Resilient companies only exist if their leaders take an agile, adaptive, and resourceful approach to handling crises and disruptions as an inevitable part of business, rather than viewing them as obstacles that need to be managed or even leveraged for competitive advantage. This requires changing ones mindset from being fixated on efficiency metrics that look backwards or rigid structures within an organization.
Building adaptability into core business processes and supply chains is also key. Here are some strategies for doing so:
1. Identify Your Risks
An unexpected business crisis can be catastrophic for any organization of any size. A crisis can damage reputation and financial losses, while leading to higher insurance premiums; additionally it can affect customer satisfaction, employee morale and supply chains in various ways – in the worst-case scenario it could even endanger a brand and push consumers away from your products altogether.
To prevent businesses from being overwhelmed by a crisis, it’s essential to have a solid crisis management strategy in place. An effective crisis management plan must consider both immediate and long-term implications of critical events.
Once you’ve identified all potential threats to your business, create a team to develop responses that will reduce risks. Your team should include members from across all departments – IT, HR and talent representatives should help address potential issues. They should also have experience handling crises. Consider consulting external experts such as PR firms or legal counsel for an outside perspective on your plans.
2. Develop a Plan of Action
Establishing issue and crisis management plans may seem complex, yet their existence is essential to your company’s survival. Without plans in place, executives often find themselves making important decisions under immense stress without all of the facts at their disposal.
As part of creating your crisis management plan, an excellent place to start is by identifying all of the different crises that could threaten your business and determining steps that need to be taken in each situation to mitigate and resolve them.
Assembling a team from various disciplines such as legal, finance and public relations to collaborate on your crisis management plan is critical. A process known as Radical Candor allows employees to be honest and vulnerable with each other, which often leads to more innovative solutions than they could achieve alone. Furthermore, having an experienced team familiar with your plan that communicates clearly can reduce any misinformation during a crisis situation.
3. Communicate With Your Stakeholders
Business can be fun when everything runs smoothly, but disaster may strike at any moment – 69% of business leaders have experienced some type of crisis in the last year alone!
Communication during a crisis is of utmost importance both internally and externally, so creating a communications plan with timeliness and consistency in mind as well as having an alternative system in place to safeguard information isn’t lost along the way.
Establishing feedback channels with stakeholders is also key. Doing so demonstrates your investment in the company and cares for their input; additionally, this is an effective way of building trust and reestablishing brand image after an issue has passed.
Avoid adopting the “no comment” policy when communicating with stakeholders, instead take every opportunity to update them on sales, progress and future plans for your company – this will keep them engaged while making them feel like part of a team effort.
4. Take Some Time to Evaluate
As you transition into crisis management, it is crucial to assess how well your plan worked – this may include looking at employee morale, facilities and critical infrastructure performance, customer response rates, financial risks and other elements.
If your company was affected by the COVID-19 pandemic, you may have seen customer order rates decline significantly. Now is an excellent time to implement strategies that help customers reduce orders to avoid overstocking or bad debt and preserve trust while simultaneously protecting the bottom line.
Resilience is often perceived as a supply chain issue, but it should actually be seen as an essential element of all business functions. According to research, companies with resilience consistently demonstrate superior long-term performance value and investing in it can give your organization an edge during times of crises or capture opportunities when competitors are most unprepared.