Crisis Management: Get It Right and Win (Part 1)

The Tip of the Spear

The importance of #crisismanagement in business continuity management (#BCM / #BCP) cannot be overstated. Get it right, and you will win the day when the chips are really down for your organization. I think of crisis management as the tip of the spear in your response to a major event (crisis, disaster, risk event, etc.) of any kind. Using a cross functional group of leaders from within the organization can lead to the speed and synergies needed to gather intel, assess the event and appropriate respond.

In more general terms, crisis management plays a crucial role in ensuring the smooth operation and survival of businesses during times of uncertainty and disruption. By effectively managing crises, organizations can minimize the negative impact on their operations, reputation, and overall business continuity. A well-developed crisis management plan allows businesses to identify potential risks, establish procedures for handling emergencies, and allocate resources efficiently.

One key aspect of crisis management is its ability to mitigate financial losses, and really, that is what we strive for in the practice of BCM. By promptly responding to crises and implementing effective recovery strategies, businesses can limit the financial damage caused by disruptions such as natural disasters, cybersecurity breaches, or supply chain failures. Additionally, crisis management helps protect a company's reputation by enabling swift communication with stakeholders and ensuring transparency throughout the crisis response process. For a public company, especially one in the financial sector, this is critical.

Furthermore, an effective crisis management program that is holistic instills confidence among employees, customers, investors, and other key stakeholders in the organization's ability to handle unexpected events. This trust strengthens relationships with stakeholders and potentially increases their loyalty towards the brand or company. Reputation within a company is often overlooked as an important benefit of an effective program.

All these things are great, important, even critical items. However, why would I say it’s the tip of the spear? First, the obvious allegory in a major event, a crisis management team would be the first to activate to respond, thereby being the leading edge of the event horizon. Even without business continuity plans or formalized technology recovery plans in place, decisions can be made quickly to save the organization from total #disaster. The less obvious reason for focusing on setting up a crisis management program first is that it builds a business case and support within the organization. More on these points next time.