A crisis is: “Any situation that threatens the financial stability, veracity, cr

Question

A crisis is: “Any situation that threatens the financial stability, veracity, credibility, and/or reputation of an organization”.

By this very nature, a company is already reactive, reacting to an event, while determining the type of communication to push out to the media.

What can a company do to be proactive in any given threatening scenario?

How long does a company really have before damage or too much damage has incurred?

Please be sure to provide examples of past company experiences and the reaction time to media/impact timeline etc.

Explanation / Answer

To be proactive in managing crisis be it financial or operational, the company should first be able to anticipate crisis, and to do that the company needs to form a crisis communications team, and hold periodic meetings with the team to brainstorm and explore the potential crisis scenarios that the company is vulnerable to or has a potential to be vulnerable to. There are tools like vulnerability audits that can also be used for this purpose. This will help the company to identify situations that can be prevented by simple modifications in the current operations or processes. Also, this exercise will enable the company to device a sound plan to retaliate in case of sudden crisis, and how to manage it, giving the chance to think about the potential response about the worst case scenario in case a crisis occurs. His kind of crisis assessment process will enable the company to create a crisis response plan that is suitable for the organization.

In some cases anticipating crisis is easier, for instance, if a company is deciding to lay off a chuck of its employee base, then a crisis is evident, and company can plan before hand how to manage the crisis and the crisis communications.

Generally the company’s don’t have much time before the crisis damages the company’s credibility or stability as information travels very fast in current business environment. The time it takes a crisis to cause damage depends on the magnitude and nature of crisis, for instance, the crisis that JC Penny faced, where JC Penny’s new tea pot has a resemblance to Adolf Hitler, and a Reddit user posted a remark about the same, which became viral. But since the magnitude of the crisis was not that much, JC penny had the time to formulate a standard, light-hearted response it used to all the tweets. Whereas in another crisis, where Apple’s iOS 8.1 update failed to give the users an upgrade addressing the connectivity issues as promised, and caused problems with user devices, like loss of cell service, or problems in touch ID working, etc. This crisis caused damage within a matter of an hour, and Apple had to pull the update back within an hour of the launch, and offer services to the affected users.

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