Crisis Management Plan: What Is It and Why Is It Important?

A crisis can happen at any time!

Emergencies and crises are an unavoidable part of everyday life. While you can’t control the occurrence of crises, you can stay on top of the impact. You can implement several strategies to mitigate the impact of a crisis on your business and its operations. One strategy is using a crisis management plan (CMP).

In this article, I’ll talk about CMPs in detail, why you need one, and how you can make one yourself! Let’s start with a brief overview of what a crisis management plan is.

What Is a Crisis Management Plan?

A crisis management plan, as the name suggests, is a plan that helps reduce the impact of a crisis on your business. It includes a detailed set of steps that prepare your organization to handle a crisis. You can use it to effectively communicate about the crisis to stakeholders such as employees, investors, and more. CMPs are often used by emergency response, damage assessment, and business continuity teams, depending on your organization’s structure. 

Now, you may wonder if this plan is even necessary in the first place. After all, why should you bother about something that has a low probability of happening? Well, the reality is, if that low chance occurs, the crisis could be catastrophic for your organization

Many companies have even gone out of business because they didn’t have a CMP in place to cope with emergencies. According to the Federal Emergency Management Agency (FEMA), 40% of businesses don’t reopen after a natural disaster. Another 25% fail within the first year. A CMP can help to avert business closure. If that doesn’t convince you, here are more reasons to have a CMP in place.

Why Is a Crisis Management Plan Necessary?

Often, a crisis is an unexpected event that requires you to make instant decisions. These decisions have to be relevant and accurate to reduce the impact of a crisis on your organization. It’s impossible to make decisions without a plan or any relevant data, and this is where a CMP comes in handy. Consider the tips below to ensure your crisis management plan is as helpful as possible. 

Predict Crises 

While it’s impossible to accurately predict a crisis, you can watch out for signs, and prepare for it. For example, if a natural disaster, such as a hurricane, is going to hit your area, the weather forecasters will inform you in advance, so you can prepare for it. Preparing for these crises in advance can reduce the costs of long-term damage to your business.

Assign Responsibilities

A CMP defines a crisis for your organization so that every incident is not treated as a crisis. This is important because it allows you to plan your resources and take action immediately. Furthermore, a CMP assigns responsibilities to individuals and teams. These responsibilities tell them what to do when a predicted/unexpected crisis occurs within the organization. In short, a CMP tells everyone what a crisis is for your organization, and what every individual must do in these situations.

Handle Public Relations

Public relations and communication are key aspects of handling a crisis. No one likes change, and even the smallest indication of a crisis can easily make people panic. To avoid these reactions, you have to communicate effectively, and this is where a CMP and the guidelines mentioned in it will help.

Image of a computer and mobile phone sending out letters across a world map background.
Communication is key in a crisis!

The COVID-19 pandemic is a good example. Companies that had a CMP, and an effective communication strategy based on it, survived the initial after-shocks better than the clueless companies that made temporary policies to address the pandemic. 

Maintain Safety

Employee safety is every organization’s priority, and a CMP helps to achieve that. For example, it’ll have the steps you must take to evacuate a building in the case of a bomb threat. In these situations, every second counts, and decisions can take time. With a CMP, simply follow the steps in it and your employees will be safe. 

Mitigate Reputation Damage

Handling a crisis poorly could have a negative impact on an organization’s reputation. A communication strategy, which tends to be a part of the CMP, can mitigate this damage to your organization.

Comply with Regulations

Many local laws, such as those in the EU and India, mandate a CMP as a part of disaster planning and recovery. You may end up paying hefty fines if you don’t have one.

Ensure Business Continuity

Many businesses are hugely affected by emergencies such as natural disasters, bombs, shootings, and even cyberattacks. Sometimes, companies are unable to handle this crisis and close shop. A CMP provides an opportunity for your business to continue its operations, even if it takes some extra time to overcome any losses. 

In the end, these are some of the benefits that come with a CMP. Undoubtedly, it’s highly beneficial and must be an integral part of any disaster and recovery plan. Now that you know its benefits, let’s see how you can implement a CMP within your organization.

How to Create a Crisis Management Plan

Crisis management involves a wide range of activities such as preparation, process development, team building, and more. Here is the comprehensive step-by-step process for creating your own CMP.

Step 1: Do a Complete Risk Analysis

As a first step, identify the possible risks that your organization can face. For example, if you’re located in a hurricane or flood-prone area, you must consider this in your risk analysis. Likewise, if you have operations in a politically unstable country, riots could be a potential risk. So, based on your location, and the prevailing geographical and political climate, list down the possible emergencies that can affect your company.

