How to handle a crisis effectively for your business

How would your business respond to a crisis? The answer will depend on many things, such as the nature of your business and the cause of the crisis.

We asked Partners Group – a PR agency in York to provide a few pointers as to how best to react if your business should be affected.

“It’ll never happen to me…”

We read about it all the time in the media – crises and scandals hitting high profile brands. We talk with colleagues, friends and families about these crises and the impact they have on business reputations. We might even choose to stop buying from those brands.

But most of us don’t think it will happen to us.

Last year’s Volkswagen emissions scandal led to a 3.4% fall in quarterly sales, an allowance of £4.8billion to cover the cost of the scandal and VW posting its first quarterly loss for 15 years. Closer to home, you don’t have to read too far into the region’s business news to see stories of company directors banned as a result of fraudulent activity.

We look at these situations in amazement, amusement or disgust, but how many of us then go on to think about potential crisis situations in our own organsiation?

What constitutes a crisis?

A ‘crisis’ doesn’t have to be large scale or hit mainstream media for it to have an adverse effect on a business. All it takes is a group of people who are unhappy with their meal in a restaurant; a train full of commuters having a bad rail journey experience; a power failure leading to production shutdown and missed deliveries, and suddenly businesses are facing the wrath of disgruntled customers who may well choose to go elsewhere for their next meal, journey or order.

And social media only exacerbates the problem. Today, something that might previously have been dealt with between customer and provider is often aired on social networks for other customers – and potential customers – to see. For a small, independent restaurant that is just starting out and heavily reliant on good reviews and positive word of mouth recommendations, a poor review can make the difference between success and failure.

Every business – large and small – has potential crisis scenarios, events or situations that could adversely affect trade and damage their reputation. So what can you do to identify these risks in your organisation and take steps to mitigate them?

Think about ‘what if?’

Many organisations invest in managing their reputation through ongoing, positive PR activity, but don’t give any thought to what could go wrong. It is well worth spending some time thinking about the worst that could happen, what you would do in those situations and going through ‘what if?’ scenarios. You may not be able to predict every eventuality, but you’ll certainly improve your readiness to deal with the most likely situations and be better prepared should a crisis occur.

A crisis is likely to fall into one of three categories. It could be of your own making – perhaps your product quality isn’t up to scratch or noisy lorries are leaving your factory at unsociable hours resulting in complaints. It could be that you are a victim of someone else’s actions – a competitor spreading rumours about your products and services or a disgruntled ex-employee taking you to a tribunal and threatening to go public with their grievances. Or it could be a case of misfortune – a subcontractor going bust and leaving your customers feeling let down, production disruption through a factory fire, or an IT system failure that cripples your business.

Develop effective communications strategies

Often it isn’t the crisis itself that defines an organisation; it is the way that crisis is handled. At the heart of successful crisis management is effective communication. Say nothing, and customers, staff, other stakeholders and the media will speculate and draw their own (often wrong) conclusions.

It’s likely that you and your team will have enough on your plate dealing with the practicalities of the crisis to think about communications. If that is the case, think about bringing in a PR specialist who can help. But remember: it’s not about spin, it’s about spelling out the facts and keeping customers, the local community, investors, employees, the media and anyone else connected with your business informed.

And if you do find yourself managing the communications around a crisis, here are some areas to think about:

1. Assess the situation: what’s happened and why? Are you a victim or the perpetrator?
2. Who does this situation affect and how? These are the people you need to communicate with.
3. Who knows what so far? Who else needs to know? Think about your staff, their families, the local community and other stakeholders.
4. Step into other people’s shoes – what will they be thinking or fearing? What can you do to reassure them?
5. What are you going to tell people, and when?
6. Which communication channels will you use? Face to face? Telephone calls? Emails to your customers? Your company website? Print, broadcast and online media in your local area or industry sector? Social media?
7. Keep to your word. If you tell people you’ll update them in two hours, do it. Even if there isn’t anything new to say. Otherwise, people will think you’re hiding something and start to fill in the gaps themselves.

Take these steps and you’ll be well on the way to creating a cohesive crisis communications plan.