10 Steps to Managing a Business Crisis
Now, more than ever, it’s important to learn how to handle a crisis and reduce the risk of it reoccuring. Throughout my career, I’ve been the “go-to” for problem solving. I learned that as I gained more experience and more promotions, the problems became more complex and more urgent. While I don’t enjoy seeing people in crisis, I do enjoy helping people navigate their way through it. In my experience, I’ve found there isn’t a challenge that can’t be overcome (even when it doesn’t feel that way).
Whether you’re faced with a change in your industry, personal life, worldwide crisis, or just want to be prepared rather than panicked, these are the steps I use and recommend for managing a crisis.
Before you do anything, take a deep breath – especially if you’re in a crisis as you’re reading this post. It’s easy to get caught up in the emotions that bubble up and fears around what may happen. It’s certainly understandable. But leading with emotion doesn’t always get us our desired results and it can often lead us into making emotional (instead of thoughtful) decisions.
Here are 10 steps for managing a business crisis:
1. Determine what qualifies as a crisis.
To be honest, this should already be identified in your business long before you find yourself in one. A SWOT analysis is a great resource to have in place. If you’re not familiar with a SWOT analysis, it’s the process of identifying the Strengths, Weaknesses, Opportunities, and Threats specific to your business and industry. The truth is most people don’t consider what qualifies as a crisis until they find themselves in one. If that’s you, then you’ll start here. And that’s ok. Start where you are and move forward. This is not a time for negative self-talk or anything that’s going to distract you from managing the crisis.
If you’re not in a crisis, you may want to set aside some time after reading this blog post to do a little extra planning so you’re better prepared going forward. Having clarity around what qualifies as a crisis will help you determine if you’re reacting or responding. Reacting is often impulsive. Responding gives you time to make an informed decision.
2. Determine if you’re truly in a crisis.
Gather the information that’s related to the crisis. All of it. For example, if you’ve got something that’s directly impacting your business, look at all of the areas it affects. Team/staff, operations, customer service, reputation, relationships, and revenue are all examples of areas that may be affected. Make a list so everything is tracked and nothing gets missed. Then review the list and separate the facts from emotion. Sometimes when we are in crisis we may feel and think, “It’s over.” But after a step back and more objectivity, we can see that while it may feel like it’s over, it’s not.
3. Identify the immediate needs.
Based on the information gathered and seeing the areas impacted, you’ll want to determine what’s priority. For example, let’s say you’ve got an issue that’s directly impacting your customers. Depending on the issue, you may decide to notify your clients you’re aware of the issue and that you’ll follow up with more information as the issue is being resolved. Or it may be more appropriate to handle the issue internally and then notify your customers of what happened and how the issue was resolved.
You’ll also want to identify the appropriate people who need to be involved. If you have a team, who are the appropriate people to inform and include in handling the crisis? Do you have the right people in place? Do you need to hire an outside expert with Crisis Management experience? Identify who will be the point person for keeping everyone updated and informed on the status and how the crisis is being managed. Also, identify what information needs to be shared. And be sure to identify what fires need to be extinguished and in what order.
4. Brainstorm a list of solutions.
If you already know what needs to happen to manage the crisis, great! But if you don’t, here are some questions to help you come up with the appropriate solution:
- What’s the desired benefit/outcome?
- What’s the worst that could happen if we implement this option?
- How can we prevent this from happening?
- What’s the cost to implement? (Financial or otherwise.)
- Is this a viable solution?
5. Identify the risks.
What are the risks of implementing any or all of the proposed solutions? For example, let’s say you have an issue where someone publicly bad mouths you and their words have a direct negative impact on your business. If you’re thinking about responding to the comment and have an idea of what you want to say, could those words have a bigger negative impact or cause a public battle? Knowing the risks, is this option still viable? The more you know, the more control you have over the situation.
6. Identify the opportunities.
Every crisis has a silver lining. What’s yours? Look for ways you can use this experience to create a better outcome for your customer and consider the impact it could have on your business.
I have a client who runs a high end hair salon in Los Angeles. She works with a large celebrity clientele who are used to being able to book regularly and pop in to pick up products easily. Recently, she had to temporarily close her salon (like all non-essential businesses during the COVID-19 crisis). And like a lot of businesses that have been affected, it had a direct and immediate impact to her operations, team, and revenue.
We talked about her clients, their needs, and how to create something that provided a solution and relief in a time of uncertainty and then it happened. She came up with a way to bring the salon to them with personalized kits for people needing/wanting color and other hair products. She came from a place of, “We’re all in this together. Here’s how I can help…” The response was positive and immediate. She even had a well known magazine approach her for an interview to talk about her offer. She’s never been busier fulfilling orders and she’s having fun in the process. See how everyone can win?
7. Choose the appropriate solution to implement.
Based on the risks and opportunities you’ve identified for each of your proposed solutions, you should have one or more that stand out as viable options. Choose the one with the least amount of risk and the greatest opportunities (if it applies). Now you can move to implementation.
8. Communicate. Communicate. Communicate.
If you have a client base that’s impacted, share with them what you’re doing to manage the crisis, do it, and then follow up sharing what you did to solve/address the issue. I also recommend letting them know what you’ve done to prevent the issue from happening again (if it’s something that’s within your control).
If you haven’t already, designate a spokesperson to represent the company so there’s consistency. Also make sure the point person is keeping your team updated so everyone is well informed and you have consistent messaging.
9. Reassess and readjust.
Go back and look at everything. Has everything been implemented? Are there any revisions to be made? What about your sales goals or your business operations going forward? Any new or missed risks and/or opportunities? This is your chance to address it and manage the change as you move forward. Determine how often you’ll check in on results and make changes so you can continue to manage everything effectively. Use this time to look at how this impacts your business moving forward.
Here’s why this is important:
Sometimes a crisis can impact our goals and that can impact revenue and budget. If you have the proper tools in place to help you review your goals and readjust where needed, you can work towards what’s realistic instead of constantly feeling like you’re running to catch up to something that’s not reasonable. Think about which approach is going to get you better results. (I thought so!) So where do you start? Right here. It’s called The Visionary Leader’s Roadmap: Essential planning for navigating change and creating profit.
I created this FREE guide to help you determine if you need to make any revisions or adjustments to your goals, so you’re moving forward with confidence knowing what’s possible and how to make the most of it. The Visionary Leader’s Roadmap: Essential planning for navigating change and creating profit includes some of the same tools and resources I use in my own business (which also happen to be the same resources I use when working with my clients). These tools will help you step into your role as a leader and control the direction of your business instead of visualizing it (and secretly hoping it works). You can download The Visionary Leader’s Roadmap: Essential planning for navigating change and creating profit below.
At this point, you should be able to spend some time reviewing what took place. Identify what went well. Look at what could have been done better. Finally, list out what can be implemented to minimize the chance of this happening again. Then go back to those goals you revised and see if there’s anything else that needs to be adjusted.
Lastly, if you have a team you’ve been working with on this issue and you haven’t already thanked them, this is a good time to do so. Remember, everyone likes to feel acknowledged and seen. Don’t assume they know how much you appreciate them. Even a quick note to say, “Thanks. You really showed up and I appreciate it.” can make a significant difference in someone’s day. Be a great leader by being a great leader.
Be sure to download your copy of The Visionary Leader’s Roadmap: Essential planning for navigating change and creating profit. What are you waiting for? It’s FREE!