As the impact of the Covid-19 outbreak continues to grow, business leaders across the world find themselves dealing with their own corporate crisis. Here are three main considerations companies should be applying when reviewing their crisis management plan.
2020 will definitely be one for the history books. Coinciding almost directly with the appearance of the Covid-19 virus, it is turning out to be one of the most devastating years in history — for society, the global economy, and, of course, for business.
Before the pandemic, nearly 7 out of 10 corporate leaders had experienced a corporate crisis in the last five years. But that statistic barely has any relevance anymore, as it is safe to say that all corporate leaders are dealing with a corporate crisis right now. And it is not just any corporate crisis. No system outage or data breach can compare to what is in store for corporate leaders as they tackle the ramifications of Covid-19. Dealing with a product malfunction feels relatively simple next to the broad and deep implications of Covid-19.
In all likelihood, the aftermath of the global pandemic will reverberate throughout the business world for years to come. Cancellations, quarantines, supply chain disruption, and other side effects of the pandemic are only beginning to be felt by the global business community. According to the Federal Reserve Bank of St. Louis, the growth rate of the Gross Domestic Product (GDP) in the U.S. is predicted to slow by 50%. Most countries can expect a sharp recession, too. Finally, experts predict a more volatile economy in the future.
Unless you are a pandemic expert, there is no way you could have predicted the Coronavirus and its economic fallout. Nevertheless, it makes sense now more than ever to review the crisis management plan that you have in place. Chances are, your current plan has no provisions for handling a crisis like the one we are all experiencing now.
Below, we have outlined the new considerations companies should be making when reviewing their crisis management plan.
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1. Incorporate safety and survival
Most businesses never imagined having to make decisions about their business that affected their employees in a life-or-death magnitude. The truth of the matter is, most have had to close their doors at least temporarily in order to protect their employees, their customers, and their families from exposure to the Coronavirus. These measures also protect suppliers and vendors throughout the entire supply chain. Closing doors has flattened the curve in many areas, thus saving lives.
Communicating proactively has been always key in any crisis but with a pandemic (or any other surprising event that might occur), it is critical. Your messaging should focus on:
- The current impact of the crisis on the business and on employees
- The actions being taken to minimize the impact of the crisis
- The actions being taken to protect employees
The goal is to reassure your company and its employees that you are taking fast action based on a good understanding of the crisis at hand. You may also need to send similar reassurances to your investors, clients, or stakeholders if you have them. They will want to know how the crisis is affecting operations and, in cases like the spread of the novel Coronavirus, whether you are capable of handling the crisis (in its different aspects) in the best way possible. That dovetails back to a burning question your employees will have: will the business survive the crisis?
For all of these communication necessities, it helps to have a communication system already in place, one to which your employees are accustomed to turning for important company news. Be sure to outline and define who should contribute, whether it is the CEO, department managers, HR, or a committee.
A robust communication platform that allows for questions and feedback, and which can act as a repository for easy access to important resources can play a central role in how well your company responds to a crisis. It is also a place where company managers and executives can show good leadership by being transparent with staff about everything — explaining difficult decisions as well as sharing critical instructions on whether and how to keep working without affecting productivity.
2. Outline the recovery
Once immediate concerns about safety and survival have been addressed and communicated, leaders will need to take steps to position the company for recovery. Operating effectively in the midst of a crisis is fundamentally a factor of resilience. The resilience capacity of your company during a crisis will depend mainly on your success in these two areas:
- Tweaking and improving operations to adjust to current circumstances
- Bolstering productivity levels
Your crisis management plan should address infrastructure and the extent that your systems allow your company to flex and respond to change. Switching to new sales channels (social media, for example) or new delivery models (e-commerce, for example) is easier when you follow an Agile business model. Agile businesses are, by definition, already braced for change in a dynamic marketplace.
Surviving a major crisis is easier when your processes are Agile, too. This goes hand in hand with having a modern network and internal systems that help staff stay productive. It also means you are likely to have customer-facing apps that keep customers connected and that build your brand so you can depend on loyal customers during stormy times.
3. Prepare for the ‘new normal’
Nobody knows how long the current crisis might linger. However, what is apparent is that there will be a ‘new normal’, and the world is already getting used to it. Consumer behavior is already changing, as people adjust to the new reality brought by the pandemic.
Worldwide, the outbreak will continue to impact supply chains in a wide range of industries, from automotive to technology and could wipe out USD$2.7 trillion from the global economy, with recessions in multiple countries.
In your new crisis management plan, outline steps to move your business forward. Have a game plan for thriving, not just surviving. Allow resources for making the necessary changes in your business to be there for customers post-crisis. For example, an IBM study revealed several important consumer behavior changes. In your revised crisis management plan, outline how your company might respond to them:
- Event attendance will be down
- There will be a stronger preference for shopping local and online
- Remote work is growing
Remote work is a very likely candidate for what the ‘new normal’ will look like. Over half of respondents in the IBM study said they would like to work remotely permanently, as their primary way of working. Nearly 4o percent want their employers to offer remote opportunities, even after normal operations are resumed.
The bottom line
Crises are a time of trial for any business but they can be a time of opportunity and learning, too. Having a good crisis management plan in place can make a big difference in determining how well your company weathers the current global Covid-19 crisis. Take the time to review yours now, updating it so it meets the needs of your employees so they can continue to meet the needs of your customers.
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