crisis have in common?
- Fast, transparent, genuine, sincere and emphatic in crisis communication. There is nothing worse for already started reputation then ignoring, hiding, lying or defending your own mistakes and missteps.
2. A certain budget dedicated for maintenance of business and workers
3. Designed crisis team
A further 15% of companies actually go so far as to put the CISO in charge of crisis response for all types of crises by default. While having the CISO and their team involved in crisis response to a cyber event is a model that is often used, putting a CISO in charge of all crisis response is not adequate strategy to manage crisis.
Another frequently used practice is having a team with overlapping roles and responsibilities, without clear leadership. It is vital to plan ahead, to regulary test and update your plan, and to have team with cross-functional representation of your business, well aware of their role and their required actions during and after the crisis.
Having the crisis leader will help to manage and organize the team, and adjust the plan during the course of situation.
- Identification and repairment of broken links in supply chain
2. Planing for the worst. From legal disputes, to regulatory compliance, supply chain..
3. Quick identification of the crisis and adaptation a fact-based,
4. Proactive approach
Three-quarters of those in a better place post-crisis strongly recognize the importance of establishing facts accurately during the crisis. The facts were to inform their response strategy. It is also important to inform and consider communication and management strategy with stakeholders! 🙂
5. Testing and analysis of the plan
Data from UK-based social media safety firm Crisp and PR News found that more than 26 percent of marketers and PR pros have crisis communication plans that haven’t been reviewed for over a year, and 38 percent only conduct a risk assessment of potential threats to their brand’s reputation about once per year https://www.agilitypr.com/pr-news/public-relations/crisis-plan-crisis-nearly-one-in-four-companies-dont-have-an-up-to-date-plan/
PwC’s Global Crisis Survey found out that those, who successfully adapted and experienced reenue growth acted on the results, — one-third(33%) made a few changes, a quarter (24%) defined several projects to be completed, and another quarter (24%) are taking substantial action. Test, learn from your experiences, identify key risks and possibilities and incorporate them in your plan.
Ongoing review, testing and preparation is critical in having an effective response. Survey in 2018 found that companies suggested they were very ”confident in their crisis, management plans when benchmarking against best practices on a regular basis (87% of companies that are “very confident” in their plans benchmark their plans), when conducting drills on key risk areas at least once a year (64%), and when having a formal, documented crisis management team (93%).”
LAST BUT NOT LEAST
Intangible assets are one of the most important assets of the company. Cyber attacks for instance are hard to manage by default, but IP theft from a crisis management point of view it extremely difficult, if not impossible to manage and can cost you your business or reputation. Company should perform global review of their intellectual portfolio, regularly monitor an intellectual property, identify instantly if the theft or infringement has been done. Failure to monitor may lead to waste and compromise certain valuable rights. In the light of COVID-19, businesses that manage their intangible asset will likely be able to get out of the situation less harmed and even stronger. Developing and maintaining intellectual property as a management strategy can gain you a competitive advantage during crisis.
In conclusion, be transparent and proactive. There are only 1000 things that can go wrong in a life span of business. Think ahead and get out situation with your head up high.