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What is Business Crisis Management and How Does it Apply to You?

turbinelabs July 25, 2022
What is Business Crisis Management and How Does it Apply to You?

Managing your business's reputation and public relations through day-to-day operations and business cycles is tricky enough. But on top of monitoring online reviews, industry news, and customer and employee sentiment, you also need to be on the lookout for bigger emergencies like a business crisis.

Corporate crises like bankruptcy and lawsuits or more widespread crises like natural disasters can jeopardize your business in different ways. While there's no way to completely eliminate the risk of a business crisis, you can shore up your defenses and be ready to minimize damage with strong business crisis management initiatives.

Unfortunately, most businesses don't prioritize business crisis management. It may not seem urgent or immediately tied to revenue, so it can fall by the wayside. Even though 69% of business leaders have experienced a recent corporate crisis, according to PwC, nearly a third of companies don't have any staff dedicated to business crisis management. 

Don't let your own company fall into the same trap of being unprepared for a future crisis. In this guide, we'll explore what business crisis management is, how it fits into public relations as a whole, how a crisis can hurt your business, and the tools you can use to start protecting your organization.

What Is Business Crisis Management?

A business crisis is an event that threatens your organization and jeopardizes its current or future success. Different types of crises can cause different types of damage, including:

  • Harming your long-term business reputation
  • Interrupting daily operations and bringing business to a standstill
  • Hurting employees
  • Jeopardizing revenue, profits, or long-term access to stable finances

These harms can be caused by both internal and external crises. An internal crisis originates within your organization, such as a lawsuit for employee sexual harassment that is later leaked to employees or the public. External crises originate outside of the organization and can include a nationwide recession or a natural disaster. Within these broad categories are smaller subtypes of disasters, such as a financial crisis, organizational crisis, staff crisis, or natural crisis.

Business crisis management is the strategies, processes, and plans you have to react to, mitigate, or prevent a crisis from impacting your organization. Full business crisis management considers emergencies that take place at an organization-wide level, as well as crises that can hurt employees, customers, stakeholders, and quarterly or annual revenue.

Components of Public Relations

Business crisis management falls under the umbrella of public relations. Depending on the size of your organization, you may have a PR professional who manages crises as part of their duties, a dedicated business crisis manager, or a full team positioned to respond to business crisis situations. 

It's important to build up your business crisis management, whether that involves a single person or a team, instead of waiting until an emergency strikes. Remember: many organizations don't have a plan or response staff. This leaves time for the crisis to worsen as your organization struggles to pull together an impromptu response or plan of action.

Even when organizations do have a business crisis management plan, it can be incomplete or out of date. 28.9% of organizations actually don't know if they have a suitably updated plan, so be sure to revise and update your plan often for optimal public relations management.

How Does It Affect My Business?

Any business crisis is going to have negative ramifications for your business. But your preparedness can determine how negative it is and how long those negative effects last. Not only will the crisis directly affect your revenue, business, and reputation, but it will also have lingering reputational effects.

Direct Effects

Some of the direct effects of an ongoing business crisis include:

  • Costly or time-intensive legal issues
  • Disruption to your daily operations at individual locations or across your whole organization
  • Immediate harm to business reputation

Each of these effects and more could be quickly resolved, create long-term resistance to business growth, or even collapse your business entirely.

Effects on Your Business's Reputation

Along with the direct effects, your business could see residual harm. New customers will avoid trying out a business with ongoing legal or product difficulties. Even if your crisis is due to internal issues such as having a hostile workplace or a scandal, customers will move on to companies that better align with their values. 

Customers will also be watching the quality of your response to the crisis. Poorly handling an emergency can worsen your business's reputation more severely than the initial crisis itself. But handling a crisis well can help your organization gain new followers and customers that appreciate how you managed the crisis and what changes you made to your organization as a result.

What Tools Can I Use to Support My Business Within Crisis Management?

As you start to build your business crisis management resources, it's important to focus on two critical areas: crisis prevention and media monitoring.

Crisis Management Prevention

Before a crisis strikes, have a plan that directs employees toward the appropriate reactions and responses. The more robust and detailed your plans, the faster and more decisively people can act. Outline responses for different types of crises, different roles in the organization, and different stages of your responses. As part of your prevention plan, you should have at least these five core principles:

  1. Monitor the media for real-time alerts regarding a burgeoning crisis or public opinion regarding your responses.
  2. Have a plan ready for different business crises.
  3. Have the resources ready so you can act immediately.
  4. Be able to accept responsibility, especially for an internal crisis or poor rollout of a crisis response plan.
  5. Be ready for unexpected obstacles.

Use a Media Monitoring Tool

Media monitoring plays an essential role in your preparedness before, during, and after a crisis. Through monitoring tools, you can gain insight into:

  • How other businesses have responded throughout their own crises
  • Online activity regarding your business, products, and reputation

You can stay ready to respond with real-time information about any situation. You can also track information and incidents that may unfold into a crisis in the future.

Of course, media monitoring can do more than support your organization in the middle of a crisis. It can support your daily operations, product releases, and seasonal campaigns by letting you hear customer feedback across countless different channels and helping you identify core consumer groups. Through this monitoring, you can create more tailored efforts to improve your organization's products and services.

Start Preparing for Business Crisis Management With Turbine Labs

Trying to balance business crisis management and preparedness with all of your other PR duties can feel impossible. With media monitoring solutions from Turbine Labs, you can constantly monitor mentions in the background while focusing on your other projects. 

Get reports about mentions and activity trends, be automatically alerted if there are signs of a burgeoning crisis, and have peace of mind that you have one hand on the wheel 24/7. Get started by contacting our team today.