CoAdvantage- There’s no shortage of potentially business-ending risks facing today’s employers. Every crisis, from relatively petty PR crises to actual life-threatening events like a deadly global pandemic, has the power to devastate a business. Always, the burden is on business leaders to set course and sail through such dangerous times.
The old axiom applies here: the failure to plan is a plan to fail. We would add: the failure to plan is a failure of leadership. Gene Klann, author of Crisis Leadership, says, “The things people do before a crisis occurs have a huge impact on what occurs during that crisis.”
Partly that’s because crisis management is more than just crisis communications, a distinction many organizations fail to make. As McKinsey & Co. writes, “Much of the training top executives receive around crisis management is little more than training in crisis communications—only one part of the broader crisis-response picture.”
In other words, there’s more to managing disasters than just figuring out how to talk about them, and that starts by being prepared. This makes business sense: prepared companies respond better and produce better outcomes. According to PwC, “Companies seen to have responded well to a crisis gain a 22% premium in share value over to those who didn’t.”
Remember, every potential crisis is a risk, so the appropriate approach here is to adopt a risk framework. We’ve written about this extensively previously:
1: Identify risks, including so-called black swan events and risks you don’t even know to think about. Study past crises. As Winston Churchill said, “Those that fail to learn from history, are doomed to repeat it.”
2: Create a plan, including assessing and prioritizing possible risks. In fact, it might be necessary to create multiple plans for a variety of different risk scenarios. Your response to a natural disaster, for example, is likely to differ from a response to a PR problem.
3: Monitor your risk management program over time.
From there, McKinsey recommends creating a “central crisis nerve center” – staffed by executives with representatives from different business segments, like legal, finance, and HR – that can be activated at need.
It’s then important to run this team through possible crisis scenarios or, at least, train them on appropriate protocols before there’s a problem. Ideally, scenarios and procedures will be reviewed, practiced, and updated as needed at least once a year. Company leaders need to know what to expect in a crisis situation and how to respond, especially if they are expected to remain calm and collected in an environment of heightened emotion. Preparing them in advance is key.
CoAdvantage, one of the nation’s largest Professional Employer Organizations (PEOs), helps small to mid-sized companies with HR administration, benefits, payroll, and compliance. To learn more about CoAdvantage’s ability to create a strategic HR function in your business that drives business growth potential, contact us today.