Have you ever thought about all the potential risks that your business is prone to? There are chances that a natural disaster might occur, there are chances of a sudden disruption in finances, a pandemic might as well hit, there are chances of a technological crisis, bankruptcy is a common crisis too, and there are so many other negative possibilities. Looking at these risks is a crucial component of risk management, as is crisis handling.
Hence, when it comes to your business, it is something that must not be deferred by any senior executive possessing a business oriented mind.
You may wonder why a
crisis management strategy is required to be in place and why not to take the brighter aspect of things into consideration, saving time and resources that go into making any strategy. However, in the long run, such a perspective might be detrimental to the health of your business.
Differences in Risk Management & Crisis Handling
While risk management is concerned with all the potential hazards to your business in the future and preventing them or mitigating their adverse impacts, crisis management, and handling is especially concerned with the here and now. Crisis handling is a part of risk management, in essence, and a business oriented mind should not sideline it.
For example, if your organisation is located in a place that is often subject to a natural disaster, you need to have strategies in place for dealing with that particular disaster. You need to take proactive measures in terms of adapting your infrastructure, making your employees aware of the steps to be taken in such circumstances, and taking care of your backup plans in case there are chances of a technological crisis (as happens during a flood and an earthquake).
This all comes under risk management as you happen to be preparing for the potential risks. Crisis handling, on the other hand, would come into play when your business is going through these risks or trying to deal with their aftereffects in the present time. Business crisis management is hence a skill that entrepreneurs or the senior executives of any organisation should harness.
The Way to Crisis Management
Handling a crisis does not come easy if there is no prior planning or strategies in place to deal with a particular kind of crisis. Therefore, the right way to crisis handling starts well before a crisis, and the right application of those strategies is what constitutes business crisis management.
Any crisis typically affects the reputation of an organisation or the presence of team spirit in workers, and it may also be that the hiring of a senior executive by a competitor results in financial complications or a data breach. You thus need to work on creating a crisis management strategy and be prepared to apply that when the situation demands. This also incorporates crisis resource management in its scope, which deals with effective leadership and followership.
Crisis Management Strategy
- When your business undergoes a crisis, create a specific team that gathers the facts and gets to the root cause
- Create an effective communication process to dispel rumours, and be positive in resolving the crisis as soon as possible
- Keep steering your entire team in the forward direction while a crisis is being managed so that not everything feels like a crisis
This is all to say that crisis handling is an important part of any business, and it comes under the purview of risk management. As much as managing a crisis is essential, preventive measures have to be in place so that the chances of a sudden crisis are reduced, leaving everything in disarray.
