The pandemic may have ushered in a new world, but the basic crisis management principles are as relevant as ever.
COVID-19 escalated into a crisis of unprecedented scale and complexity, for which few organisations were prepared. According to FTI’s Resilience Barometer™ 2020, only 26% of organisations had invested in crisis management in the previous 12 months. Investors are only too aware of this oversight: just 48% believe companies can manage crises effectively.
of executives spent 5 hours or more a day thinking about dealing with crises
Companies which have experienced a crisis are subject to
the media attention following that crisis
were the two most common crises
experienced by respondents in 2019
Lack of preparedness costs dear. FTI’s Anatomy of a Crisis indicates that the average share price impact from a crisis is 3.5 times greater than a purely financial calculation would suggest. Reputational damage, therefore, can undermine value just as much as financial damage. With 62% of workers wanting greater media scrutiny of company actions in the event of a second COVID-19 spike, businesses must work even harder than before to preserve their reputations.
Such crisis plans as existed were at best jumping-off points for companies’ COVID-19 response. The really critical factor was adaptability: the ability to base decisions on new information.
Adaptability depends on principles such as empathy, proactivity, proportionality, decisiveness, cooperation, foresight and caution. These often-neglected concepts should be at the heart of crisis management.
Also essential is a multi-disciplinary team that collaborates and example, before curtailing customer support programmes, finance teams should consult customer-facing colleagues, who will tell them that, as our data shows, 96% of customers expect programmes to continue through any second wave.
As well as putting the right leaders in place – crisis management requires a specific skillset – it’s vital to embed the principles across the organisation through training and awareness exercises.
Enshrining crisis resilience principles in processes and culture will create competitive advantage: superior ability to deal with the challenges ahead.