Every once in a while, unpleasant events are bound to happen. Eventually, every organization encounters a crisis.
Knowing how to deal with crises is not just a delicate art, but a necessity for businesses to thrive.
Table of contents
- What is crisis management?
- What is a crisis management plan?
- Why is a crisis management plan important?
- ‘We screwed up’: A real-world crisis example
- How to manage a crisis mindfully: A 5-step plan
- Communicate proactively
- Focus on understanding the problem
- Prioritize solutions
- Identify the root cause
- Apply lessons learned
- Remain calm in the face of a crisis
What is crisis management?
Crisis management refers to a company’s ability to deal with disruptive or unexpected critical situations that affect the business’ stakeholders, people, customers, and income. It is the process of identifying, assessing, and prioritizing potential risks and implementing strategies to mitigate them.
What is a crisis management plan?
A crisis management plan might include developing a communication plan, establishing emergency response procedures, and training employees to respond to a crisis.
If business leaders, teams, and individual employees are not properly trained to deal with crises, when they inevitably encounter one, they’re liable to panic and make the situation even worse.
Why is a crisis management plan important?
In my 15 years working in product, I can’t even count the number of crises I’ve faced. Early on, some of them made me panic because I lacked the skills to overcome them.
Crises emerge from unexpected situations. Maybe you can relate to one of the following examples:
- Software deployment — After releasing the latest version of your product, something unexpected happens and puts your product down for hours
- Social Network — A customer is enraged with your product and shares a viral story on their social network
- Competitor — A competing product is taking over your customers and you can’t react fast enough
- Press — A journalist writes a strong critique about your company and you start losing customers, investors, and prestige
Anything ring a bell?
Crises emerge for a wide variety of reasons. You may take actions to avoid most of them, but life is full of unavoidable surprises. That’s why knowing how to face reality, as tough as it can be, is a crucial skill to develop.
Let me share with you my strategy for dealing with crises. It has helped me over the years and may also help you.
To demonstrate how this approach works in practice, I’ll walk you through a painful crisis I faced a couple of years ago.
‘We screwed up’: A real-world crisis example
It was the beginning of autumn. The weather was cooling down as I headed to work for a big day. We had been working on performance issues for a month to enable us to scale up. That day, we were launching our new interface.
We started earlier than usual. At 7:45 a.m., the release concluded. I checked our shop, and everything seemed fine.
I felt relieved, but something got my attention. As I refreshed the pages, I noticed the pagination numbers decreasing.
I told a team member I felt something was wrong. He checked our queues and noticed an increasing number of requests.
Without hesitation, he looked at me and said, “We screwed up.”
At that moment, I knew we’d face severe trouble. Panic would worsen the situation. I had to understand the size of the problem. But how?
How to manage a crisis mindfully: A 5-step plan
Here is a five-step crisis management plan to help you wrap your hands around any emergency that befalls your product or business:
- Communicate proactively
- Focus on understanding the problem
- Prioritize solutions
- Identify the root cause
- Apply lessons learned
To demonstrate how this works in practice, we’ll refer back to the example crisis management scenario described above.
1. Communicate proactively
Initially, we couldn’t understand what had happened, but soon we realized that our products had been gradually removed from our shop.
At 7:45 a.m., we had around 53,000 products available. Fifteen minutes later, we had about 40,000. By 8:07, I had the CEO on the phone with me.
The longer it took us to fix the problem, the more money we lost. Every minute costs us thousands. The CEO was mad and stakeholders were getting irritated. A bad situation for everyone.
In a crisis, you’ve got to be sharp with communication. Here’s my course of action:
- Email — I sent an email to company leadership along the lines of: “We’re facing a severe issue. All products are removed from the shop. Everyone is concentrating on getting this fixed. You will hear from me in around 30 minutes. Sorry for this situation”
- All hands on deck — I sat with the team and made it clear that solving this issue was the only priority; nothing else mattered and we needed all hands on deck. I asked them to close their Outlook and MS Teams and vowed on my end to deal with stakeholders
- Face to face — I approached critical stakeholders personally, informed them of the situation, and clarified that we were working on it. I asked them to call me directly and not distract any developer with the trouble because they were entirely focused on solving the crisis
Every 30 minutes, I wrote another email updating leaders on the situation. As the team clarified what was happening, I kept stakeholders in the loop. It was key to let the team focus on the problem while I dealt with business people.
