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Understanding the Purpose of a Crisis Management Plan

Crisis management is truly an essential function in organizations. Anyone who has experienced a crisis at some point must know how much pressure it’s comprised of and how different an approach and skills not required in day-to-day business are required.

A Crisis Management Plan (CMP) is a document that describes the processes that an organization should use in order to respond to a critical situation that could in any way affect its profitability, reputation, or ability to operate. Crisis management plans are used by business continuity, emergency management, crisis management, and damage assessment teams to prevent or minimize damages and provide guidelines for personnel, resources, and communications.

Facing a Crisis Without a CMP

  • Public Safety

A possible crisis can be many things: a natural disaster, accidental human-caused events such as fires and explosions, intentional human-caused events such as robberies, violence, and arson, and even cyberattacks and information breaches. Whatever the case may be – the probability of someone’s safety being in question always exist. Where there isn’t a plan, especially right after the crisis took place, chaos ensues. For example, if there is an explosion resulting in a fire in the building and there isn’t an approved and well-known protocol, the probability is higher than people will start panicking and get hurt than if there was a plan for this situation beforehand. Now a different example, if we are talking about cyberattacks. Let’s say there is a data breach through malware that compromised the information of many millions of customers. If the company’s IT team doesn’t have a management plan, the private information of the customers is compromised.

  • Public Image

It goes without saying that not many things can escape the judgment of the public eye, which is definitely a double-edged sword in crisis-like situations. The thing is that if something bad happens and the organization doesn’t handle the situation well, not only will it affect how people are going to talk about the organization, but also if people are going to approach it in the future for business purposes. On the other hand, if the situation is handled well, the organization is definitely going to get praised by the public.

  • Financial Losses

Firstly, of course, public image negatively affects how people will approach the organization in question post-crisis. But also, not having a CMP almost guarantees at least some post-crisis damage that is left to be repaired. Not only that, considering the public safety aspect, in case someone gets hurt or worse, the probability is also high that the organization is even going to have a legal problem if the compromised party decides to pursue a lawsuit.

How Does Having a CMP Help?

  • Warning

CMP doesn’t manage only the situation during the crisis, but the other stages are well in order to be prepared and know what the warning signs such as an employee’s behavior, weather patterns, company finances, or else are. Although you cannot always predict the timing or occurrence of a crisis, knowing what to look for can only help.

  • Risk Assessment

The risk assessment needs to begin immediately after the crisis starts to unfold. In order for this to be constructive, the organization must be prepared on how to approach this situation, and the experts on CMP management even say that this is the most important phase of handling the situation, about which you can find out in more detail at the following site: https://insigniacrisis.com/crisis-simulations. The discussions that need to take place are the following: the potential extent of the crisis, plausible damages, and resulting problems. By being prepared for this, everyone involved is already prepared for the worst possible scenario and can continue to address the problem by the protocol.

  • Response

Once the level of risk associated with the crisis is reviewed, the organization should able to decide which crisis management plan it is going to implement. After that, everyone involved should be notified of the situation. The response stage of the crisis must involve a lot of communication, as much to inform everyone of the crisis and to begin with the execution of various actions that will be made to manage the crisis.

  • Management

This is the part where everyone involved in rectifying the crisis comes forward to work on managing the chosen response plan, the immediate effects of the event, and any new or worsening effects that possibly arise.

  • Resolution

During this phase, everyone involved in the resolution of the crisis should have fulfilled their given duties, and thus the crisis should be pretty much under control at this point.

  • Recovery

At this point, your resolution plans should be well underway, the warning signs such as an employee’s behavior, weather patterns, company finances, or else are, and your business is slowly getting back on track. This stage includes getting all of the employees back into their normal operations and ensuring that the customers are able to use your services once again.

In these crisis situations, no one can be 100% sure that he is fully prepared because there are just too many variables. But in the end, the crisis management plan is a great way to begin the preparation right away, saving you a lot of trouble if the crisis truly does arise.

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Written by nikola

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