The Importance Of Crisis Management Plan For Success

Categories: Advice for HR Professionals, Advice for Start-ups and Entrepreneurs, Other, Recruitment Advice, Trends and Learning

As the name suggests, a crisis management plan (CMP) is a strategy document that describes the preparedness of a business to respond to a crisis. A crisis in this regard is a critical situation that can potentially jeopardize the reputation or profitability of the company in question. A CMP can be prepared by anybody, but it is best to involve emergency & crisis management, business continuity, communication and public relations, and damage assessment experts.

Which types of crises should you prepare for when doing business

  • Natural disasters, especially flooding, wildfires, earthquakes, and hurricanes. Basically, any natural occurrence that can jeopardize your operations either by damaging your property or disrupting your supply and/or distribution chains.
  • Biological hazards such as the ongoing coronavirus pandemic.
  • Accidents that emanate from human errors, e.g. accidental fires, your office building collapsing due to structural faults, or hazardous material spilling causing extensive damage to company property occupants’ health.
  • Damages that are caused by human malice, e.g. arson, robbery, or terrorism.
  • Tech-related losses, especially cyber-attacks and data losses.

Many businesses don’t invest in crisis management because, in their reasoning, there is almost zero chance that an ordinary business will ever suffer any of the losses described above. Well, that school of thought has been ruthlessly tested by the coronavirus pandemic. Truth is, your business is prone to be hit by a crisis, regardless of its size. That’s why it is of huge importance to have proper crisis management in place so that even if you are hit you don’t suffer severe financial and legal damages. In that context, to keep your company doing business you need to establish a crisis management plan.

Here are 4 reasons why you should change your mind:

1. Going forward, a CMP might be a factor potential employees consider before agreeing to work for you

We mentioned that public relations are a key part of any crisis management plan. That is why anyone can tell apart companies that were prepared for the coronavirus pandemic from those that were caught flat-footed from the way they have been handling the communications aspects of the pandemic. Organizations that were equipped with stellar CMPs have been able to ease concerns, resolve the crisis situation quickly enough, and protected their human resource from unwanted public attention. Such organizations are more likely to attract top talents post-coronavirus than those that seemed underprepared.

2. Helps you keep everyone safe

Crisis management planning is the prerequisite of crisis management. There is no way you will avoid the harsh repercussions of the crises we described above without a foolproof contingency plan. And when the repercussions are mitigated, your employees, clients, and the public at large will have a better shot at being safe.

A CMP also has an emergency response plan that outlines the actions that you will take in case of an emergency crisis. If, for example, there was fire at your place or a bomb scare, how would you evacuate people? Which public safety responders would you engage? A well-defined emergency response plan will help you make every second count. Note that as short as a one-second delay during an emergency could end up being the reason someone dies.

3. It can minimize damages both in reputation and revenue

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. In terms of reputation, your company will pass as truthful and self-sufficient if it’s able to communicate promptly of an impending crisis and thwart it before it inflicts untellable damages. Potential customers will definitely notice the quick actions you take to deal with a crisis, and that is good for lead generation. Existing customers and partners, on the other hand, already have a positive image of your company, an image you cannot afford to ruin by being dragged through legal and financial turmoil in the aftermath of a crisis. You also don’t want to lose existing customers to competitors because a crisis shut down your operations. In terms of productivity and revenue, your business will suffer financially if it experiences a downtime of any kind or duration, regardless of whether or not you lose customers or you are sued.

Furthermore, if you are considering global expansion, you need to consider that all of the aforementioned crises can as well as happen abroad, and therefore you need to have a customized CMP that would appropriately address the crisis specific to the country of operation.

4. It could be a legal requirement in your location

Crisis management planning is mandated by regulators in most countries. You could be risking hefty fines and penalties if you operate without one.


No matter what type of crisis strikes your business, insufficient and inadequate crisis management comes at high reputational and financial costs. Having a proper crisis management plan beforehand can keep your employees safe, protect your company’s reputation, and keep your business revenues. By having such a plan, your company will be one step ahead of the crisis and at the moment it happens, your company will be fully prepared.