Crisis management is the process by which an organization deals with a major event that threatens to harm the organization and its reputation as well as its relation with its stakeholders, media or the general public. In broader sense, crisis management can be defined as a discipline within the organization management consisting of skills & techniques required to assess, understand, and cope with crisis situation that threatens to harm company reputation.
When crisis strikes, most companies are unprepared and poorly handle the situation. This further worsens it. Organizations which waste valuable time at the beginning of a crisis can expect to see a major financial loss and dropping stock prices. In such times, the organization’s most important asset is at stake, their reputation. It is useless to conceal the truth from the public because eventually someone will blow the whistle.
Crisis management is thus extremely necessary today, more importantly because News is traveling faster than ever. The News today spreads at a faster pace than the fire, with media on lookout for News 24*7 and increasing access to media by the public. Companies must be able to quickly answer questions and allegations about looming crisis.
PR plays an important role in managing company reputation in such times. One needs to have a plan that begins with a corporate statement. The statement should outline the company’s crisis management approach. The organizations ethics and philosophies should delineate what the company plans to protect.
A good reputation is built over the life of an organization, but it takes hardly any time for it to get maligned by a single incident. Even largest of the brands in business have faced the situation that has tarnished their image in the public. What matters during such times is the way organizations handle such crisis and get their reputation back.
While managing a crisis, the organization should remember the ‘4 Rs’ that stand for Regret, Resolve, Reform and Restitution. The communication from the organizations should ideally focus on these aspects. Regret what happened, but depending on the situation communicate to the public whether you are guilty and you are accepting the fault or if true, you are not responsible for the crisis that has occurred. One needs to be extremely careful in crisis communications, as words can come back to haunt the organization if the matter reaches legal court. Further, one needs to state what the organizations will do to resolve the issue and assure customers that it will reform so that such situation will never happen again. Lastly, Restitution can be offered if required. Remember, a good reputation takes time to build, but goodwill is the best and cheapest way to manage a crisis.