The Necessary Crisis Management Plan

We all need to think about having a crisis management plan for our businesses. Tragedy and crisis can come in many forms to a small business. It might not be as dramatic as losing 700 of 1000 employees like Cantor Fitzgerald, a financial services firm located on the 101-105th floor of the World Trade Center. But their plight illustrates that you never know what tomorrow will bring, so you better be ready for the unexpected crisis.

Crisis may come in a less dramatic way to small businesses in other areas of the country. Some situations to ponder are: the death of a key manager, a fire or flood, a lawsuit, embezzlement, a strike, product defect, bad press due to a newsworthy setback or even a computer crash. Any one of these events could cripple or kill your small business unless you are ready to respond.

Strategies for dealing with business crises can be as simple as learning how to avoid potential problems such as having good insurance or a good backup of key documents. Some strategies need to be more complex, like training employees to implement emergency procedures and respond appropriately to the media.

According to James E. Lukaszewski of The Lukaszewski Group, Inc., the goal of a crisis management plan should be containment and positive counteraction. Here are the five critical steps:

1. Structure and plan. Hypothesize the worst scenarios and circumstances, and then the best possible outcomes. In structuring your plan, work backwards from the outcome to identify the steps needed to reach that goal.
2. Analyze and critique. Set up a crisis control committee and talk through the plan, event-by-event, situation-by-situation, and develop a schematic that "visualizes" how the plan works.
3. Test and demonstrate. Conduct rehearsals or simulations as close to full-scale as possible.
4. Establish contingencies. Include "what if's." Identify outside experts who can work side-by-side with your people before the situation gets out of control. Include them in your tests and analyses, too.
5. Coach and train spokespersons as quickly as possible and routinely thereafter. They will lead, focus and control the business's crisis plan execution and reaction to crisis.

Be sure to have this crisis management plan at the ready at all times. I know of a manager that has a crisis management binder at work but also carries one in his car so he will always be close at hand to the names, addresses, phone numbers and procedures for handling different emergency situations.

This week, I have ordered the book, "The Small Business Owner's Guide to a Good Night's Sleep," by Debra Koontz Traverso. This book covers preventive measures for bullet-proofing a business and offers a wealth of information in an easy-to-browse format including proven checklists, examples, case studies and resources. A "Vulnerability Identification Form" helps the business owner conduct the kind of risk analysis that a large company would typically perform.

If you are interested in putting together a crisis management plan, contact a Small Business and Technology Development Center near you for assistance in developing this important management tool for your business.