How to create a crisis management plan
Monday, 27 April 2020
Businesses are learning a lot about their operations—especially their strengths and weaknesses—during the COVID-19 pandemic.
Perhaps the greatest takeaway, however, is that every business needs a crisis management plan.
There's no doubt the coronavirus crisis happened so quickly many businesses didn't have time to make arrangements to keep their companies operational. In most instances, disasters happen suddenly, such as bad weather or fires, which is why it's important to always have a crisis response plan in place and up to date.
Every business is different, but here are some tips and recommendations for how to create a crisis management plan for your business.
Analyze your operations
First, assess your day-to-day processes and how they could be affected by a catastrophic event. Focus on the most critical parts of your business, those that generate revenue and serve customers.
How would your business be affected if you lost access to your technology, service vehicles, physical locations, supplies, manufacturing equipment or employees? The goal is to try to anticipate the potential impact on each part of your operations so you can create effective crisis response plans to minimize damage and disruption.
Consider all types of disasters
As we know now, catastrophic disruptions don't just come in the form of natural disasters like hurricanes or earthquakes. The COVID-19 crisis demonstrated how business operations could be completely halted even without physical damage to your facility or employees. Taking all possible scenarios into account will produce a more comprehensive crisis response plan.
Review insurance coverage
Keeping your insurance coverage current is essential to mitigating risk. Developing a crisis management plan is an excellent time to verify your coverage is sufficient and up to date.
Create an emergency response plan
You can often enlist local fire departments and other first responders to help you draft an emergency response plan if you don't have the expertise yourself or access to consultants. Plans should address notification, protection, evacuation/sheltering, communications and monitoring. Employees should be aware of the plan and trained in its implementation.
Plan for business continuity
Focus on the aspects of your business that are mission-critical. Today, most businesses rely heavily on data and technology for their day-to-day operations. For these businesses, protecting these assets and making plans for employees to access them remotely will probably be a top priority. This can often be accomplished by moving data to the cloud and investing in hardware and software designed for teleworking.
If your business is more dependent on production equipment, supplies and on-site work functions, your plan might include options for relocating or leasing equipment, accessing inventory, restoring your supply chain, reassigning employees, rerouting communications and more.
Have a "people plan"
In the wake of the coronavirus pandemic, it also makes sense to prepare for the loss—hopefully temporary—of key employees. Who steps in and assumes leadership roles if senior-level personnel are sidelined? Perhaps more importantly, who will step in to perform day-to-day business operations if you are without your front-line workforce? Clearly delegating responsibilities can help avoid confusion and improve your ability to execute your emergency, continuity and recovery plans.
As with your emergency plans, your entire company should be aware of your continuity plan and their role in it. Also, regularly review all crisis management plans, whether through drills, simulations or tabletop exercises with key staff.
Prepare customer communications
It's also smart to include strategic customer communications in your crisis response plan. While you're working to reboot operations, staying in touch with your customers through email, social media or channels can keep them informed, loyal and connected to your business.
Plan for recovery
With most disasters, recovery is a process. Chances are you will slowly transition your operations back to your original building or office as repairs are made or lockdowns are lifted and employees are allowed to return. Therefore, you will need to keep your essential operations functioning offsite as you make this transition. Similar to contingency planning, having key personnel in place to execute your recovery plan can help smooth the process as much as possible.
Hopefully, the COVID-19 pandemic will be one of the most globally disruptive events we experience for many years. However, it's wise to learn from this experience and be better prepared to face challenges in the future.
The content provided is for informational purposes only. Neither BBVA USA, nor any of its affiliates, is providing legal, tax, or investment advice. You should consult your legal, tax, or financial consultant about your personal situation. Opinions expressed are those of the author(s) and do not necessarily represent the opinions of BBVA USA or any of its affiliates.
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