Corporate Crisis Management

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Written by:

Ciro Dias Reis is the president of Imagem Corporativa board member of PROI Worldwide Crisis Group.

In the age of digital transformation, crisis management has become even more challenging. 

Nowadays communication is faster and escalates immediately. Every organization may be affected by negative situations, but the way the organization reacts makes a lot of difference and can help (or not) to protect both credibility and business.

 

Studies around the world show that more than 2/3 of all the crises faced by companies and organizations in general could have been avoided. If not avoidable, the crises could have been limited in terms of damages – if the company had a crisis prevention program in place.

 

Avoidable
According to the Institute for Crisis Management (ICM), in the USA, during 2018 the traditional and online press reported 792,336 crisis situations of different degrees. Among those, 67 percent could have been avoided due to existing signs of potential risks they carried which were neglected by the management of the organizations involved. Only 33 percent  of the crises were sudden and unforeseen enough to make it difficult to mobilize the organizations involved in advance.
Once again in 2018, the most common source of crises, according to the ICM, was management and administration problems  like questionable or inappropriate practices. Examples are misconduct; neglect, unethical posture and collusion.  22 percent of all mapped corporate crises in the world were caused by management and administration problems.
Communication is key
Consumer dissatisfaction and complaints; product recalls; environmental problems; corruption and fraud cases; legal disputes.
No matter the cause of a crisis, the fact is that communication plays an important role when it comes to facing negative situations.
That’s why is important to prepare the best spokepersons, to create key messages and previously approve them and to prepare and produce consistent narratives to explain what happened and what will happen next.
After all, the maintenance of credibility, image and competitiveness may depend on the attitude of those affected by a crisis. The better the preparation and agility shown to all the stakeholders involved, the better the reputation protection and the recovery of trust in the market.
 By Ciro Dias Reis, President of Imagem Corporativa

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