All About Crisis Management and How it Affects You

One of the most crucial components of marketing is building and maintaining a good reputation. We can see this through every action companies take… how they respond to customers, their products’ reliability and quality, their social media accounts… but nothing’s perfect. What happens when brands/companies inevitably make mistakes? What actions should they take in order to minimize the damage they caused?

What is crisis management, and why is it important?

In an article by Brien Posey and Ivy Wigmore, they defined crisis management as, “…the application of strategies designed to help an organization deal with a sudden and significant negative event”. Basically, it’s how companies deal with negative backlash. This may seem relatively minor, but having improper crisis management skills/situational awareness can make or break a company’s reputation. For instance, back in late 2015, the car brand Volkswagen faced a huge scandal, regarding falsifying emissions reports, which in turn not only violated laws like the Clean Air Act, but resulted in a betrayal within their consumer base as well. As if the scandal itself wasn’t bad enough, Volkswagen’s response to it made everything worse; they released a series of contradicting and inconsistent statements, like claiming they were unaware of the issue one day, then backtracking and saying they knew the whole time the next. This resulted in a 20% sales decrease for the company in 2016, marking its “first annual loss in 20 years”. 

Tactics for good crisis management

Even though the Volkswagen scandal was horrible in itself, I do believe that they would not have faced such major backlash if they did a better job with their response. According to the article “Preparing to Respond: Four Steps to Developing a Crisis Communication”, they should’ve, “been up front and honest as soon as the story broke, kept its response consistent (with an empathetic and apologetic tone), reimbursed all affected customers the same amount” and, “demonstrated a commitment to change in some way”.

Outside of the Volkswagen scandal, though, what are some tactics you can personally use for successful crisis management?

  • Preparation
    • The key to good crisis management is preparation. This is because most of these crisis situations happen suddenly, without warning. Therefore, if you don’t have some sort of preparation/guideline for the potential disaster, your response will most likely be unorganized, and take longer to put out, affecting the trust you hold with your consumer base.
  • Step One: Assemble a Team
    • The first step in developing a crisis management plan is assembling a team that is specifically in charge of managing potential disasters. This team may include, “‘management, operations, internal (including labor relations in union environments) and external communication, customer service, [and] legal’”. The purpose for developing a team, and developing one early, is so, “when a crisis situation occurs, the team is already in place to jump into action”.
  • Step Two: Designate a Spokesperson
    • The second step is designating a spokesperson. This is because, “’if your audience is familiar with the person delivering your messages, they are more likely to believe the message'”.
  • Step Three: Establish an Internal Chain of Command
    • The next is establishing an internal chain of command. This is because, “you need to develop a set of policies and procedures to fall back on in a time of crisis”. Additionally, time is a huge factor in the effectiveness of response, so it’s important to release your statement before either the media or customers with negative reviews release theirs. 
  • Step Four: Practice and Prepare for Potential Disaster Situations
    • According to the article, “you need to prepare and practice your message for any potential disasters”. The best way to do this is to consider some questions like, “What needs to be done to mitigate the risk, emergency, or unforeseen event?”, “Who needs to know (clients, suppliers, consumers, regulatory agencies, law enforcement, legal, emergency response, or media)?”, or, “Who is the company spokesperson (what are their strengths and weaknesses)?”.

Proper Response Example

Even though the framework listed above is what should be used in most crisis management cases, sometimes the best responses only use one genuine strategy: honesty.
For example, when Southwest Flight 345 crashed at Laguardia airport, their social media/PR teams wasted no time to take to social media. But, not in the way that you’d think. Their posts were clear, honest, professional, and quick, letting people know the details of the current situation even before authorities could get some details out. Because of their honesty and their timeliness, most fans responded with appreciation and support for Southwest’s genuinity during the tough time.

Why should I care about this?

Regardless if you’re interested in working directly with marketing/crisis management, or not, being able to respond well to the unexpected is not only something that can help you professionally, but it can help you in your personal life. Professionally, jobs/companies are going to favor someone who is quick-thinking, and knows how to recover from their mistakes, regardless of what job that is; you could be working in the food industry, sales, interior design… having the ability to persevere and recover well is highly valued in the workforce. 

Additionally, even though we can’t always prevent negative things from happening in our personal lives, that same quick-thinking skillset utilized in crisis management could drastically help a negative personal situation you’re in as well. For instance, let’s say you’re driving and all the sudden you feel your tire pop, and your steering wheel starts weighing heavily to one side. Someone who is well prepared, and quick thinking, in this situation would know to pull off to the side of the road, as quickly (and safely) as possible. Someone who may not be as situationally aware may try to continue to drive, in order to get somewhere more desirable to stop their car. 

All in all, crisis management, and the necessary personality skills that come along with it, can be highly beneficial not only in your professional life, but your personal life as well. 

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