Crisis management can refer to the formal and systematic policies and procedures put in place to respond to specific crisis situations in a business, or more generally to the ways in which managers and entrepreneurs respond to crisis situations. In either case, effective crisis management is crucial for managers, who must respond quickly by developing and implementing response strategies, delegating and supervising a range of individual tasks and managing the effects of the crisis.
Small businesses can face a wide range of crisis situations in which the very survival of the business can be at stake. An unexpected and serious illness in the management team can instantly leave vital tasks undone, for example. A lost or damaged shipment can devastate cash flow and destroy relationships with customers. A natural disaster can wipe out office buildings or sales outlets in minutes. Whatever the case, responding in a calm, rational and strategic manner is essential to steering a business clear of danger.
Identify Challenges and Solutions
Any effective crisis management program must first accurately identify the challenges the crisis presents and the potential ways to overcome them. Focus on causes rather than symptoms when identifying problems. If time allows, seek input from a range of stakeholders to come up with several potential solutions to the problems you have identified. Compare each potential solution in terms of its cost, time requirements and its likelihood of success, then select one or more to put in place.
Put your chosen solutions into action. In this stage, managers gather the crisis management team together, delegate tasks as needed and determine the way forward. If your solution to a fire destroying an office building is to get everyone set up to work at home, for example, the second stage might involve working directly with each employee to get them remotely logged in to company servers and communicating with their teams. If your solution to the unexpected passing of an executive is to hire a temporary replacement, the second stage might involve contacting board members and asking them to recommend suitable candidates.
Crisis response does not end after implementing solutions to threatening challenges. After a crisis situation has been dealt with, review the entire experience and evaluate your response. Identify exactly what led to the crisis, focusing especially on elements that were in your control. Evaluate the effectiveness of your response strategy and implementation. If your solutions were unplanned, consider tweaking and formalizing them for quick reference in future situations. Take this time to recognize any star performers who pulled extra weight in responding to the crisis and do something to let everyone involved know that you appreciate their efforts.
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