2. Focus on understanding the problem
It took around an hour to understand what happened. The team noticed that the products were removed from the shop because the new interface dealt with product images differently and the shop would remove products without images.
In theory, all products were available in the shop but without images. Therefore, no product could be displayed.
The problem was that the shop had a process to delete images unrelated to products. In other words, more than 500,000 images were deleted. And we knew that processing that amount of images would take long hours.
I had to share the good and bad news with the business. I informed them we had identified the problem, but fixing it would take a while. We were talking about at least 20 hours of image processing.
Stakeholders freaked out because that meant 20 hours without sales. For them, that’s not an option. Yet, we didn’t have a better alternative, so we soldiered on.
3. Prioritize solutions
Developers didn’t know how to fix the problem, but we felt the pressure on our backs. I asked the team if we could gradually fix it. I wanted to get high-runners live as soon as possible.
When you face a crisis, you need to act mindfully. You may not be able to get everything sorted out at once. Prioritization is fundamental to minimize the impact.
I ran some reports and quickly understood that 10 percent of our products brought 90 percent revenue. Those were the ones I wanted to get back to first.
We got together as a team and used our creativity to make those products available in the shop manually. That would buy us time to fix the rest more calmly.
Fortunately, one developer had a card under his sleeve, and in around an hour, we could get that 10 percent live again.
“The secret of crisis management is not good vs. bad, it’s preventing the bad from getting worse.” — Andy Gilman, president and CEO of Comm Core Consulting Group
4. Identify the root cause
Within the high-runners back for our customers, business people calmed down. With a bit more breathing room, we had time to evaluate the root cause of the problem and fix it.
We understood that running our integration could remove the products again. Therefore, we had to spend time fixing the problem correctly.
That was a long day. We left the office at around 1:33 a.m. and had a solution but decided not to run until the next day. We were tired and didn’t want to risk facing the same trouble again.
The problem turned out to be a stupid image property that we inverted, and the shop couldn’t process it because it had strict validation. A simple mistake that cost the business tens of thousands.
The next day, we triggered the process again at around 7:07 a.m. and, as expected, it took almost 18 hours to get all the products back in our shop.
5 . Apply lessons learned
As the dust settles down, it’s time to get together and learn from the situation. Crucially, I used the word learn and not blame.
You want to ensure the team learns something from the situation, but you don’t want to blame anyone in particular for what happened.
“In crisis management, be quick with the facts and slow with the blame.” — Leonard Saffir, public relations executive
In our case, we learned the following:
- Lack of end-to-end tests — Our tests were mainly unit, smoke, and manual tests. We lacked solid end-to-end tests
- Poor error handling — Our application didn’t deal correctly with the errors reported by the shop. If we had better error handling in place, we’d have avoided all the trouble
- Outdated staging environment — Our production and staging environments were too distinct, meaning running releases on staging would never reflect what could happen in production
- Big bang release is a bad choice — We released a critical process for our whole spectrum of products. We should have released and monitored the results gradually
As we reflected on our learnings, we created actions for our upcoming sprints. I’m happy to share that we never faced this issue again, and despite the problems it caused, we were able to catch up and reach our desired business outcome.
Remain calm in the face of a crisis
Dealing with a crisis is, by default, stressful. There’s no way around that. Yet, I can tell you that your life will get easier once you simplify how your team manages it.
I used to panic and people around me would do the same. That would lead to lengthier crisis management than necessary. The secret is to remain calm, remove distractions, and focus on solving the problem gradually.
“Any deep crisis is an opportunity to make your life extraordinary in some way.” — Martha Beck
Featured image source: IconScout
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David Pereira FollowProduct Leader with 15+ years of experience. Partner at Value Rebels and interim CPO at omoqo. Almost every product team is trapped somehow; untrapping them is what drives me.
