In short
- The crisis can affect any company – regardless of industry and size: Crisis preparedness should be part of every company’s development plan, regardless of its size or industry.
- How to protect yourself from a crisis? The most common sources of problems: Every company can go through a bigger or smaller crisis.
- A crisis that is building slowly – how to catch it earlier: Every company is exposed to a crisis situation and sooner or later it will happen.
- Warning signs of an escalating crisis: A crisis that builds slowly rarely manifests itself with one clear event.
Securing a company against a crisis means preparing ahead: a written action plan, defined roles and rehearsed scenarios before anything happens. A company that has such a plan reacts in hours, not days – and limits the loss of customer trust and revenue. A company that does not have one improvises at the worst possible moment.
If the crisis is already ongoing, the first hours decide everything — see how we manage Crisis PR for companies.
- The crisis can affect any company – regardless of industry and size
- How to protect yourself from a crisis? The most common sources of problems
- A crisis that is building slowly – how to catch it earlier
- Warning signs of an escalating crisis
- How to build a plan for a crisis – step by step
- Securing relationships with customers and business partners
- Preparation versus improvisation – two examples
- How Commplace helps prepare a company for a crisis
- Frequently Asked Questions (FAQ)
Companies view the crisis as something negative, and that is, of course, understandable. However, it cannot be denied that every company has to reckon with the possibility of its arrival. Crisis situation It is a natural part of business development – you cannot run a company without minor or major setbacks along the way. The belief that a company is resilient to a crisis is at the very least irresponsible.
The crisis can affect any company – regardless of industry and size
Crisis preparedness should be part of every company’s development plan, regardless of its size or industry. The market can turn around in a short time – a good run of business in one industry could become its biggest threat in a few years if the company does not diversify its risks. The better prepared a company is for a crisis, the greater the chance that it will quickly overcome it and not lose too much.
Financial reserve and insurance as a safeguard
Some crises can be mitigated by financial security alone. A company that has set aside a reserve for several months of operating without revenue has time to make calm decisions rather than acting under pressure from a lack of cash. It is also worth checking whether the company’s insurance policy covers civil liability for a defective product, a business interruption, or legal costs – these are questions that are easier to ask the insurer before the crisis than during it.
Training of employees in case of crisis
The crisis plan, known only to the management, in practice does not work. Frontline employees – customer service, reception, and people who manage the company’s social media – should know to whom to direct a journalist or an unhappy customer and what not to say publicly before the company issues an official statement. A short, repeated training on crisis management procedures costs little compared to the chaos caused by conflicting information given by a random person.
Do you think the crisis is the end of the company?
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How to protect yourself from a crisis? The most common sources of problems
Every company can go through a bigger or smaller crisis. The sources of problems can be found in various places – some of them are the result of poor organization of the company’s structures, others are the result of a lack of customers and problems with financial liquidity.
Bad process management in the company and lack of optimization
A company’s operations can be compared to a machine composed of many modes. If one process fails—in marketing, ordering, or warehousing—it causes a cascade of problems in the other areas. The safeguard here is regular review of processes: who is responsible for what, what happens when a key person is absent, and how quickly the company notices this.
If the entrepreneur understands that his company is a set of processes, he will be able to work on their optimization at the same time, which will translate into the company's efficiency. In this way, you can easily avoid generating large company costs or running completely ineffective activities. It is essential to be in control of employees and skillfully team conflict resolutionthanks to which the employees not only know what their duties are, but are also able to cooperate effectively.
Problem with prioritizing
The lack of prioritization of tasks and the attempt to undertake several activities simultaneously are usually a problem for companies that are just starting out. The difficulties begin at the stage of setting goals, and extend all the way to problems with their consistent implementation. No project will start to generate profits unless it is completed, and attempting to work on more than one simultaneously only delays its implementation.
How can we deal with this? The key is a good development strategy and market analysis. This is the most effective way to focus on the most important goals, make better decisions, and create more effective projects. When choosing goals, it is worth focusing on one idea from many, analyzing profitability and potential profits, and based on this data deciding what is a priority.
Promoting services or products through a single channel
This is a trap into which many entrepreneurs fall, and which can lead to a serious crisis in the company. Promoting solely through one channel is risky – what will the company do if it is blocked for any reason or if the rules change? Changes in the advertising policies of large platforms have in the past been able to cut off a large portion of traffic and revenue from companies overnight.
The best way to protect yourself against this type of crisis is diversification – spreading sales and promotions across several independent channels instead of limiting yourself to one.
A crisis that is building slowly – how to catch it earlier
Every company is exposed to a crisis situation and sooner or later it will happen. The consequences of poor management during a crisis can be painful: the loss of reputation or customer trust quickly leads to problems with financial liquidity. The longer a company delays its response to emerging signals, the more costly it will be later to repair the damage – both financially and in terms of reputation.
The key to a quick solution trouble enterprises are adequately prepared for the coming crisis, taking preventive measures and reacting in time. Emergency ordinances it is a difficult art that in many cases is best left to specialists. Thanks to them you will be able to protect yourself against negative effects of the crisis, and to implement appropriate procedures to help avoid it in the future.
Warning signs of an escalating crisis
A crisis that builds slowly rarely manifests itself with one clear event. It is usually seen after several signals at once before it becomes visible outside the company:
- increasing turnover of employees in key positions without a clear reason,
- repeated delays in deliveries or the execution of orders,
- increasing complaints about the same element of the service or product,
- a falling margin on increasing sales – a signal that costs are rising faster than revenues,
- dependence of revenue on one large customer or one sales channel.
None of these signals individually need to indicate a crisis. However, when observed over several months, they are a good reason to review the processes within the company before the problem becomes visible to customers and the media.
