The Big Idea - Coping with a Crisis

Peninsula Team

June 24 2011

We all watched in shock as BP struggled for almost three months last year to plug the leak in its Deepwater Horizon well in the Gulf of Mexico. Along with the tragedy of the 11 men who died, the disaster caused massive environmental pollution and a loss of livelihood for many of the shrimping and tourist businesses located in the area. In addition, this led to incalculable damage to the reputation of a company which had previously been lauded as a national and international success story.

As a small business, crises of this kind may seem to belong to a different world. But don’t be deceived and don’t be complacent. Crises can affect any business of any size, and the relative impact to your own business can be devastating, even if it doesn’t make the global front pages.

One of the ways to help deal with a business crisis and to minimise its impact is to plan ahead and get prepared. Statistics say that 25% of businesses do not re-open after a natural disaster, which is a sobering thought. Some businesses never recover from crises. However, thorough preparation for such unplanned events can, at best, minimise their impact and, at the very least, perhaps help your business to come out of the other side still trading.

To give you an example, living and working in the Lake District, I was struck by the impact that the floods of 2009 had on so many of our small local businesses. Whilst insurance might have covered the damage to stock and premises, the financial impact of the business interruption and the emotional distress caused seeing businesses that had been built up over generations wiped out overnight was enormous. It had a deep and lasting effect on the local community.

So as a business, what can you do to prepare for these issues?

The first is to sit down and think through the sort of disasters you might have to face. Living in the Lake District, for example, flooding was always a possibility. Look at your location, the type of business you operate in, your customer base, your employees, your suppliers and from there, identify your vulnerabilities.

It’s useful then to grade the potential risks from the most likely to the least likely. You can then begin to plan according to the priority of the risk. For example, it’s probably more likely your business premises may go up in flames or your IT system is hacked than perhaps a terrorist attack occurring. Also, remember to include supply chain in your planning. Even if your business is untouched, if your main supplier were to be flooded then how will that impact your operations?

From there, discuss your “what if?” plans. Could you move to a different location? Does your IT have back-up at a different site? Do you have provision for your staff to work from home?

The next step is to draw up a Business Continuity plan which details in writing what will happen in the event of a crisis. In the plan, highlight the main business areas that need to be up and running as soon as possible to ensure some sort of continuity, and what will need to happen for that to be a reality. Individual roles in a potential crisis situation should be explained to all relevant staff and they should be reminded regularly of their roles.
All contact details should be included and a chain of command agreed to ensure everyone knows their place in a crisis and can fulfil their specific responsibilities. Furthermore, it’s worth considering whether they need any additional training to meet those demands under pressure.

Keep revisiting your plan as your business changes to ensure it still reflects the business model. There’s no point producing a perfect Business Continuity plan for it to gather dust in the drawer. At least once a year, hold a meeting with the key staff to go through the plan, remind everyone of their roles and come up with any new risks or threats to the business.

In the event of a crisis the key is to keep your head and follow your plan. If you have planned well, at least you have a cushion of comfort knowing that this has been thought about in advance, processes are in place and your team are briefed and prepared.

Once you’ve examined the specific situation and agreed with your team on the appropriate actions to follow, then the following advice is key in a crisis:

• Act quickly and decisively to resolve the situation
• Be honest
• Be accessible
• Be confident
• Be compassionate
• Be flexible and, if the situation changes, communicate this as quickly as you can

Crises are never welcome but can sometimes, in the long term, be good for a business. Whilst difficult situations are unavoidable, if handled well, companies can come through them stronger and with greater loyalty from their customer base and employees than they had before. So get prepared – a stitch in time spent thinking about the worst may prove invaluable if it were to happen.

Deborah Done, the author of our Big Ideas, is founder and director of Nab Communications, a freelance public relations agency which provides sensible and value for money PR advice to regional and national businesses.

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