The Business Crisis Shortlist: How to Plan for a Crisis

Every business will face some type of crisis during its lifetime, and these unexpected emergences can come in all shapes and sizes:

• Lawsuits
• Social media crises/mistakes
• General PR mishaps
• Insufficient supply for demand
• Core business underperformance
• Quality assurance problems

Additionally, growth-mode companies may need to address more than one business crisis at a time. PwC found in its 2019 Global Crisis Survey, which surveyed 2,084 senior executives in  25 industries across 43 countries, that a business crisis is not always a negative event in the long run, and can actually serve as a competitive advantage. In fact, 42% of surveyed business leaders who had faced a major crisis said their teams actually found themselves in a better position “post-crisis.”

Fortunately, it’s possible to understand why these crises occur, and prepare for and even avoid them. 

Prepare and Plan for a Crisis

While no business can prepare for every calamity that might occur, it is possible to put a response strategy together ahead of a crisis so that certain tactics are ready to implement.

Independent PR consultant Brian Sibley has handled numerous crises for large corporations over the last 20 years. Across the board, Sibley recommends starting with a carefully crafted response strategy.

“Develop a plan for employee communications and monitoring social media activity until the incident has cooled off,” he says. "Coach team members on how they can help. That may mean they need training on how to respond, what the company message is, etc. This includes making decisions about who the 'authorized' spokespeople are."

Jane Thompson, who runs the Thompson and Conard PR agency and who handles business crises on a regular basis, agrees and says that building a “crisis comms team'' is vital. "This should include legal, HR, and your executive leadership team,” she says. "Of course, not all companies have this, or even experienced advisors from those fields. But in general, you should retain such people on an as-needed basis to quickly respond to crisis situations. Ultimately, I recommend making sure you have a PR firm handy, as well as a lawyer."

Use the ‘Three Cs’ of Crisis Response

Sibley recommends using what he calls the ‘three Cs’ of crisis response when PR emergencies occur. “Demonstrate care, concern and commitment. People need to know that you care about what happened, that you share their concern over taking the appropriate action, and that you are committed to doing what's right.”

He says it’s not enough to just say the right things. You actually have to do the right things, too.

“A lot of people think about crisis PR as if it's just about crafting the right message. But it's much more than that. Your business has to actually take appropriate corrective action in order to repair a damaged reputation. That shows your care, concern and commitment. People, especially today when so many are always online, are skeptical of companies and executives who say one thing and do another. So consistency is vitally important.” 

“Thoughtful communication and swift action to remedy these situations can be the difference between gaining customers’ trust or losing some of your longest, most faithful customers,” says Meredith Schmidt, Executive VP and GM of Essentials and SMB at Salesforce. “Creating a consistent and personalized approach to customer communication is going to serve you well when one of these emergencies happen. Your customers will already know your authentic voice and believe your actions are coming from a genuine place.”

Create Templates for Various Scenarios

Once the actual crisis presents itself, adequate preparation could mean that you only need to craft real-time messaging. That’ll speed up your response to negative events. 

"Have templates for various crisis possibilities such as a natural disaster, plant closure or some other product issue. Draft generic messaging that can be ‘tweaked’ to fit the situation,” says Thompson. “Create a cascade ‘tree’ for managers to roll out info and don’t rely on just one source, i.e. email. Include SMS and phone calls. Possibly retain an outside agency to help with messages and to create a media statement if needed. Larger companies tend to have this with a specialized agency, but SMBs should ensure an existing agency can help. Have a monitoring service for any external coverage, then a customer hotline, employee hotline, and an investor hotline with robust Q&A capability.

Focus on Customer Safety and Happiness

With the pandemic currently top of mind for everyone, it’s crucial to remember your first priority should be the safety of both your customers and your employees. Schmidt says customers must understand what your business is doing to keep them safe so that you can maintain their confidence and head off crises in uncertain times. 

“While no one had time to prepare for this pandemic, it’s worth having a plan for future localized shutdowns or a similar event happening again,” Schmidt says. “Our most recent SMB Trends Report found that 45% of growing SMBs—those with more than a 1% increase in revenue over the past six months—have adopted technology to help digitize their customer interactions and offer contactless services, all in preparation for future crises.”

To build long-term trust, it’s also important to be more proactive and transparent with information, such as the safety protocols your business is putting in place. The more thoroughly you disseminate information to your organization about what might happen, the better you can prepare to minimize the impact of a crisis or even avoid it altogether. 

Be Fearless in Your Preparation

Sibley says don’t be afraid to imagine the worst. “Each business owner has to take a fearless and searching inventory of the potential issues that could affect their business. Leave no stone unturned. [...] Dig deep, imagine difficult scenarios and make contingency plans for all of them. […] Dig deep, imagine intimidating scenarios, and make contingency plans for all of them. It's exhausting and painful but if your business is worth protecting, it's worth planning for these situations."

Know Your Audience

When it comes to a crisis, the opinion of some will matter more than others. Every business has a variety of stakeholder groups with their own unique needs and priorities. Be aware of who will be most impacted by the crisis.

Prepare specific plans of action and customized communications for those in the audience who will be most impacted by the situation. While there will be some similarities, other messaging will specifically address the needs of employees, customers, investors, other affected businesses or the general media.

 Thoughtful communication and swift action to remedy these situations can be the difference between gaining customers’ trust or losing some of your longest, most faithful customers.

—Meredith Schmidt, Executive VP and GM of Essentials and SMB, Salesforce

Sibley says keep in mind that some employees may feel tempted to leap into a social media discussion to try and defend their company.

"Anyone who's dealt with an online troll or bully knows that sometimes nothing you say will diffuse the situation," Sibley says. "While the employee may be motivated by good intentions, if that person is unknowingly dealing with a troll or an online bully, any engagement at all (no matter how well-intentioned) only serves to prolong the crisis. So part of the planning process involves discussions about when to engage, and when not to engage, so that the online tensions have a chance to diffuse more quickly, and normalcy can return."   

Create an Emergency Fund

An essential part of the crisis preparation process involves making financial plans to handle any disruption or damage. Schmidt recommends creating an emergency fund for this purpose. 

"The fund should be at least 2-3 months of operating expenses, plus an amount on top of that for unseen items like repairing a water heater ($5-10K)," she says. "The fund can cover so many different issues, including ensuring personal finances do not take a hit or that debt starts piling up. From repairs to the workplace to PPE supplies to legal fees, planning for the worst-case scenario can also keep small emergencies from becoming a financial crisis.”

If 2020 taught us anything, it’s that preparing for potential crises needs to happen now. Be thorough in your research, understanding, and planning of each potential risk. When planning your course of action and messaging, remember to be caring, considerate, responsive, transparent and consistent in all that you say and do. 

Photo: Getty Images