Crisis Management

Crisis management is a comprehensive subject that encompasses all aspects of business, including operations, marketing and media relations, distribution and legal matters. As such, extensive interpersonal communication is needed among the affected groups. Over the past 18 months, it has been said many times that crisis management planning is more urgent now than ever. This is not true; it should have been urgent earlier. The risks have been known for some time-the difference is that public perception has been heightened. What constitutes a crisis? Any incident that can focus negative attention on a company and have an adverse effect on its overall financial condition, its relationships with its audiences or its reputation in the marketplace. Crisis management involves planning, organizing, leading, and controlling assets and activities in the critical period immediately before, during and after an actual or impending catastrophe to reduce the loss of resources essential to the organization's eventual full recovery. The goal of a crisis management plan is for the company to survive the crisis with its reputation and assets intact. This may seem a rather simple and obvious goal. However, experience shows that many organizations do not address the planning process adequately enough to prepare for response. The importance of proper planning is demonstrated after a crisis has occurred. Many organizations fail following a significant crisis due to poor planning; others survive because of their plans and their response. A company must constantly identify risks, assess the risks, plan and prepare for a crisis, mobilize and respond to the crisis immediately, and test the planning. A point person should have the responsibility of being the spokesperson and only one. Given the importance of the subject and the need to involve personnel from all levels of an organization, the responsible individual must have the appropriate authority to ensure success. Crisis management planning is a complex subject that requires a multidisciplinary approach. Many resources are available to help organizations develop these plans. If done correctly, developing a plan is a time-consuming process that thoroughly evaluates and quantifies risks and provides a framework for response. Each plan will be unique to the business entity that develops it. Business decisions must be made with respect to risks to be retained and risks to be insured. Control measures can be implemented, but risk cannot be eliminated. Proper planning and effective response can significantly minimize the impact of a crisis on any business.