Every business owner or manager needs to be prepared for unexpected situations. Emergencies and crises can easily affect your project planning and even your company planning as a whole. From economic recession to bad weather, you need to be prepared for these contingent situations.
For companies without crisis management training, these situations can cause crippling setbacks. But with a crisis management plan in place, companies can easily and quickly respond to these unexpected events and get back on track.
What Is a Crisis Management Plan?
Simply put, a crisis management plan (CMP) outlines how your company will react to a crisis. It includes numerous components, including identifying the actions needed to respond to the crisis and setting roles for each individual or team. The goal of a crisis management plan is to reduce the crisis’ impact so your company can return to operations as quickly as possible.
Your crisis management plan is a public document that management and employees can refer to when a crisis occurs. Most CMPs are checklists, but you can also choose another format that makes sense for your business.
Crisis management plan examples include outlines for a variety of potential crises, including:
- Natural disasters
- Biological hazards
- Technology issues
- Accidental events
These crises can threaten your business’s strategic objectives, operations, finances, or reputation. They can also threaten the safety, health, or even the lives of the people involved.
As you create your crisis management plan, you will ask questions such as:
- What risks could your company face?
- What safety and business continuity processes should the company follow in the face of a crisis?
- How can each team contribute to an effective crisis response?
Developing an effective crisis management plan is crucial because the plan helps you minimize the effects of the crisis and return to normal as quickly as you can. More importantly, the CMP can prevent people from making poor decisions in the heat of the moment. That, in turn, can prevent them from accidentally worsening the crisis.
Crisis planning also helps your team focus on the company’s priorities during a crisis. It can also reduce uncertainty and stress associated with unfamiliar situations. We’ll go into more detail about the importance of crisis management plans later in this guide.
How to Create a Crisis Management Plan in 8 Steps
Aside from studying crisis management plan examples, it’s also important that you learn how to create a crisis management plan. We’ve incorporated these steps are incorporated into the examples later in this guide.
1. Assess Possible Risks
Before you get too far into your crisis planning, sit down with your team and brainstorm the potential risks. While some risks are common across industries, their comparative likelihood and risk level will vary based on your industry and company.
You can start by looking for a crisis management plan sample for your industry. But you will also need to brainstorm to come up with other possible risks and adapt the sample plans to your specific organization. Remember to consider events such as the following:
- Extreme weather events
- Cyberattacks
- Product recalls
- Social media mistakes
- Public relations blunders
- Workplace issues
During this stage, seek input from as many people and tools as possible. There are even tools like risk registers that can help you determine the possibility of a given risk. Ideally, you want to rank the crises according to probability and severity, so you know which ones to prioritize in your planning.
2. Establish a Crisis Team
One of the first steps of crisis management is to create a crisis team. Every CMP should have clear leadership, as it’s important that employees know who is in charge during crises. Having an authority figure in such uncertain times can help boost employee morale and prevent panic.
The earlier you create this crisis team, the easier it will be to complete the process of creating a crisis management plan. That is because doing so ensures that everyone on the crisis team knows all of the details of the CMP and can provide input on it.
3. Determine the Impact on Your Business
Go back to your brainstormed list of potential risks for your business. For each of them, look at the potential impact on your business. Remember to analyze each risk individually, as they can all have different outcomes. Some potential business impacts to be aware of include the following:
- Regulatory fines
- Reputation damage
- Customer attrition
- Delayed sales
- Lost income
If you aren’t sure where to start with this, look for a business impact analysis (BIA) template online and see how it applies to your business.
4. Plan Your Responses
Creating your company’s response to crises is the most crucial stage of learning how to create a crisis management plan. This is the time to decide what actions you need to take when the threat occurs.
As an example, your plan for a cyberattack could include securing the network. Meanwhile, another team member could assess the damage, and another could inform your customers. Or a social media blunder’s CMP could include issuing public statements and briefing customer service agents.
Once you have a basic response planned, it is time to go into more detail. Your crisis management plan starts with a written (or even verbal) strategy, but it goes beyond this. You need to include emergency contacts and activation protocol. You also need to get input from key stakeholders, who need to be kept in the loop during the crisis. Don’t forget to check relevant regulatory requirements as you plan your response.
5. Review and Get Feedback
Every member of your crisis management team should review the CMP to ensure that it is detailed enough and is not missing any potential risks or actions. This is the time to get feedback from others involved, including stakeholders, experts, or anyone else involved in the plan.
Don’t forget to regularly examine your crisis management plan. This lets you keep it up-to-date as your company and the potential risks change.
6. Consolidate a Document Outlining the Plan
Having a consolidated document outlining the crisis management plan will ensure that everyone is on the same page. It will also serve as a reference for your team during the crisis, so they know exactly what to do when the unexpected occurs.
Your finalized crisis management plan should include all of the following elements:
Risk analysis
This is a written version of the first step, where you outline the potential risks. Specifically, you rank them in order of their probability. New members of your crisis response team or new managers can refer to this list of potential threats in the future.
Activation protocol
This part of the plan lets you know when you need to follow the plan. It outlines what has to occur for you to decide to take action during a crisis and follow the plan. For example, you can list a specific business impact that has to occur to activate the CMP.
Emergency contacts
Every response plan needs to have emergency contacts listed, as it will speed up the response. Evaluate your plan and the scenario to see who you may need to contact, and then add their contact information to your list. These contacts should include anyone relevant to the risks in question, such as:
- Law enforcement
- Fire department
- Hospital first responders
- Poison control
- Plumbing services
- Electricians
Response procedures
This is one of the most important parts of your CMP, as it specifies each person’s roles and responsibilities in a crisis. A RACI chart (Responsible, Accountable, Consulted, Informed chart or roles and responsibilities matrix) is one of the simplest and most effective ways to do this. Having clear roles and responsibilities for everyone helps with communication and accountability.
