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Business Crisis Management: Common Mistakes

In many cases, crises management is the thing that differentiates between successful and failed companies. Ignoring the management at proper times may become a costly mistake. Though, while having a plan to manage crisis, does not guarantee how the good the plan is. Each situation is different from another and may follow a unique approach to reducing the reputational risk. Obviously, you would ask what are the mistakes that businesses make while managing crisis. Some are discussed here.

Using untrained spokespeople

To prepare for crisis there should be a representative who is trained to face different ways and handling difficult times. For example, if there is a situation that your team needs to face media, they should prepare for thorough responses to possible questions. For this situation, the team will need some sort of crisis communication training. They will learn how to handle questions that depict the business position in a credible way.

Lack of planning

This does not mean that a company needs to overcome every problem. There is a need of a system to notify the right people when a crisis happens so they gather to examine the matter thoroughly and formulate a feasible solution. The plan should outline:

  • People and faculties to be included in the management team. On the basis of industry, consider people from the legal team, senior management, risk management, health, public relations, safety and environmental departments.
  • A notification channel and contact numbers of concerned parties.
  • List of names and contacts of relevant safety departments, news agencies, and regulatory government that should be informed when a crisis occurs.
  • Training of staff and regular drills for plan testing.
  • Companies dealing with heavy machines where the production stops if even one part does not work properly, an appropriate plan should be there to minimize downtime. The best solution is to find companies that offer mobile steam plants, rental boilers, and other emergency solutions.

Going Dark

Another mistake done by many businesses is going dark. For example, Sony Entertainment did the same mistake during 2011. That was a data security breach occurs due to their play station network attack. The entire situation was clarified in almost one week. The results of the mistake were that the public became beyond control.

Unluckily, if a company fails to communicate in time, it gives media and public the opportunity to peddle rumors and speculations, which are negative in most cases.

Having Lawyers to Manage Crisis

Some manufacturing industries that work with heavy machinery face crisis involving loss of property, death or any kind of injury which may lead to a lawsuit. Such situation can be handled if there is a lawyer as leader of the crisis management team.

So, one effective way to calm down the situation during a crisis is to express empathy and offer apologies to victims. The act of owning the mistake is equivalent to accept legal responsibility. Silence or deny everything is not always a good step in crisis management.

Losing your cool

During a crisis, it is obvious that thing can get heated. One can handle the situation if they stay normal. Acting out of control can be costly.

Mistakes are everywhere. But sometimes they may cost highly to any business or company. Follow necessary actions to minimize these crises and manage them effectively.

 

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About Qudrat Qureshi

Qudrat Qureshi
A Bachelors student at Sungkyunkwan University, South Korea majoring Global Business Administration. Native from Pakistan Qudrat has certain levels of proficiency in 5 languages including Urdu, Hindi, English, German and Korean. He started working as a Freelancer writer for the language services company IGMI Ltd. and within two months continued managing the Customers Service Department and taking part in the company’s Business Development decisions.

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