Understanding a Crisis

Warren Buffett is one of the most recognizable – and wealthiest – business figures in the world. He also proved to have full comprehension of crises when he said, “it takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

For executives with experience in managing a crisis, Buffett’s words ring all too true: a major crisis can devastate a community in which a business operates, customers may be hurting, and employees might be facing the loss of their livelihoods. At the same time, it is difficult for audiences to sort fact from fiction, and the rumour mill starts churning faster than ever.

In the midst of this, leaders and business teams have an inordinate number of decisions to make. If they don’t have a good grip on what a crisis is – and existing strategies to tackle one – these decisions become significantly harder to make. 

While every crisis – as i know from doing crisis PR – has its own regulatory, legal and environmental specificities, most follow a clear pattern. Here’s a guide to understanding the three stages of a crisis.

1.      Preparing for a Crisis

This stage, the pre-crisis stage, is often initiated by a member of an organization discovering that a critical situation is imminent. This member, usually a supervisor or manager, must then notify senior management about the coming event.

At this initial stage, communication regarding the coming crisis is typically limited to higher tiers of the organization. Executives and senior managers must analyze the situation, weigh the expected harm, and lay down a necessary course of action.

At the same time, the organization’s emergency notification plan comes into play, with the communications strategy focused on reaching the team members, managers and other stakeholders connected to the incident.

Organizations that have not formed a crisis action plan in advance will no doubt struggle at this stage, and will typically be forced into a reactive stance rather than a proactive one. 

2.      During the Crisis

The next stage is when people outside of the organization become aware of the crisis. At this point, the organization must put its crisis management team into position in anticipation of public blowback. 

Practical and rapid communication is essential during the crisis, so as to make sure that organization members and the public are made aware of the incident and provided with the necessary information. Regular updates, adjusting organizational stance, combating fake news and holding conferences with relevant stakeholders are all actions that can (and should) be taken at this time.

3.      After the Crisis

Once the crisis has been contained, the organization has moved to the final stage: the post-crisis. At this stage, the organization is mainly focussed on recouping losses and rebuilding trust with customers and other stakeholders in the community.

Another objective at this stage is for the organization’s leaders to evaluate performance during the crisis, and identify any changes that must be made to the emergency action plan. Organizations who make it to this final stage without a preparedness plan must prioritize drawing one up based on their experience.

For most organizations, crises are inevitable but they don’t have to be devastating. There is a light at the end of the tunnel, particularly for those who plan ahead.