Companies put a lot of effort into developing the brand, products and establishing communication with customers. But not necessarily in organization management crisis.
However, business needs security.
Development is impossible without it. A sudden crisis can not only do much harm, but even destroy the company.
Especially during the period of active development of social networks. It only takes a couple of minutes for millions to learn about a company’s mistake.
According to the study, 7 out of 10 leaders over the past 5 years have survived one crisis at least.
Crisis management helps to counter this effectively. After all, ignoring the problem will not solve it. And the measures taken to prevent, identify and minimize possible risks can save the company.
What are the challenges when a crisis emerges?
Poor quality management
One of the most dangerous situations for a company is a crisis related to product quality. Refers to organizational crises In case of occurrence, the situation requires immediate action, which will necessarily entail high costs. The latter factor greatly affects the ability to respond.
If product defects are detected, large companies are able to conduct a large-scale media campaign, or offer compensation to customers. However small and medium-sized businesses are deprived of the same opportunities. The outcome of events depends on the pre-crisis reputation of the company.
Efforts to prevent a product crisis must be strategic. Take care of creating a trusting relationship with the client. This will increase the effectiveness of the action strategy in the event of a crisis.
To minimize the likelihood of this, prevention should be carried out. Try to avoid product defects. This will help:
- Quality planning.
- Planning processes, inspections and production.
- Quality Audit.
- Evaluation of the quality of the supplier and audit of its activities.
- Education and training of personnel minimizing the impact of the human factor.
- Analysis of new products. It is necessary to assess the risks, their possible consequences and the procedure for resolving crisis situations.
Lack of coherence in the work of the management team
A crisis is a situation that poses a threat to a company, occurs unexpectedly and requires urgent action. This combination provokes an alarming mood among employees. Eliminating them is the task of leaders.
If the management team works harmoniously, then the company’s activities simply acquire a different vector. The low capacity of leaders deprives a sense of stability. Moreover, the lack of coordination in the work of the management team can provoke another crisis and exacerbate the situation.
Causes of disorder may be:
- Different assessments of what is happening and opinions on the best way to solve the situation.
- There is no strong enough leader who would be able to unite and lead.
- Lack of knowledge in the field of basic issues related to the activities of the company.
- There is no generally accepted program of action.
- Different interests of team members.
- The formed culture of relations between team members does not encourage mutual assistance.
The lack of a clear strategy for the management of enterprises
A crisis never goes unnoticed. In any case, it will affect performance indicators. The only question is which ones. The main objective of crisis management is to minimize such consequences and speed up the moment the crisis is eliminated.
The lack of an action strategy provokes a lot of problems. Firstly, in a crisis, when there is strong psychological pressure and the need for urgent action, panic may occur. Could lead to poor decision-making by managers. Rumors may also occur. There are cases in history when it was slander, fabrication, and misinformation that had the most detrimental effect on a company.
In the absence of a strategy, fear of the crisis increases. Leaders may refuse to recognize or ignore the situation. The morale of the staff is falling. After all, if the company is under threat, then employees are not sure that they will not be left without work. Together, all this greatly complicates the confrontation with the crisis.
Lack of support for management actions by the labor collective
Loyalty is probably the most valuable resource in a crisis. Reputation can soften or exacerbate perception. And it’s not just about the customers.
In times of crisis, managers must support staff by adding value to each individual to the organization. This determines people’s motivation. It is important to communicate with the staff. Management must keep staff informed of the status and future course of action. Tell the truth. Silence, or lies, can completely destroy trust.
Maintain the spirit of the company during this difficult period. This can be done by holding various training, involving external companies or specialists like the Studocu. A regular picnic trip with a team or a joint master class is a great way to improve the atmosphere in the company.
Remember that anti-crisis actions are impossible without the effective work of the team. It is the cohesion of the team that will help to survive. It can be provided through proper management.
The crisis faced by the company poses a threat to employees. This can greatly affect their effectiveness. In order to avoid this, management must support employees.
Common Management Issues:
- fear of losing work;
- lack of personal interest in achieving the goals;
- deterioration of the image of leaders;
- the emergence and increase of tension within the company;
- unfair wage cuts;
- insufficient information of employees.
To overcome the crisis, effective and cohesive work is important. The synergy of the staff strongly determines the outcome of what is happening. The emergence of a crisis is often accompanied by the emergence of many rumors, which are sometimes more dangerous than the situation itself.
Informing helps you to deal with them. Keep employees, the media, and interested parties up to date. Answer exciting questions. Take responsibility, voice action plans and stick to them.
The stages of crisis management
An attempt to prevent a crisis
The first thing to do if a crisis occurs is to prevent the situation from escalating. This requires the right communication. Through appropriate communication, you can warn about the incident employees, as well as interested parties. For example, customers or partners.
In fact, minimizing the development of the situation is the best thing to do if a crisis is inevitable.
When communicating with the media and stakeholders, follow these guidelines:
- Parity. Inaccurate information, silence, or half-truth invariably leads to a worsening of the situation. People want transparency. Honesty and taking responsibility will allow you to maintain confidence in the company, as well as the reputation of the company. Undoubtedly, it is important to consider the legal subtleties. It is normal to provide the media, customers, partners and employees with information relevant to their competence. May vary in degree of detail. However, it is important that the information provided does not have duality, evasion or confusion. Any ambiguity is a risk of loss of confidence.
- Statement. When it becomes clear that a crisis has occurred, it is necessary to form an appeal about this. Describe what happened in it. People want to know what exactly happened and the next steps of the company. Formulate a statement and stick to it until the moment the circumstances change, or the company’s action plan.
