Crisis

Getting Started Guide to

Crisis Management
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In the eye of the storm disaster doesn’t have to mean crisis

In 2013, a blogger, Brian Krebs, broke one of the As Steinhafel would learn, corporate crisis isn’t just about
technology scoops of the decade. Writing in his security the disastrous event. It’s also about the crisis response
blog, Krebs revealed that Target’s IT systems had been in the media. And with the eyes of the media on it it,
hacked, potentially exposing the personal and financial Target looked at times unprepared, unprofessional, and
data of millions of customers. Target was instantly unreliable. For instance, Target eventually had to walk back
ensnared in a full-bore corporate crisis at the peak of the initial statements about the number of customers whose
holiday season, usually a goldmine for retailers. information had been hacked. At the height of the crisis,
Target also published a CEO statement. No harm there.
By crisis end, 40 million consumers would have their debit But it posted the statement to its corporate website,
and credit card information stolen. Target would have to whereas the bulk of consumer response was taking
spend over $60 million dollars. Its fourth-quarter profits place on social media. Target ultimately had to reissue
would plummet by 46 percent, torpedoing total 2013 the statement.
earnings. And its CEO, Gregg Steinhafel, would be out
of a job.

Crisis can happen to anyone

Between 40 to 60%
Target isn’t the only company to commit crisis
communications malpractice. Today, the diversification of
media sources, including the advent of social media, means
that news of a corporate crisis can go viral faster than ever of small businesses
– just ask British Petroleum, United Airlines, Pepsi, and
countless others. in the U.S.
CLOSED
Yet, corporate crisis doesn’t only happen to global
brands. Crisis can hit any company, at any moment. In
close following a
fact, corporate crisis is more likely to pose an existential natural disaster.
threat to small businesses. According to the U.S. Federal
Emergency Management Agency (FEMA), anywhere
between 40 to 60 percent of small businesses in the U.S.

A 2014 study
close following a natural disaster, an increasingly more
common kind of corporate crisisi.

revealed that 32%

What’s more, small business owners do little in the way
of thinking about the environment as a critical factor
affecting business preparedness for crisis. However, small
businesses are not alone in being unprepared for crisis. It
of companies had no crisis
seems most organizations, irrespective of size, do a poor
job of crisis management planning. A 2014 study revealed
management plan in place.
that 32 percent of companies had no crisis management
plan in placeii. Meanwhile, fewer than half of all board

Fewer than 1/2 of all

members (47 percent) believed that their organizations
had the capabilities or processes necessary to meet a crisis

board members (47%)

with the best possible outcomeiii.

believed that their

organizations had the
capabilities or processes
necessary to meet a crisis with
the best possible outcome.

Getting Started Guide to Crisis Management

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Understanding crisis at a deeper level

Even though crisis is a fact of corporate life, organizations Economic: events or situations like strikes,
tend to assume they are immune and fail to plan market crashes, and labor shortages.
adequately. That is despite the clear risks associated with
crisis, i.e. harm to stakeholders, losses for an organization, Informational: loss of important information
or even extinction. Why do businesses take the risk? or organizational records, including public and/
or confidential records, theft through phishing
One explanation might be that organizations conflate crisis attacks, social engineering, or the leaking of
with critical events, consistent slow-burn issues that affect sensitive data.
an organization, and which could turn into a crisis if not
properly handled. Another culprit: companies are prone Physical: compromised major equipment, loss
to view crisis solely in its most dramatic forms, like the of suppliers, or a major disruption at a key
category-five hurricane, the once-in-a-century flood, or operating plant.
the unprecedented data hack that dominates the Human resources: the loss of a key executive or
news cycle. team member, vandalism, or workplace violence.
Episodic and of more significant magnitude, crisis is Reputational: rumors and gossip that
neither (merely) a critical event, nor so abnormal as to can significantly hurt the reputation of
be considered impossible. In its simplest form, crisis is an the organization.
unanticipated event or issue that disrupts the day-to-day
operations of an organization. Crises have the potential to Psychopathic: unthinkable acts such as
create significant financial, safety, security, or reputational terrorism, kidnapping, or even tampering
harm, depending on the nature and severity of the event. with products.
Decision-makers who believe crisis can’t happen to Natural disasters: including tornadoes,
their organization fail to understand the sheer variety of earthquakes, fire and flash foods, disease
potential crises, which include the following: outbreaks, etc.

To be considered fully prepared, companies must have a

plan in place for each of those potential crises.

The stages of crisis management

The task of preparing for, managing, and recovering from crisis falls under the banner of crisis management, the processes
designed to prevent or minimize the damage crisis can inflict on an organizationiv. Moreover, organizations can go a long
way towards mitigating the damage associated with crisis by treating crisis management as a critical business functionv.
Like crisis, crisis management is complex, comprised of three important phases:

Pre-crisis
1 Prevention and preparation, i.e. reducing the
known risks that can lead to crisis.
Stages of crisis management

Crisis Response
Pre-crisis 2 When management must actually respond to
a crisis.

Post-crisis
3 The post-mortem phase when companies look
Crisis response for ways to better improve preparations for the
next crisis as well as fulfil commitments made
during crisis responsevi.

The tri-partite framework of crisis management makes it

easy to both visualize how crisis management breaks down
Post-crisis by (discrete) stages and understand how to prepare for
each stage individually.

