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A step-by-step guide to creating a crisis management plan

A crisis management plan shows what to do in case of a crisis. Here’s what to include when formulating your crisis management strategy.

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Year: 2020.

A major crisis took the world by surprise. Nobody thought something like this could happen, and that too on a global scale.

The number of deaths was rising every day, while the economies of all the countries were hitting an all-time low. And all of us were embarrassingly unprepared. 

Covid-19 showed us that a crisis could occur in any company at any time, regardless of its size. In fact, 69% of leaders have encountered at least one corporate crisis between 2014 and 2019.

Yet there are many CEOs, entrepreneurs, VPs, and directors who keep their heads buried in the sand. “That’ll never happen to us,” they say, until it finally does and then they wish they were prepared.

Don’t let that be you. Without crisis management planning, your workplace and employees won’t hold up when something unexpected occurs.

No doubt, good leadership requires positivity, but don’t use that as an excuse to ignore making crisis management plans.

In this guide, we’ll show you how to prepare a crisis management strategy for bad times. So you can build more trust and prevent problems before they go extreme.

What is a crisis management plan?

As your business grows, the risks increase as well. There’s always a chance of an event that can impact your workers, your brand, and your finances. For example, you can come under fire for a social media miscommunication, or get hit by a computer virus. 

A crisis management plan is a document you prepare in advance that outlines how your business will handle a crisis. It gives everyone an overview of:

  • The risks involved in running the organization
  • How likely they are to turn into a crisis
  • How they’ll impact the business
  • What actions will be taken in response and who will take them

This way, a crisis management plan can help you prepare for what may happen, and restore normal operations fast if it happens.

Why make a crisis management plan?

If you’re still on the fence about creating a crisis management plan, the proof is in the pudding. As per a Deloitte survey, 84% of large organizations around the world had crisis management plans in 2018. This number was 49% in 2015.

A crisis management plan helps prepare your company for an unforeseen event, handle the event with confidence, minimize its long-term impact, and accelerate recovery after the event. Take the Cleveland Clinic, for example. This US medical center in the UAE was among the first healthcare facilities dealing with COVID-19 patients when the crisis extended beyond China’s boundaries.

Story of Cleveland clinic to understand the importance of crisis management plan.

The clinic quickly came into action. It gathered a crisis management team and increased its capacity for emergencies, while coordinating with other hospitals.

Plus, the facility was also prepared to look after its staff. Healthcare workers got the support they needed through counseling, childcare, healthy food, on-premise sleeping rooms, and more.

Overall, the clinic practiced proactive problem-solving, empowering both the patients and its employees in the process.

When a crisis happens, you may not know what to do and where to begin. Only planning can help you walk through this uncharted territory.

Steps to create a crisis management plan

The process of creating a crisis management plan will vary with the nature and size of your company. But it’s certainly more manageable when broken down into small, attainable steps. Let’s see what these are.

Build a crisis management team

Developing your crisis management team is the first crucial step of your plan. It may be hard to figure out the people you need before assessing the risks first. But you’ll need to start somewhere and choose people to collaborate with initially.

For illustration, a full-fledged crisis management team chart may look like this.

Example of a crisis management team organizational chart.

Image Source: Smartsheet

On a basic level, you’ll need:

A crisis management advisor: Ideally, this will be someone with experience in handling many different types of crises. 

A public relations specialist: External miscommunication is one of the common crisis situations. So you might need someone who can handle media coverage.

A human resources advisor: Every crisis is going to have some impact on your staff. And an HR advisor can also take responsibility for proper internal communication.

Financial and legal advisors: These team members can gauge risks and actions based on how they impact your company’s financial and legal standing.

Safety advisor: Depending on the situation, you might need inputs from security, health, and environmental experts.

Identify the main types of crisis for your company

Crises come in many forms. Determine what types of crisis you should be prepared for in your specific business. These may include:

Financial loss: This may happen when your business sees a sudden decline in demand. In the worst case, you may have to declare bankruptcy or lay off workers; this can be avoided with proper financial planning and analysis.

Technology failure: Technology-oriented problems like a power outage or cyberattack can shut down your services for long periods of time.