It is important that the wording is correct. Your staff must have excellent written and spoken language. To make this grammar better, use services like Grammarly. The first will help to improve your English skills, the second will check the text for typos and errors. Use these or any other convenient tools to increase public confidence.
- Identify the crisis in advance. For this, it is worth highlighting possible risks and factors that will indicate the onset of the situation. Consider them in your action plan. Also identify the appeal to stakeholders and the public. It will not be possible to predict the situation accurately. But you can create a wireframe. If there is one, it will be much easier to act in a crisis. A prompt reaction to what is happening will help to maintain the credibility of the company.
Preparation for management in a crisis
In order for crisis management to be effective, it must be fast. Efficiency requires timely detection of signals. Make sure team members can spot them.
Identifying a crisis is not such a simple task as it might seem. Sometimes companies do not recognize the problem. To avoid this, it is necessary to identify the signs of a crisis. According to them, top managers diagnose the situation.
Take a proactive position. The best option is to organize a brainstorming session with the participation of specialists from different fields. This will highlight all possible crises. Plus, the situation can be considered from different angles. One incident can be felt completely differently by different departments of the company.
Ideally, it is recommended to keep abreast of what is happening in the company. Organize systematic performance evaluations for departments. This will improve the quality of internal communication, ensure close interaction and will identify any threats to the progress of the company.
Remember that evaluating potential crises is useful. This is the cornerstone of developing a response plan. The more accurate and objective it is, the higher the likelihood of taking prompt and appropriate action.
It is important to designate a limited group of people to participate in the process. Do not involve everyone in the task. There have been cases where all the initiative, the employees of the company, have been involved in such a brainstorming session.
This led to controversy. Each individual defended his or her own vision of the situation, criticizing the proposals of others. Time was spent on this, not on important business tasks. As a result, nothing was done to resolve the crisis. And the shutdown of important functions led to insolvency.
Once a plan has been drawn up, it is important to make sure that the staff will proceed according to protocol, if necessary. To do so, simulations are conducted. They make it possible to refine the plan to suit the company’s needs, as well as to detect problems beforehand. Plus, it’s a great way to educate your staff.
It is important to run simulations regularly, but not so often that staff are used to them. The ideal solution is to attract consultants. The specialist will exclude the development of “immunity” to such events.
Good preparation allows us to remain calm and work together during the onset of a crisis. As a result, businesses are not so prone to this at this time, and in some cases are beginning to grow. 42% of respondents said that after the crisis, their company was in better condition.
Analysis of the situation
The existence of a crisis management plan is essential. It will serve as a framework. But the subtlety is that it is impossible to predict a crisis completely until it strikes. Tactics must be adapted to the current conditions.
One of the things that helps prevent, detect and respond correctly to a crisis is information. The most relevant can be obtained through social networks and the media. By tracking company references, communicating with employees and stakeholders, you will be able to detect a crisis at the onset.
It is important to focus on key information. That is, to determine the trend. Highlight the factors that lead to a change of attitude towards the company. Consider them and adapt your strategy.
Monitoring systems should be installed in advance. You can use free Google alerts or paid services to do this. The latter report the monitored information in various user-friendly formats.
Containment of the crisis
At this stage, it is important to minimize the damage from the situation. For this, threats to the survival of the firm are highlighted. In particular, financial and reputational. In the context of the former, it is important to understand how much a company can afford to lose. Identify priority areas of activity. Maintaining their vitality should be one of the cornerstones of an anti-crisis strategy.
What should be paid special attention at this stage?
- Create a crisis management team.
- Select one representative of the company who will make public comments.
- Ensure that clients, employees, media and co-owners are informed.
- A lawyer should be part of the crisis management team.
Resolution of the crisis
As the crisis is resolved, the company’s activities will become easier. At this stage, the focus should be on continuity of operation. The phase planning takes place with the help of the anti-crisis team. It is important to understand what resources are needed to guarantee a company’s sustainability (financial, technological, human) and in what quantity.
Overcoming the consequences of the crisis
When the crisis is over, you want to exhale, and just be glad that it has passed. But do not do it right away. First, analyze the path traveled.
According to studies, 74% of companies turned to outside for help, during or after the biggest crisis. Sometimes a fresh look at a problem can show it from a new angle and find weak areas of business.
Organization, responsibility and firmness of the company is good. However, it cannot be guaranteed that the situation will not happen again. Therefore, after overcoming the crisis, it is important to analyze the actions that were taken by the company. Can they be improved? If so, how? Perhaps the analysis will show that some methods of reaction were ineffective, while others were pleasantly surprised.
This analysis should deal with the crisis team. It is necessary to study the level of effectiveness of the completed plan, the consequences of the situation, the impact on the reputation, staff and partners. What are the relationships with stakeholders? Perhaps the next important step after the crisis is over is to restore trusting relationships with these groups.
Conclusion
Business organizations are not only planning the development of activities but also the development of protection strategies. Resilience is crucial. In the long run, it is it that determines the winners.
Therefore, pay attention to the risks. No one wants to think that a crisis could happen to his company. Moreover, even in a similar situation, people often deny what is happening.
However, the development of an anti-crisis action plan is a guarantee of the safety of the company and employees. It gives an understanding of how to act. Even if the worst happens, people will be able to notice what is happening, objectively evaluate, acknowledge the circumstances, and begin to fulfill the plan. The better trained the staff, the less will be the damage from the situation.
See Also:
- How can I get a Ph.D. in Organizational Psychology in 2022 | Schools, Requirements
- 13 Best PhD Organizational Development Online Program 2020
- UL Innovative Education Award for Organizations in U.S. and Canada
- 2018 Varkey Foundation Challenge Grant Fund for Organizations
- World Meteorological Organization Water Photo Competition 2018
