Risk- and Crisis Management – The importance of defined strategies for sudden crises

There are many occasions on which a crisis can strike a business. It often not foreseen and has the potential to harm the organization in terms of finances, revenues, reputation, market positioning, and delivery of products or services.

Building a Risk- and Crisis Management process takes time, resources, and money. As it is hard to foresee what or when a crisis might occur, you need to have flexible plans that can be adapted to the current situation. Documentation of crisis response plans provide a guideline to how to act when an emergency strikes.

?Examples of risks:

Operational risks:

• Mismanagement
• Vacancy of a key role
• Digital breach/hacking
• Labour strike
• Fraud and corruption
• Product/service quality issues
• Delayed deliveries
• Force Majeure

Strategic risks:

• Not sufficient knowledge of suppliers, risking child labour, corruption etc.
• Digital breach/hacking
• Lack of product or service development
• Lack of succession planning
• Lack of the right competences
• Lack of knowledge of market trends

?Setting a process for detecting potential risks and a plan for handling critical situations will demand a project leader with extensive experience from risk-, crisis – and project management.

“We went from a start-up to a growth company in no time and there was no thought on what problems might occur. Suddenly Covid-19 struck, and our suppliers could not deliver our products. We had to act quickly and decided to hire an Interim Manager who had dealt with crisis management before and who was very skilled in communications. In just a couple of days he had put together a crisis management team, set up a strategy for dealing with the financial issues, and our customers and stakeholders were informed about the situation.”

There are 4 general steps to build a Risk- and Crisis Management process:

1. Identify potential risks in your business and appoint a Risk- and Crises management team with clear roles and responsibilities.
2. Set a strategy that can be used as a Crisis Management framework. The set strategies and plans should be flexible to be adaptable in different situations.
3. Document workflows for communications, situation analysis, and concrete actions.
4. Create crisis communication guidelines

If you do not have the right competence internally, you might need support from an Interim Manager when:

• You do not have a Risk- and Crisis Management plan
• A crisis occurs and you do not know what to do or do not have the right competences internally to take the right actions
• You need help in analysing the business to identify both strengths and risks within all areas of your business
• You need to build a team that can handle Risk- and Crisis Management

If you want to know more, you are welcome to send me an InMail.