- Product Management
- #product-management
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FAQs
What are the 5 rules for crisis management? ›
- No successful crisis response begins on the day of the crisis.
- Do the right thing. Follow your mission statement.
- “Trust us” never works.
- Don't assume you can manage a crisis by continuing to do things the way you have always done things.
- Break your own news.
The five steps for drafting a crisis management plan are ground rules and risk assessment; business impact analysis; response and contingency planning; training and coordination; and review.
What is crises management plan? ›A crisis management plan (CMP) outlines how to respond to a critical situation that would negatively affect an organization's profitability, reputation or ability to operate.
What is the steps in creating a crisis management plan? ›- Identify your crisis leadership team. ...
- Assess risk. ...
- Determine the business impact. ...
- Plan the response. ...
- Solidify the plan. ...
- Review and update.
There are six stages within every crisis: (1) warning; (2) risk assessment; (3) response; (4) management; (5) resolution and (6) recovery.
What are the 5 types of crisis? ›- Financial Crisis.
- Personnel Crisis.
- Organizational Crisis.
- Technological Crisis.
- Natural Crisis.
- Confrontation Crisis.
- Workplace Violence Crisis.
- Crisis of Malevolence.
Executives who enable their organizations to recover from a crisis exhibit a complex set of competencies in each of the five phases of a crisis—signal detection, preparation and prevention, damage control and containment, business recovery, and reflection and learning.
What are the stages in the five stage crisis management process quizlet? ›What are the five stages of a crisis? Detection, prevention/preparation, containment, recovery, learning.
What are the 6 stages of crisis management? ›According to Robert C. Chandler, Ph. D., internationally renowned crisis communication expert, a crisis has six stages: 1) warning, 2) risk assessment, 3) response, 4) management, 5) resolution, and 6) recovery.
What is crisis management give an example? ›Crisis Management Vs.
Risk management involves planning for events that might occur in the future, crisis management involves reacting to negative events during and after they have occurred. An oil company, for example, may have a plan in place to deal with the possibility of an oil spill.
Why have a crisis management plan? ›
A Crisis Management Plan makes it easy to detect and prevent a crisis before it happens or before it gets out of hand. That has an impact on both revenue and reputation.
What is a crisis management plan quizlet? ›Crisis Management Plan addresses. major crisis and assists staff in how to respond properly, quickly, and calmly. many organizations do not have a Crisis Management Plan. true. You just studied 11 terms!
What is considered the most important step of crisis management? ›1. Preparation. This is in many ways the most important step, and the one far too many of us neglect. By running a thorough crisis audit during a time of stability, companies would be much better prepared to deal with an impending emergency, and may even eliminate the threat before it occurs.
What are the 5 stages of crisis social work? ›The ultimate goal is to restore the client to equilibrium. The five stages of the crisis are (1) the hazardous event, (2) the vulnerable stage, (3) the precipitating factor, (4) the state of active crisis, and (5) the reintegration or crisis resolution phase.
What are the 4ps of crisis management? ›The four Ps is a mnemonic that captures the essential elements of crisis management — prevent, plan, practice, and perform. These terms remind companies to minimize threats, develop crisis plans, rehearse these plans, and execute them effectively when needed.
What are the stages of crisis management response? ›Crisis management can be divided into three phases: (1) pre-crisis, (2) crisis response, and (3) post-crisis. The pre-crisis phase is concerned with prevention and preparation. The crisis response phase is when management must actually respond to a crisis.
What are the different types of crisis and examples? ›Types of Crises
Existential crises: Inner conflicts are related to things such as life purpose, direction, and spirituality. A midlife crisis is one example of a crisis that is often rooted in existential anxiety. Situational crises: These sudden and unexpected crises include accidents and natural disasters.
- Natural Crisis. Disturbances in the environment and nature lead to natural crisis. ...
- Technological Crisis. ...
- Confrontation Crisis. ...
- Crisis of Malevolence. ...
- Crisis of Organizational Misdeeds. ...
- Crisis due to Workplace Violence. ...
- Crisis Due to Rumours. ...
- Bankruptcy.
