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What Not to Do: 3 Crisis Management Examples to Learn From

turbinelabs August 1, 2022
What Not to Do: 3 Crisis Management Examples to Learn From graphic

No matter how stellar your business's reputation or how aligned your company is on organizational values and E&C processes, a business crisis is always possible. Internal scandals, financial emergencies, and even natural disasters can wound your company and bring everyone into crisis mode. 

The trick is investing in crisis management resources ahead of time so you can roll out a plan and respond immediately to the crisis. HubSpot recently collected statistics about what companies wish they had done most to prepare for crisis scenarios, with the most common regrets being not investing enough in:

  • Crisis scenario identification: 34%
  • Executing a fast and comprehensive plan: 29%
  • Internal communications: 29%

You don't have to live through your own company crisis to take advantage of 20/20 vision. See how you can build your own business crisis management plan based on other companies' stories and be prepared for the future.

What Does Good Crisis Management Look Like?

To protect your organization, it's important to proactively create crisis management procedures. These allow your team to act decisively and cohesively in the middle of an emergency so individuals aren't reacting under pressure. 

The best crisis management plans are robust and detailed. They should also have action plans for a wide variety of different crises that are likely to affect your business's employees, customers, and stakeholders — and, ultimately, your revenue and the business itself.

No public relations playbook is complete without good crisis management. Whether your PR and crisis management team is made up of a single person or you have a whole team, this function is essential.

What a Good Crisis Management Plan Looks Like

Because good crisis management is proactive and all about preparation, start your efforts by creating a plan. During this project, consider the following:

  • Types of crisis: Natural disasters, financial disasters, publicized scandals, and more can all impact your business. Consider the unique ramifications of each one, as well as the degree to which they could jeopardize your organization.
  • Actions: Create specific response plans for mitigating the crisis, responding to the crisis (via public remarks, communications to employees, and communications to customers), and more.
  • Actors in a crisis: Determine who will perform which actions and what backup positions or chains of command crisis management plans will follow so there are no bottlenecks or delays.
  • Resolution: Develop resolution plans that aim to end the crisis or restore normal business functions.

Good crisis management plans are living documents; as your organization develops and grows, it's important to update your plans so they're always ready to roll out at a moment's notice.

Internal vs. External Crises

As you're drilling down into different types of crises that can affect your organization, it's also important to create a distinction between internal and external events. These two categories demand different types of responses to ensure business continuity and reputational management. 

An internal crisis can directly hurt your organization without similarly affecting your competitors. For example, if an employee sues your organization for having a hostile workplace, that's an internal crisis. Even if the details of the suit reach the public, it's still an internal crisis because it started within your organization.

Conversely, an external crisis starts outside your organization, and your competitors might be similarly affected. A hurricane or tornado, for example, is an external crisis that interrupts business operations.

3 Real-Life Examples of Crisis Management

Let's explore three common types of crises, specific companies that underwent them, and what you can take away from these examples.

1. Financial Crisis

A financial crisis affects a company's ability to pay off its debts, invest in new capital, and otherwise continue to function or grow. One of the most common causes of a financial crisis is a loss in demand or customers.

Delta Airlines

When Americans reduced demand for air travel following the terrorist attacks on September 11, 2001, airlines suffered. Delta Air Lines found themselves having to file for bankruptcy in 2005 as a result. But by investing in customer experience, the company was able to revive itself. It even created a profit-sharing program in 2020, with $1.6 billion in profit being distributed to its participating employees.

2. Natural Disaster Crisis

Natural disasters such as tornados, hurricanes, and other weather events can significantly impact businesses by disrupting operations, damaging property, and endangering both employees and prospective customers.

Hurricane Katrina

2005's Hurricane Katrina killed over 1,800 people when it flooded New Orleans and surrounding areas along the US Gulf Coast. Not only was the event itself horrific, but man-made factors such as poor crisis management and a lack of investment in the levies worsened the death toll and property damage. Some elements of poor crisis management that your own plans could address include:

  • Evacuation processes (especially for individuals without cars or access to public transit)
  • Availability of emergency supplies
  • Clear communication channels and messaging

3. Organizational Crisis

Wide-scale or long-term poor treatment of employees or customers can also devolve into an acute business crisis.

Wells Fargo

Wells Fargo severely damaged its reputation and public trust in the business. Employees opened millions of accounts without the consent of customers to use their data or open those accounts on their behalf. In doing so, they created fake records, falsified customer signatures, and fraudulently created billions of dollars in revenue. Wells Fargo paid a $3 billion settlement in 2020, with the settlement covering the resulting corporate penalties.

How to Avoid Common Crisis Management Mistakes

Some crises are unavoidable. Whether you think a crisis will hit your organization or not, we recommend taking these steps to protect your organization.

1. Make a Plan

A pre-made action plan can streamline your resolution and ensure public-facing representatives make a stronger, more suitable response.

2. Have a Crisis Manager

A crisis manager is a go-to role for making decisions in the event of a crisis. Having a trained crisis manager or public relations specialist on staff can make all the difference in responding quickly, comprehensively, and appropriately to a crisis as it unfolds.

3. Use Media Monitoring Tools Like Turbine

A crisis management plan passively waits until you know you need it, so you need a mechanism for knowing the instant a crisis is unfolding.

Prepare Your Crisis Management Resources Today

Protect your organization's reputation before it's threatened with a robust action plan and media monitoring tools. When you're on the lookout for a potential crisis and you know exactly what to do in the event of an emergency, you can minimize the damage and regain control of your company's reputation. At Turbine Labs, we create media monitoring solutions that help you monitor your industry and stay aware of developing news. Contact us today to learn more or to schedule a demo.