An Introductory Guide to Crisis Management

Best Practice Guide

Best practices for starting a crisis management program for your organization

Corporate crisis doesn’t only happen to global brands. Crisis can hit any company, at any moment. In fact, corporate crisis is more likely to pose an existential 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. close following a natural disaster, an increasingly more common kind of corporate crisis.

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 seems most organizations, irrespective of size, do a poor job of crisis management planning. A 2014 study revealed that 32 percent of companies had no crisis management plan in place. Meanwhile, fewer than half of all board members (47 percent) believed that their organizations had the capabilities or processes necessary to meet a crisis with the best possible outcome.

Even though crisis is a fact of corporate life, organizations tend to assume they are immune and fail to plan adequately. That is despite the clear risks associated with crisis, i.e. harm to stakeholders, losses for an organization, or even extinction. Why do businesses take the risk?

One explanation might be that organizations conflate crisis with critical events, consistent slow-burn issues that affect an organization, and which could turn into a crisis if not properly handled. Another culprit: companies are prone to view crisis solely in its most dramatic forms, like the category-five hurricane, the once-in-a-century flood, or the unprecedented data hack that dominates the news cycle.

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