Crisis Management: Curtailing the Effects And Finding Opportunities
Here are some measures that businesses can integrate to prepare for as well as process any crisis
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When we face unexpected situations, we uncover deep-rooted potential. A good challenge always encourages us to push the boundaries and explore the opportunities. A business—new or old—is subjected to such challenges now and then, and this acts as a catalyst for growth. But what happens when the challenge overflows? When instead of exploring new potential, the existing potential starts draining out? Instead of growth, survival becomes the primary goal? That is when a business is said to be in a crisis.
The survival of the fittest is not just an evolutionary theory for biology, it applies to economics as well. A crisis can be in any form—cybersecurity breaches, conflict in interest groups, losing a major investor/client, bad debt, etc. Even the coronavirus pandemic created a crisis situation in many organizations—especially those who were not technologically equipped. However, a June 2020 McKinsey & Co. research showed that even with the huge economic losses created by the coronavirus crisis, many leaders are positive that they can convert this challenge into a boon for their business. Here are some measures that businesses can integrate to prepare for as well as process any crisis.
Humans are said to be the biggest resource and then why not utilize them in the process. Consult your peers, other CEOs, mentors, industry experts, and even the juniors if need be. Creative solutions may come from any end. You don't need to divulge all the insider information but you can share the facts. According to research, consulting your team related to matters of utmost importance empowers the employees and increase job longevity and satisfaction.
Customer Relationship Management
It is a well-known fact that 20 per cent of your customers provide 80 per cent of the revenue. Core customers are hard to find and they will stick by you even in tough times, if handled properly. Hence, protect the interests of the top customers at any cost. Maintain their faith in the organization. Reach out to them personally, if need be. Provide the assurance that the organization will overcome the situation. This is a part of minimizing the snowball effect. For example, the US government once asked Apple to integrate a backdoor in its software for government safety purposes. Seeking it as a crisis and the cost being the loss of government support, Apple very strategically issued a public apology to the government stating that although safety is an important concern for the government, customers' privacy and trust are integral to the core of Apple.
Choose the right members to deal with the crisis. From their technological qualification to their experience in the field—you need dynamic and creative people to work on the problem and get the solution.
Focus on Long-Term Goals
The bad times and crisis situations will get over soon. The remedies should be made keeping in mind the long term. This not only provides a direction to look forward to, but it also keeps in intact the trust of the employees and the customers. At the same time, operating cash balance should always be maintained. Third-party resources such as bank loans and investments may falter in crises—hence, worst-case scenarios should be worked out and the policy of survival in those situations should be figured.
What did Apple do in times when the world was circling the corona pandemic? It innovated. It worked hard on the Apple Watch to find out how wearables can provide any warning of catching the infection. A strong Research and Development team goes in a long way especially in times of crisis. Similarly, with bars and pubs operating at one-fourth capacity, some of the breweries in the the UK started selling sanitizers instead of/in addition to beers using the same infrastructure.
Maintain Your Cool
Such situations can be frustrating and irritating. A lot of stress may be induced. Measures such as meditation, online counselling, group discussions, and support of family would help in keeping the mind centered. Anxiety and depression should be kept in check—among all the stakeholders. And this popular motto should be followed—"This too shall pass'.
A strong leadership equipped with skilled personnel can overcome the toughest of situations. All the possibilities should be explored—from a new marketing strategy (say Fair and Lovely's twist to Glow & Lovely amidst continuous backlash) to an altogether new business plan (Suzuki started off in the over-crowded textile industry but then diversified into automobiles, an industry with potential). Even from a financial point of view, possibilities such as mergers and acquisitions, franchising, outsourcing, investor capital, collaborations, etc. should be explored in extreme times. Thus, emotional intelligence, coupled with financial strength and creativity determine the course of a business suffering through a crisis.