How to build a plan for a crisis – step by step
In many cases, simply being aware of potential threats is not enough; a crisis erupts suddenly and unexpectedly. Actions taken without thought and in a state of panic only worsen the situation. However, you can prepare for the arrival of a crisis – and it is worth considering this before it occurs.
| Element of the plan | What it includes | Who is in charge of this? |
|---|---|---|
| Risk map | a list of events that can trigger a crisis and their probability | the management together with the PR and legal departments |
| Crisis team | roles and replacements – who decides, who speaks to the media, who to employees | management, PR, HR, legal department |
| Ready-made templates for messages | skeletal statements under the most likely scenarios | PR department |
| Contact list | journalists, lawyers, institutions (e.g. UODO), key partners | PR department and management |
| Monitoring | tools for tracking mentions of a brand in media and social media | PR/Marketing Department |
| Test plan | simulation of a crisis once a quarter or half a year | crisis team |
A plan without testing is just a document. It’s worth simulating it once in a while – for example, a fictitious data leak or a defective batch of product – and seeing if the team knows who makes the first decision and at what time the first position is created.
Good simulation does not have to be elaborate. A short meeting of the crisis team is enough, where someone presents a fictional scenario and measures the time it takes to create the first version of the position. Such a drill quickly reveals gaps in the plan – for example, the lack of a replacement for the person responsible for media relations when they are on vacation.
After each simulation, it is worth briefly recording what went well and what needs improvement, and updating the plan. A plan that does not change after testing in practice is not different from a plan that has never been tested.
Securing relationships with customers and business partners
Part of preparing for a crisis is not about internal procedures but about external relations within the company. A company that communicates regularly and honestly with its customers – even in the face of minor problems – builds up a reserve of trust that it can draw on when a more serious crisis arises. The same mechanism applies to business partners and suppliers: a company that has clear rules of cooperation and regular contact with them learns about threats from their side sooner – for example, about supplier problems – before these problems affect its customers.
It is also worth preparing a list of clients or partners with whom you need to contact first in case of a crisis in advance – instead of setting it up only during the crisis, under time pressure. This applies especially to key clients who generate a large part of the revenue – a direct phone call to them before they learn about the problem from the media can save the relationship that has been built over years.
Preparation versus improvisation – two examples
The difference is best seen in specific cases. When in February 2018 the KFC chain in the United Kingdom had to temporarily close more than half of its approximately 900 restaurants due to a lack of chicken (the reason was a change in the logistics company), the company quickly explained the cause and did not hide the scale of the problem (source: Euronews, 20.02.2018). By comparison, Volkswagen, after notifying the US EPA of a violation of emissions regulations on September 18, 2015, did not confirm the scale of the problem for several days – only on September 22, 2015, it admitted that the software to cheat measurements had been installed in about 11 million vehicles worldwide (source: NPR, 22.09.2015). The delay in responding cost the brand years to rebuild trust.
A similar lesson is given by the case of Samsung, which on September 15, 2016 announced through the American agency CPSC a recall of approximately one million Galaxy Note7 phones sold in the USA due to overheating batteries (source: U.S. Consumer Product Safety Commission, 15.09.2016). Despite the very high costs of withdrawing the product from the market, the clear and swift decision to recall limited the long-term damage to the brand more than the prolonged explanation of the matter would have done.
The most common mistakes when preparing for a crisis
- The plan exists only on paper. No one has tested it, so in practice it is not known whether it works.
- One person knows the entire plan. When she is absent on the day of the crisis, the team starts from scratch.
- The plan was not updated after the changes in the company. People have been replaced, communication channels have changed, and the plan still relies on old contacts and procedures.
- Lack of clear decision-making thresholds. It is not known at what scale the crisis procedure is activated, and at what scale ordinary customer service handles the matter.
How Commplace helps prepare a company for a crisis
Commplace helps you build a plan for a crisis before it happens: a risk map, roles in the crisis team, and ready-made communication templates tailored to your company's specifics. See how it works crisis management.
It is also worth reading: what is a crisis of image and how to recognize it, effective communication in a crisis situation and why a crisis situation can happen to any company. The progress of the crisis plan, deadlines and team tasks can be managed in one place in the cockpit. Commwork®AI.
Frequently Asked Questions (FAQ)
Do small businesses also need a plan for a crisis?
Yes. The crisis can affect a company of any size – the smaller the company, the less it usually has financial and image reserves to survive a longer crisis without prior preparation.
What should an emergency plan include?
Risk map, designated crisis team with replacements, ready templates for communications under the most likely scenarios, a list of contacts, and tools for monitoring mentions of the brand.
Why is having only one sales channel a risk?
Because if this channel is blocked or its operating rules change, the company loses an income source day by day. Diversifying sales and promotion channels reduces this risk.
How often should the emergency plan be tested?
It is best to do it once a quarter or every six months, in the form of a simulation of one of the likely scenarios. A plan that has never been tested often turns out to be incomplete in practice.
How is a sudden crisis different from a crisis that develops slowly?
An emergency crisis is a single clear event, such as a defective batch of a product. A slowly growing crisis results from accumulating problems – poor process management or a lack of priorities – and is more difficult to notice before it turns into a visible crisis.
Who in the company should be responsible for the crisis plan?
The management team, together with the PR and legal departments. The plan should have a single owner who ensures that it is up-to-date and regularly tested, even when nothing is happening in the company.
Sources: Euronews, „Chicken shortage forces KFC to close over half its UK restaurants”, 20.02.2018; U.S. Environmental Protection Agency, Clean Air Act violation notice against Volkswagen, 18.09.2015; NPR, „11 Million Cars Worldwide Have Emissions 'Defeat Device,’ Volkswagen Says”, 22.09.2015; U.S. Consumer Product Safety Commission, „Samsung Recalls Galaxy Note7 Smartphones”, 15.09.2016.