Nandkumar Y Sanglikar
Crisis management is a part and parcel of our today’s fast paced life. But the word crisis is used very loosely. It is necessary to learn its real meaning and ways to deal with it. Crises affect corporates too as they are just like us humans! Let us study how crises can affect a company in this two-part article.
Management of crisis is a situation-based system that includes clear roles and responsibilities and process related organisational requirements company-wide. The response includes action in the following areas: Crisis prevention, crisis assessment, crisis handling and crisis termination. The aim of crisis management is to be well prepared for crisis, ensure a rapid and adequate response to the crisis, maintaining clear lines of reporting and communication in the event of crisis and agreeing rules for crisis termination.
Crisis management consists of different aspects including:
- Methods used to respond to both the reality and perception of crisis.
- Establishing metrics to define what scenarios constitute a crisis and should consequently trigger the necessary response mechanisms.
- Communication that occurs within the response phase of emergency-management scenarios.
- Crisis-management methods of a business or an organization are called a crisis-management plan. Crisis management is occasionally referred to as incident management.
A crisis mindset requires the ability to think of the worst-case scenario while simultaneously suggesting numerous solutions. Trial and error is an accepted discipline, if the first line of defence does not work. It is necessary to maintain a list of contingency plans and to be always on alert.
Organizations and individuals should always be prepared with a rapid response plan to emergencies which would require analysis, drills and exercises.
The credibility and reputation of organizations is heavily influenced by the perception of their responses during crisis situations. The organization and communication involved in responding to a crisis in a timely fashion makes for a challenge in businesses. There must be open and consistent communication throughout the hierarchy to contribute to a successful crisis communication process.
During the crisis management process, it is important to identify types of crises in that different crises necessitate the use of different crisis management strategies. Potential crises are enormous, but crises can be clustered.
Types of crisis
Lerbinger categorized eight types of crises
1. Natural disaster
2. Technological crises
5. Organizational Misdeeds
6. Workplace Violence
8. Terrorist attacks/man-made disasters
Natural crises, typically natural disasters, are such environmental phenomena as earthquakes, volcanoes, floods, tsunamis, storms and droughts. Remember the torrential rains of 26/07 in Mumbai? Or the Tsunamis of 2004?
Technological crises are caused by human application of science and technology. People tend to assign blame for a technological disaster because technology is subject to human manipulation whereas they do not hold anyone responsible for natural disaster. Samples include software failures, industrial accidents, and oil spills.
Confrontation crisis occur when discontented individuals and/or groups fight businesses, government, and various interest groups to win acceptance of their demands and expectations. The common type of confrontation crisis is boycotts, and other types are picketing, sit-ins, ultimatums to those in authority, blockade or occupation of buildings, and resisting or disobeying police.