Running a business is not just about sitting in a conference room, making decisions and talking to people all day. It is about creating value, giving back to society and offering a product or service that people want. While this might sound good in theory, reality often has other plans. An unexpected crisis, is by definition, something you were not prepared for. This crisis could be a natural disaster, a crash in the market, a scandal in the news or a bad investment. How the business deals with such a crisis often defines the company in the future. Today, let’s take a look at some of the most common types of crises to understand the forms they come in and find effective ways of dealing with them.
A financial crisis is said to occur when a business loses value in its assets and the company cannot afford to pay off debts. To deal with a financial crisis, the company needs to organise and prioritise payments, differentiating between essential and less important expenses. For the short-term, money needs to be injected into essentials and all unnecessary expenses should be cut. For the long-term, the company will need to re-analyse revenue sources and look for new ways to generate long-term income and increase profit margins.
A personnel crisis is when an employee or an individual connected to the business is involved in a scandal that might be illegal or unethical in nature. Such a scandal can reflect negatively on the company, who financially supported the accused during the time of the activity. During such a crisis, it is important to fully understand the actions of the individual and the damage it caused to society and the company’s values. Determine the correct responsive action and be open with the media and concerned parties about the actions you will be taking. This allows the company to distance itself from the individual and demonstrate to the world how seriously they take their values.
While a natural crisis is rare, it might be the most destructive type of crisis on this list. Facing a natural crisis can lead to loss of life, goods and even the blocking of supply routes. The only way to deal with a natural crisis is to be proactive in your approach. In the short-term, you can rent a meeting room in Mumbai to meet your clients or rent a fully furnished office space to run your business. Focus on saving human lives and be open to alternative routes to transport your goods. While these might cost more in the short-term, it will be worth the cost of keeping your business afloat. For the long-term, be sure to build sturdy offices that are unaffected by the weather. Have clearly marked emergency exits and pathways. Hold emergency drills to teach employees the correct method of dealing with such situations.
An organisational crisis is when a business focuses on lining their own pockets instead of offering value to customers. This can be done by selling faulty equipment, withholding crucial information and misusing managerial powers. A faulty organisational structure is the reason behind this type of crisis. To deal with this, business owners must first recognise the incorrect practices followed by employees and take measures to correct them. The next step is to write down the company values and objectives and put them up in plain sight. Reward those who follow the correct structure and make it clear that going against the new structure will not be tolerated. Hire people who understand and respect your organisation and hope to contribute to its values instead of those who wish to profit themselves.
When dealing with a crisis it can be difficult to see how it will all end. The most important rule of crisis management is to focus on the next step of the process and make it happen. Begin by treating the areas of the organisation most affected by the crisis. Minimise damage and protect assets, while being open and honest with customers, employees and suppliers. Face the crisis head-on and you and your organisation will come out much stronger and more prepared for similar situations in the future.
Studies indicate that on an average, working people are interrupted every eleven minutes. The real catch, however, is that it takes twenty-five minutes to return to the task at hand. For obvious reasons, these distractions can put a damper ...
Do you feel overworked, fatigued, and resentful all the time at work? If this sounds like you, it’s likely that you are suffering from burnout. The WHO defines burnout as “a syndrome conceptualized as resulting from chronic workplace st...
Professional athletes and entrepreneurs have more in common than they think. The most important commonality between the two is one that is self-evident; their unbridled ambition to be the best. Professional athletes push themselves to the v...