Getting Started Guide to Crisis Management

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That being said, when building or enhancing crisis

management competencies, organizations should take
Effective practices for
intelligence gathering and constant monitoring as crisis management planning
their default mode, which means approaching crisis
management as “life cycle”vii. This cyclical mode of crisis The crisis management lifecycle is an important
management tends to be more strategy-oriented than the framework for understanding and preparing for crisis. But
tactics-first approach implicit in the tri-partite framework organizations will need a proactive crisis management
highlighted above. Here is an example of a crisis plan to address all points in the lifecycle. Effective crisis
management lifecycle framework: management planning should involve all of the following
best practices:
The build-up stage, or the Prodromal Crisis,
when you might see hints or clues of a potential Pre-crisis: creating your crisis management plan
crisis appearing in media outlets. At this stage, • Identify a crisis management team to create
you should be looking for the repetition of and enact a crisis management plan, as well
certain trigger themes, repeated messages as to deal with the problems not covered by
describing symptoms or precursors to a crisis. it, when a crisis does arise.
The impact stage, or the Acute Crisis, when • Create the crisis management plan to help
one of the triggers has developed into a fullbore reduce chaos when crisis strikes. Your plan
crisis. Often the shortest stage in the crisis should include information regarding potential
lifecycle, the impact stage tends to result in the crises, policies for prevention, as well as
most physical, fiscal, emotional, and reputational strategies and tactics on how to deal with
damage to a company. Companies can usually each crisis. Address who will be empowered
expect the most media scrutiny during this phase to enact the crisis management plan, who will
of the lifecycle. be affected by the crisis, how to communicate
crisis developments, and how to set up a
The Chronic Crisis stage, the company suffers
crisis control center.
through any lingering effects of acute crisis,
which can be physical restoration, legal action, or • Hold practice simulations and exercises
public activism. Media coverage, at this juncture, to train staff and expose weaknesses in
tends to focus on blame and responsibility. your plan.

The Resolution stage, the crisis no longer impairs • As part of your crisis management plan,
the organization’s operations or directly impacts identify technology solutions to help you
the public. The risk at this stage is that the crisis better manage the entire crisis management
remains latent, with the potential to strike again lifecycle, keep internal stakeholders
to even more devastating effectsviii. informed and on message, and monitor
media response.
• Create your crisis communication plan, which
should include a system to reach the relevant
stakeholders, identified crisis communication
team members, roles, and responsibilities,
Build-up a list of key media contacts, company
stage background information, and a set of pre-
approved, prefabricated messages for use
during any variety of crises.

Crisis Impact
During the crisis: putting your plan into practice
resolution stage
• Communicate information about the crisis to
the public, media, and employees as quickly,
forthrightly, and often as possible.
• Focus crisis communications on how people
Chronic can protect themselves from the effects of
crisis the crisis, as well as what you are doing to
prevent the crisis from happening again.
• Ensure strong leadership is highly visible
throughout

Getting Started Guide to Crisis Management

 5

Post-crisis: debriefing and evaluating for

next time
Conclusion
If crisis had the regularity of a calendar event, businesses
• Evaluate how your plan performed during the
wouldn’t have to plan for it. However, that’s not the
crisis, correcting errors as you update and
world we live in. Just ask Target. Even if there are
revise your plan.
warning signs, crisis is by nature wildly unpredictable and
• Communicate key lessons learned (during takes many different forms. But although organizations
the crisis) with the public and your internal cannot accurately predict when and how a crisis will
stakeholders. hit, they should plan to manage its effects with detailed
preparation. That is the role of crisis management. A
• Treat the crisis as an opportunity for further crucial business function, crisis management minimizes the
company growth. time, money, and effort it takes to recover from a crisis.
Undertaken successfully, crisis management can even
allow the resilient organization to emerge from disaster
stronger than ever.

Citations
i Federal Emergency Management Agency: Make Your Business Resilient. Available at https://www.fema.gov/media-library/assets/documents/108451.
ii Jared Brox, Refresh Leadership: The Results Are In: 32% of Companies Have No Crisis Management Plan in Place. Available at http://www.
refreshleadership.com/index.php/2014/06/results-32-companiescrisis-management-plans-place/.
iii Deloitte: A Crisis of Confidence. Available at https://www2.deloitte.com/content/dam/Deloitte/us/Documents/risk/us-aers-global-cmsurvey-report.
pdf.
iv Ibid.
v W. Timothy Coombs: Crisis Management and Communications. Available at http://www.facoltaspes.unimi.it/files/_ITA_/COM/Crisis_Management_
and_Communications.pdf.
vi Ibid.
vii Dawn R. Gilpin, Priscilla J. Murphy: Crisis Management in a Complex World. Available at https://books.google.com/books?id=_7rW6w7duDUC&pg=
PA19&lpg=PA19&dq=crisis+management+lifecycle&source=bl&ots=jwJDoU7dfa&sig=BCQOC9MNz632lPo6dCivA9fFQsg&hl=
en&sa=X&ved=0ahUKEwiJ_sPfxZ-7ZAhUB3GMKHdO4CMcQ6AEIbzAO#v=onepage&q=crisis%20management%20lifecycle&f=false.
viii Gwyneth Veronica James Howell, Queensland University of Technology: Description of the Relationship between the Crisis Life Cycle and Mass Media.
Available at https://eprints.qut.edu.au/15827/1/Gwyneth_Howell_Thesis.pdf

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