Natural or man-made disaster: This category includes events such as earthquakes, biohazards, and hurricanes, apart from fire and other accidents caused by human error.

Operational changes: Unexpected shifts in leadership or operations can have a big impact on both employees and the general public.

Organizational mishap: Your organization may encounter accusations of misconduct, requiring the senior leaders to offer a public apology.

Depending on the crises you choose to prepare for, you may need to come up with several distinct plans for all probable scenarios.

Conduct a risk assessment

Once you’ve determined the possible crisis situations, the next step is to understand what can cause each type of crisis you identified. You want to assess the risks and their possible impact.

Have a sit down with your crisis management team, and conduct a risk analysis to outline the potential causes that can lead to a crisis and sort them by probability and impact on the company.

When estimating potential damage, make sure to consider which employees, customers, or areas of the organization will suffer the most and how. For example, the consequences of a mishap could be customer attrition, damaged brand, lost income, delayed revenue, or regulatory fines. 

Zero in on your crisis communication plan

Communication is the most important aspect of handling a crisis. In fact, most of the training leaders get for crisis management is about crisis communications, according to McKinsey.

A leader explaining a crisis communication plan that will help in delivering information in times of crisis.

Crisis communications correspond to what you say and how you explain the event to stakeholders. Your crisis communication plan will also cover the roles responsible for delivering information and acting on feedback.

This means you’ll need to set up the right communication channels and prepare a thorough contact list that shows who will handle what part of the communication.

The contact list should also include external emergency contacts like the local law enforcement, fire department, first responders, electricians, and any other services you might need based on the risks you identified.

Set activation protocol

For each type of crisis you’re planning for, the activation protocol determines what needs to happen to confirm the crisis.

The activation point tells the crisis management team when the crisis is taking place. So the team can start executing their response.

For example, if you’re planning to be prepared for a financial loss, the trigger could be when your sales reach a certain number.

Determine your response

As we said before, each type of crisis is unique and requires a specific set of steps in response. So consider each risk you identified separately and determine the actions your crisis management team would take to respond to the crisis if it happens. 

When dealing with a natural disaster, for instance, the response will include an evacuation plan for all the workers. Or in case of a data breach, your action steps may include securing the network and providing an update to customers. And while you’re at it, make sure to assign clear roles and responsibilities to each team member. You can use a RACI chart to help with this process.

Example of RACI chart used for defining roles and responsibilities.

Image Source: Tactical Project Manager

It’s a simple matrix that makes it easy for you to come to terms with who is accountable and responsible for each task, along with who needs to be consulted and kept in the loop. This way, you can ensure there is no confusion regarding who is doing what.

Schedule regular test runs

Just because you made plans doesn’t mean everything would be executed flawlessly when a crisis occurs. Each and every employee should know exactly what to expect and what their role is in such a situation.

The best way to ensure that is to conduct training and test drills on a regular basis. Simulate the exact scenario to test the plan and see how people are responding. If the response is not up to the mark, see what needs to change.

Nail your crisis recovery strategy

Now, if a crisis does happen, creating a response plan will help you handle the situation. But once things begin to come under control, you’ll also need a recovery strategy to restore normal operations as fast as possible.

At this stage, you’re basically answering the question, “How will our organization move forward in the next few months or years?” So your post-crisis plan must have two main parts:

  • High-level steps to deal with market shifts and trends
  • Detailed processes to handle specific problems

As your recovery plan comes into action, your workplace will start getting back to normal, workers will resume their activities, and sales will come back on track.

Final thoughts: a step-by-step guide to creating a crisis management plan

Once you’re done creating a crisis management plan, you’ll have a go-to panic button your company can hit when required. 

Remember, a crisis management plan is not a set-and-forget document. It should always be in the back of every employee’s mind. So it’s important that you make it easy to understand and that it’s revisited frequently at your workplace.

Plus, when you’re done dealing with a crisis, make sure to do an assessment of how well the plan worked and what changes need to be made. This will help your company get better and better with each negative situation.

Now that you know the ins and outs of planning crisis management, it’s time to put this guide into practice.

And as we discussed, communication is paramount in times of crisis, and having the right tools can make a big difference. So consider using an employee app like Blink. Request a free demo today.