Examples of situational crises include natural disasters, loss of a job, assault, and the sudden death of a loved one. Maturational crises occur when a person is unable to cope with the natural process of development.
What is the first and most important step in crisis management? ›Planning is the most important step to ensure an effective response using Crisis and Emergency Risk Communication (CERC). It takes considerable time and effort to develop and maintain a crisis communication plan.
What are the 5 stages of development in the universal leadership model? ›
Our Universal Model includes five stages of progressive leadership development: Egocentric, Reactive, Creative, Integral, and Unitive. Each stage is more mature, more effective and higher performing.
What is the fifth step in the RM process? ›The five steps of RM—identify the hazards, assess the hazards, develop controls and make risk decisions, implement controls, and supervise and evaluate—are used across the Services to help them operate as a joint force. RM must be embedded in Army culture.
What are the 9 basic strategies of crisis intervention? ›These nine crisis intervention strategies include creating awareness, allowing catharsis, providing support, promoting expansion, emphasizing focus, providing guidance, promoting mobilization, implementing order and providing protection and are based on the triage assessment the crisis worker makes upon initial contact ...
Which crisis management example was a good example? ›Industrial Disaster Crisis Management Example: Bhopal Gas Leak. In 1984, a toxic gas leak from a Union Carbide India pesticide plant in Bhopal, India killed up to 30,000 people from immediate and long-term effects (according to estimates) and injured about 575,000.
How do you write a crisis management statement? ›- Use Key Messages, Verified Information, and Don't Get Defensive.
- Define and Isolate the Actual Problem.
- Produce At Least Three Key Messages.
- Present Negatives in a Broad Context.
- Express Empathy and Take Action.
- Be Honest.
Crisis Scenario Examples
Financial- Financial loss such as announcing a bankruptcy or store closures. Personnel- Changes to staff that may affect operations or reputation such as employee furloughs, layoffs, or controversial behavior. Organizational- Misconduct or wrongdoing as a result of organizational practices.
The key steps in crisis management are preparation, implementation and mitigation, and lessons learned, evaluation, and recovery.
What is the first rule of crisis management? ›Here is it. Always plan for the worst case – for more bad news. You see – in crisis management, experience suggests the crisis WILL get worse. A great crisis team immediately splits, with some addressing the crisis, others immediately scenario planning what could go wrong next and how to respond should that occur.
What are the 4 P's of crisis management? ›Those Ps include people (keep every employee informed and lines of communication open), positive cash flow (a critical focus to manage debt), practices (managing with transparency and operating strategically), and positioning (find opportunities to position yourself for growth).
What is the first rule in a crisis situation? ›Julius Benedict : [to Klane] Now the first rule in the crisis situation, you negotiate first and you attack last.
Which are the two best rules for crisis management? ›
- Be prepared. ...
- When confronted with a crisis, appoint one credible media spokesperson.
- Silence is not golden – it usually makes things worse.
- Be quick to respond but avoid a knee-jerk reaction.
- Be clear, factual and honest.
Crisis Management Vs.
Risk management involves planning for events that might occur in the future, crisis management involves reacting to negative events during and after they have occurred. An oil company, for example, may have a plan in place to deal with the possibility of an oil spill.
One key component of a crisis management plan is the safety and well being of human life. The goals of crisis management are to prevent damage to the organisation's reputation, restore calm and stability, return the organisation to its normal operations as quickly as possible, and ensure that people are safe.
What is the first and most important step in successful crisis management? ›Planning is the most important step to ensure an effective response using Crisis and Emergency Risk Communication (CERC). It takes considerable time and effort to develop and maintain a crisis communication plan.
Who developed the 5 stage major crisis model? ›Mitroff's Five-Stage Crisis Management Model and Portfolio Model. In 1994, Mitroff described five crisis stages, which also follow a similar lifecycle progression: Crisis signal detection. Probing and prevention (probing refers to looking for risk factors)
What are the 6 phases of a crisis? ›According to Robert C. Chandler, Ph. D., internationally renowned crisis communication expert, a crisis has six stages: 1) warning, 2) risk assessment, 3) response, 4) management, 5) resolution, and 6) recovery.