Crisis management

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The most efficient way to avoid crises is through foresight, sensible planning and fixed security procedures for every vulnerable function or area of your company. Yet even the most conservative, long-term planning cannot prevent unforeseen crises that can incur major financial costs for the company affected.

In this context, a crisis is a serious situation that leads to or has the potential to lead to a cessation in production, an interruption in sales, reputational damage or the loss of client confidence in the company affected.

A crisis may be internal (i.e. arising within the company or caused by the company’s activities) or external (beyond the company’s control or responsibility). Examples of internal crises are environmental pollution, product contamination, explosions, etc. Examples of external crises are earthquakes, floods, activism and acts of terrorism.

The immediate difference between internal and external crises lies in the relationship with the surrounding world. An external crisis does not have to be explained by the company to the general public or the media – it is self-explanatory. However, an internal crisis – particularly if the effects go beyond the company’s own sphere – requires an explanation and a determination of who is responsible vis-à-vis the authorities and the media.

Experience shows, however, that even external crises have the potential to engender severe criticism if a company’s foresight or general security policy are deemed insufficient or faulty by the media or the public.

Questions any manager should ask himself

Do we own subsidiaries or other companies abroad? ... Do we send our staff on multiple business trips? ... What measures have we taken to protect our staff or assets? ... How do we assist them in the event of an accident or crisis? ... Do we have an evacuation plan? ... Do our travelling employees know which crisis contact number they should call? ... Do we have a crisis management team? ... Who makes the decisions when some members of the crisis management team are not present? ... If – contrary to expectations – we are hit by an act of terrorism, would the existence of our company be threatened? ... Do we have an emergency response plan, and is it up to date?

If you are unsure of the answer to any of the above questions, it might be a good idea for you to set up a crisis management system which – by means of ready-to-use emergency response and action plans – aims to bring any conceivable crisis under control as quickly as possible. In the aftermath of an incident, a robust crisis management system also aims to limit the negative fallout of the crisis, including reputational damage and negative press coverage, to the greatest extent possible.

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