Don’t forget to include the chain of command in your RACI chart. This needs to be clear for consistency and organization. Keep in mind that some plans will have several layers of command. For example, there may be a company-wide crisis response leader as well as lower-level leaders at each company location.
Command center plan
Your CMP needs to outline where your base of operations will be during a crisis. This is also the time to list all of the relevant utilities and supplies required. Don’t forget to include a backup command center.
Other resource requirements
The supplies at the crisis command center aren’t enough. Make sure that everyone involved in the plan, including external advisors, has the resources they need to handle their roles during the crisis.
Communication strategy
In some ways, this is a part of the response procedures. You decide who will update the public on the crisis as a spokesperson and who will be in charge of feedback. You will also need an internal crisis communication plan in addition to the external one. Make sure that all team members can receive instructions from the chain of command.
7. Schedule Training Sessions to Discuss the Plan
The other steps of crisis management will go to waste if you don’t ensure that everyone understands their roles. Keep in mind that, without clear instructions, panic and stress can cause employees to temporarily forget their training or instructions.
Start by providing easy access to the plan, including the crisis management document you created. It can also be incredibly helpful to use a crisis management application with real-time access to contact lists, up-to-date documents, incident reporting, and more.
More importantly, you also need to train your stakeholders and employees on the plan. Have regular drills or rehearsals to ensure that everyone is familiar with the plan. This will reduce the risk of anyone becoming overwhelmed during a crisis and forgetting their role or where to find the relevant information.
8. Assess After a Crisis
It’s crucial that you regularly review and update your crisis response plan. One of the best times to do this is after any crisis occurs. A post-crisis assessment is the best way to see what worked well in the plan and what didn’t work. This will guide you to make changes and improve future responses.
4 Crisis Management Plan Examples
Your specific crisis management plan will depend on the risk or crisis that it responds to. Because of that, you will have to customize your crisis management plan template to specific situations. You can use each following crisis management plan sample as a starting point or checklist for your plan.
1. Technology Issues
Technology issues or failures can leave your team or customers without ready, secure access to data when they need it. This crisis can hurt your bottom line and reputation.
For technology-related crisis scenarios, your crisis management plan should include contingency plans. That should include quick damage assessment and ensuring data protection. Your contingency plans should also take into consideration strategies that ensure your employees can remain productive even during the crisis, such as the use of personal equipment.
2. Natural Disasters
Your company’s location will give you an idea of what natural disasters you are most likely to have to prepare for. For example, if you are in the southeastern United States, you would want to create a hurricane crisis situation plan. That would include elements such as evacuations, disaster recovery, and communications with first responders.
If your office is located on the Western coast, you want to prepare for earthquakes. In this case, you want to include processes that should be followed once the tremors have stopped. These processes may include using checklists and head counts to account for employees and visitors in the building, checking injuries and providing first aid if necessary, and calling emergency assistance.
3. Financial Loss
A financial loss can lead to consequences such as laying off employees or announcing bankruptcy. You can create a CMP for a financial loss even if you aren’t sure what could potentially cause the crisis. The CMP may include strategies for efficiently escorting newly laid-off employees off premises and written or verbal notices to concerned employees.
4. Organizational Mishaps
This type of crisis would occur when your company is accused of wrongdoing or misconduct. Your crisis plan would outline how you will respond to the issue. It would most likely include a public apology and a plan for recovery.
Why Are Crisis Management Plans Important
Crisis management plans are essential for ensuring business continuity in the face of emergencies. With a CMP in place, you can minimize the impact of any crises and reduce long-term effects and damage to your business. You can also improve your company’s resilience while making sure your employees feel safe and valued during crises. Moreover, a CMP helps protect your company’s reputation.
To get these benefits, you need to not only develop a crisis management plan but also properly train your employees.
Without an effective crisis management plan, your company could lose money when a crisis occurs. You can also hurt your business’s long-term financial health and miss out on major growth opportunities.
Some business owners mistakenly think they can delay creating a crisis management plan because nothing will ever happen to their business. However, the recent COVID-19 pandemic perfectly illustrates the need for a business continuity plan or a CMP.
An interview of 2,000 senior executives in 2019 also found that 69% had one or more corporate crises in the last five years. Respondents averaged three crises during the course of those five years. That same survey found that organizations with a CMP did better after a crisis by nearly two to one. Of companies with plans, 41% were stronger after the crisis and 39% saw revenue growth.
Or consider the severity of the impact of a crisis on small businesses. The Federal Emergency Management Agency reports that roughly 40% or more of small businesses end their operations following disasters.
Steady Business Growth to Deal with Crises
Your crisis management plan can’t work in a vacuum. You should give your company the best possible chance of getting through a crisis, and that includes prioritizing business growth. If your business is growing constantly and steadily, you will be better equipped to recover from a crisis. After all, your growth will make up for lost profits, customers, or other problems.
Podium is an excellent tool to help you grow your business, driving more customers to your company. Start by getting more reviews, so you get more business. Having more positive reviews will drive potential customers to your business, and Podium makes it easy to encourage those reviews.
You can also use Podium to turn your website into a conversation starter. Podium’s webchat goes beyond just communicating with website visitors. It makes it easy to take the conversation offline, such as to text messages. This lets your customers continue the conversation on their preferred channel.
Speaking of texting, Podium is also ready to help you with text marketing. Use it to send one text that drives thousands in revenue. Take advantage of the high open rate of text messages and consumers’ preferences for them.
With steady business growth, you won’t have to worry about a crisis as much, as your company will be better prepared to recover. Combine that with a traditional crisis management plan to set your company up for success.
