Types of Crisis a Company Could Face

2020-02-03 by EPR Staff

Mistakes just happen; nobody plans for them. Often these are little mistakes that accumulate into big issues if they go unnoticed by the team. Of course, to anticipate failure is not such a fun task but it goes a long way in equipping the team on how to respond. If a crisis is poorly resolved or left unresolved, it can permanently damage a brand’s reputation or cause it to collapse.

A good PR team will assess the situation and determine if it is a crisis based on the following criteria:

●     The issue poses a real threat to the firm

●     The situation involves an element of shock

●     There is pressure from the public and media

Types of Crisis 

Financial Crisis

This occurs when a company can no longer afford to manage its debts. It could be caused by a sudden drop in the demand for goods or poor management of funds. A company can respond to this crisis by release funds to cater to short term costs. The next smart move would be to evaluate its revenue resources and focus on the sources that generate long-term income.

Personnel Crisis

This is a common type of crisis that affects most industries. It is when an employee associated with a company acts in an unethical or illegal manner. This can cause serious backlash from the public against the company. The employee’s misconduct often reflects on the company they are working for and can damage its reputation. There are practical steps a PR team can take in such a scenario:

●     Examine the whole situation to determine to what extent the employee violated the company’s values

●     Call for disciplinary action

●     Provide a written or verbal statement, which likely includes an apology

●     Be transparent if the situation has drawn media attention

Organizational Crisis

This is where a company uses its customer base for its own selfish gain. It could include withholding vital information, abuse of managerial power and exploitation. The best way to address this issue is to change the company culture. Hired employees should be ones are aligned with the firm’s values. 

Natural Crisis 

Natural disasters such as earthquakes and tornadoes can disrupt the normal functioning of a business. It would be good to plan ahead especially if the company is situated in an area that’s prone to such disasters. Be proactive by doing these three things:

●     Build the office with resilient materials

●     Have an evacuation plan

●     Plan for an alternative location in case extreme weather makes the office unavailable

Although it is impossible to prevent a PR crisis, it is still possible to manage it. A company can plan ahead and anticipate what might happen and how to react. This includes efficient communication with the team and having an evacuation plan. Sometimes, the damage happens before a company can contain it. Still, a company can salvage the situation by taking full responsibility for what happened, even issuing an apology.

Leading crisis PR firms are 5WPR and Sitrick PR.