Step 2: Create a Crisis Management Team

Next, create a crisis management team. In general, include people who tend to be calm individuals, and who can make clear decisions quickly. Look for detail and process-oriented people to also be in this team. You can even make it a cross-cultural team as well so your organization is well-represented. As a part of this step, consider establishing a clear chain of command within the team.

Step 3: Choose a Crisis Communication Platform/Method

Since the team is in place, it’s now time to decide the appropriate platform for internal and external communication. Survey your employees to know their preferred communication platform. Some popular choices include emails, text messages, Slack, WhatsApp, or even phone calls. Accordingly, make a list of all the channels that you can use during an emergency.

Step 4: Establish Crisis Triggers

This is a critical step when creating your CMP. Clearly lay down the triggers that should kickstart the CMP. Use different levels of urgency and the circumstances that trigger them to determine the appropriate course of action. Note down everything clearly, so you have no ambiguity whatsoever.

Step 5: Create Your Crisis Management Action Plans 

This is the most important part of your CMP creation process. Take each scenario laid down on your list in step 1. Then, make a detailed plan around how you should respond to each. Start with the possible steps and assign the responsibility of each task to an individual within the crisis management team. It’s a good idea to treat each response as a separate action, so that every individual performs it independently, but only after the previous step is complete. 

While writing down the plan, envision the situation, and brainstorm all the possible things that can go wrong. Make sure you’ve addressed each of these shortcomings. Remember, this is an iterative process. It can only become perfect after many discussions.

Step 6: Plan for Contingencies

Have a backup for each step in your CMP, as you never know what can go wrong, despite the best-laid plans. So, account for contingencies and plan their response with a backup plan for each step. 

Step 7: Train Your Employees

Once you have the plan in place, train your employees. Conduct regular drills to familiarize your employees with the possible steps during an evacuation. Likewise, train the members of the crisis management team to communicate effectively and complete their assigned tasks during a crisis.

Step 8: Revise and Update Your Plan Regularly

A CMP isn’t set in stone; you must adapt it to meet your changing needs. Regularly revise and update your plan as needed to make it highly effective during any crisis. Ensure you’re capable of handling any new threats. Finally, ensure you’re also following the latest standards and best practices.

Thus, these are the steps that go into creating an effective CMP which will help protect your business and its employees during a disaster. No specific rules go into making one, as it mostly depends on factors such as your organizational structure, workplace culture, and more. Following these steps can guide you to creating that perfect plan.

Before we end, here’s a quick recap!

Final Words

To recap, a crisis can occur at any time and without notice. That’s what makes it highly detrimental for any organization. The good news is that you can prepare yourself for such an emergency with a crisis management plan (CMP). This plan comes with many benefits and is a must-have for organizations of all sizes. I’ve explained in detail the steps that go into creating a CMP, and I hope you find it useful in preparing your organization for handling emergencies. Consider referring back to it in the future when needed.

Do you have any more questions about CMPs? Check out the FAQ and Resources sections below!

FAQ

Are all CMPs alike?

No, all CMPs aren’t alike, as it depends on the emergency, the ability of the organization to handle it, and other pertinent factors. But you can find some essential components in every CMP, such as the list of crises, triggers, communication, training, testing, and review.

Is crisis management the same as public relations?

No, crisis management and public relations are different, but they’re closely related. When a crisis occurs within the organization, you must communicate about it to both internal and external stakeholders. Sometimes, poor handling of a crisis can impact an organization’s reputation and this is where public relations and a good external communication plan can help mitigate the damage.

Do I need a crisis management plan?

Yes, every organization needs an effective CMP, regardless of its size. This can help to protect you against financial and reputational loss and can offer safety for your employees. Above everything, it’ll ensure business continuity

Who should I include in a crisis management team?

It’s always a good idea to have a cross-cultural team that includes HR leaders, site managers, marketing executives, communication specialists, and other skilled people in the team. Establish a clear chain of command and make sure it’s headed by people who are capable of making quick and sensible decisions. 

What’s the purpose of a CMP?

The purpose of a CMP is to provide a coordinated response to an emergency. It’s essential to communicate effectively to internal and external stakeholders associated with your company and to mitigate losses. It’ll eventually help you manage your actions in case of emergencies. Finally, it’ll also allow you to minimize your losses.

Resources

TechGenix: Newsletters

Subscribe to our newsletters for more quality content.

TechGenix: Guide on IT Crisis Management

Know what steps to take during an IT emergency crisis.

TechGenix: Article on Cyber Crisis Management

Learn all about cyber crisis management.

TechGenix: Article on IBM and Cisco’s Crisis Management Services

Read this article to learn about IBM and Cisco’s crisis management services.

TechGenix: Article on Managing Tech Catastrophes

Learn about managing a major tech catastrophe

TechGenix: Article on Corporate Security Crisis Preparation

Understand how to prepare for a corporate security crisis.

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