There are currently more than 6.1 million businesses operating across America throughout a range of different industries. These provided employment to thousands of Americans and can be extremely lucrative if managed properly.
Opening and running your own business is an incredibly exciting time and can give you a lot of freedom and control over your own career path. However, it isn’t always going to be smooth sailing. In fact, 20% of small businesses in America fail within their first year.
This can be as a result of economic developments or a lack of business planning. Some businesses may face more serious obstacles, such as crises. This is why knowing how to avoid crisis management mistakes is essential if your business is going to survive.
So, how can a crisis management plan help and what do you need to know about surviving a business crisis? Read on to find out eight crisis management mistakes and our solutions for avoiding them!
What Are Crises for Businesses?
A businesses crisis usually involves an event or a series of events that disturb your ability to run your business as usual. Some examples of business crises include:
- Loss of assets or debt
- Serious cases of misconduct
- Crises of skewed management values
- Deception with public-facing information
- Major service interruptions
- Natural crises (such as the COVID-19 pandemic or natural disasters)
- Confrontation crises (such as walk-outs and boycotts)
- Violence in the workplace
- Criminal or illegal activity within a business
Each of these can massively disrupt the day-to-day running of your business and may threaten its long-term stability. This is why most businesses have protocols in place to avoid major crises.
That said, not all crises are avoidable, and responding properly to a crisis is essential. However, the majority of businesses fail to prepare properly for a crisis. With that in mind, let’s take a look at eight common mistakes businesses make when handling a crisis.
1. Not Having a Proper Crisis Plan in Place
When a crisis occurs in your business, knowing what to do next is vital. This ensures that you are able to respond quickly to the events of the crisis. This is where having a crisis management plan comes into play.
Putting together a crisis management plan also allows you to think calmly and in a measured way outside of a crisis. This means that if a crisis does occur, you can make informed decisions without the stress of the events getting to you.
Unfortunately, a lot of businesses fail to prepare an adequate crisis management plan. Instead, they believe that their protocols and plans will be enough to keep major disasters at bay. But no business has absolute control over what happens to it and without a thorough crisis plan in place things can quickly spiral out of control.
Solution: Create a Crisis Management Plan
The solution to this issue is fairly straightforward: create a thorough crisis management plan for your business. When writing a crisis response plan you should include:
- Risk analysis strategies for assessing the damage of the crisis
- Activation protocol for your responses (these usually depend on the severity of the crisis)
- The chain of command involved in crisis management
- A command center plan for who will take control of a crisis
- Your response plans
- An internal communication plan
- An external communication plan
- Resources that you will need for crisis management
- Appropriate crisis management training (which staff should receive in advance)
- A review protocol
Depending on the area of business that you work in you will need several different crisis management plans. For example, all businesses are at risk from natural crises so should have a protocol in place for this.
In the last five years, there have been more than 6,000 data breaches across the country. So if your company deals in any sort of data management then you will need a cyber attack management plan in place as well.
2. Failing to Test Your Crisis Management
Putting together a crisis management plan is all well and good. But how do you know that it will work in the event of a disaster?
Obviously, you cannot control every single part of what happens in an actual crisis. That said, it is very important for everyone involved in a crisis management plan to have a thorough understanding of their role within it. This is something most people can only learn through doing.
The last thing you want is to be facing a major crisis and realize that the staff involved in managing it are underprepared. This could have devastating consequences for your business.
Solution: Test Your Management Before You Need It
It is important to test out your management plan before you need it. Once you have put it together, creating crisis management drills will quickly expose any issues with your plans.
This might involve additional training that your staff needs. Or it might highlight an area of crisis management that you have overlooked.
Recording your crisis test run response gives you something to review. From this, you will be able to see which areas of crisis management you have taken control of and which need work.
It is a good idea to run regular tests for your crisis management plan. That way you know that your protocols are up-to-date and ready to go if you need them.
3. Failing to Act Quickly in a Crisis
A business is something that requires immediate attention from your management team. Without this, the effects of it can quickly spread and cause serious damage throughout your business.
Not dealing with a crisis properly can make your business seem disorganized and risky to work with. If details of a crisis get leaked to the media or authorities in your area you could face serious backlash.
This might result in lawsuits, losing valuable customers, and financial damage. It will also make you look like an easy target to people who might want to take advantage of your business, such as cyber attackers.
Solution: Create Crisis Management Deadlines
Being proactive about crisis management is essential if you are going to get it under control as quickly as possible. This will also help to stop minor issues from becoming major disasters.
Your crisis management risk analysis and protocols will ensure that the right people can take action quickly. It’s also a good idea to create a system of reporting problems throughout your company. That way all of your staff will be able to flag and review minor issues efficiently.
