Corporate Crisis Management: How to Minimize the Chaos
In this article Elizabeth Stevens provides an executive’s introduction to crisis management, why it’s important and the key tenets for successful crisis management.
The business world is getting more complex and results need to be obtained faster. Organizations that hitherto have prospered with a methodical response to threats using a combination of planning and insurance no longer have that luxury. Incidents are becoming more common inside and outside the enterprise. They are also less predictable for when and what will happen. What is required is a way of managing any crisis irrespective of its source.
Vital to managing a crisis successfully are people, processes, and platforms. Underpinning these is the need to communicate effectively between all participants and stakeholders. Miss any and the crisis can rapidly escalate out of control increasing the damage to assets including people and brand.
And if there was any doubt about the long term effect of a crisis on an organization then a study conducted by Oxford University and the Sedgwick Group (now Marsh) should prove interesting reading. The study analyzed the impact of catastrophes on shareholder value, and evaluated companies that responded well to a crisis as well as companies that responded poorly. Not surprisingly, companies that didn’t respond at all or responded poorly suffered a decline in stakeholder confidence, but quite interesting to note that the companies that recovered well actually saw a 22% positive difference in stock price.
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