This ensures that any sort of crisis doesn’t have time to fester and grow.
4. Not Communicating With Your Staff
Your staff is the biggest resource that your company has so utilizing them in a crisis is essential. However, you also have a responsibility to keep your staff informed during a crisis.
Depending on the type of crisis that you are facing, this can be a very stressful and daunting time for any of your staff. At times like this, it can be easy for rumors to spread quickly and for people to behave in a way that is reckless.
Keeping everyone onside and supporting them properly ensures that all of your staff will ride a crisis out with you.
Solution: Keep People in the Loop
So what’s the best way to keep people in the loop? Well, it’s important that you acknowledge the information that people may have heard and that you respond with facts.
Obviously, it won’t always be appropriate for every single member of staff to know what is happening during a crisis. However, reassuring them that your crisis management team is taking care of things is essential. This shows your employees that you are being proactive about the events affecting your business.
It’s also a good idea to welcome communication with them. For example, make sure that they feel able to raise their concerns with an appropriate staff member. Or, if you are facing a crisis that might affect your staff’s mental health, provide resources for counseling and support.
5. Winging It With the Media
If your business is successful then the chances are that the media will take an interest in it. While this might be singing your praises initially, they will also take an interest if you face a crisis.
Knowing how to handle the media is essential. In fact, failing to do this properly could do far more harm than good. For example, it won’t reflect well on your business if your media spokesperson is not able to answer questions from the press.
A lot of people overlook the importance of preparing for media interactions. However, a bad story in the newspaper would seriously escalate a crisis by instilling fear among your staff and customers.
Solution: Invest in Media Training
Having a proper media plan in place during a crisis is essential. This might involve planning specific press conferences. However, it is also important to respond to events as they unfold and this might mean holding unexpected interviews or conferences.
Three things are extremely important during this time:
- Giving your staff appropriate media training in case they are approached by the press
- Having specific spokespeople who understand the crisis thoroughly
- Taking control of media interactions from your end, rather than waiting for the press to knock on your door
If you are facing a crisis then it’s a good idea to get support from a strategic communications firm, such as Miller-ink.com. They will be able to provide guidance on all media-related aspects of your crisis management.
6. Trying to Hide Your Mistakes
Trying to hide a mistake during a crisis can cause even more damage than dealing with it slowly. After all, your company will still feel the effects of that mistake whether it is out in the open or not.
On top of this, hiding it will breed serious mistrust towards your company from its clients and staff. So in the long run this will do you much more harm than good.
Solution: Be Open and Offer Up Solutions
When you are trying to protect your reputation it can be tempting to sugarcoat everything. While you don’t want to seem totally incompetent, it’s important to admit when a problem has occurred.
When you acknowledge this, make sure that you have some effective solutions to offer up to people. For example, if you have suffered a cyber attack you should invest in upgraded cyber security. This shows people that you are taking a problem seriously and fixing it properly.
7. Breaking Crisis Management Protocols
Putting a plan together and facing a crisis are very different things. After all, when you put a management plan together you are dealing with hypothetical situations. When you face the real thing it can be very stressful and you might lose your cool.
This can cause people to abandon the crisis management protocols that you have in place. While it is important to be flexible in a crisis, this could result in more serious damage. In fact, breaking company protocols could cause another crisis in and of itself.
Solution: Stick to Your Plan
It is important to stick to the plan that you have had in place and be aware of things that might be affecting you during a crisis. Making a decision that seems positive in the short term could mess up your crisis management plan further down the line.
So try to reflect on what is really influencing your decision-making when you face a crisis. And stick to the plan rather than making any rash decisions.
8. Not Learning From Your Mistakes
After you have been through a crisis it can be tempting to close the door on it and walk away. However, this means that you miss out on a valuable opportunity to learn from your own mistakes.
This actually puts your company at serious risk of facing a similar crisis in the future. If you have found certain aspects of your crisis management ineffective then the last thing that you want to do is leave these in your future management plans.
Solution: Document Your Crisis
Documenting a crisis and reviewing it afterward gives you the perfect opportunity to reflect on what happened. This helps you identify the causes of a crisis and assess how effectively you managed it.
You can use this information to shape your future protocols and crisis management plans. So you won’t find yourself repeating any mistakes in the future.
Protect Your Business By Avoiding These Crisis Management Mistakes
As a business owner, a huge part of managing your business will involve how to avoid crises. However, as this is not always possible, planning for the worst-case scenario is essential. This includes understanding common crisis management mistakes and knowing how to avoid them.
Keep these top tips in mind and you can’t go wrong. We publish all of the latest business news every day. So keep scrolling now for more brilliant tips and inspiration.