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Every business operates in a particular business environment which is great as long as there is no disruption. Unfortunately, a disruption often occurs swiftly, especially in the current environment of hyper-competitiveness and globalization. Disruption may be temporary and easily managed for a short-term period or turn into a true crisis. A Better Leader defines a business crisis as "an unstable or crucial event, especially one with a distinct possibility of a highly undesirable outcome." A crisis can negatively impact business continuity unless leadership is able to respond quickly, promptly, and with effective crisis communication with employees and internal and external stakeholders.
Sometimes it seems as if businesses are dealing with one crisis after another. The most recent example was the COVID-19 lockdown and the subsequent supply chain disruptions, but the types of crises are varied. Some are caused by the company itself, while others are events taking place in the marketplace. For example, a crisis could be a global tech war leading to a shortage of critical parts; business operations that harm the environment and enrage customers; ethics violations; quick product obsolescence when a startup competitor unexpectedly introduces a new design with new technology; corruption in the supply chain; terrorist attacks; a global financial meltdown; a recession; a pandemic and on the list goes.
Provoke Media tracks the top 320 crises each year, providing an interesting summary of events that either threatened business continuity or led to the company's demise. An important point you should note is that, in most cases, it was the effectiveness of crisis communication that determined how well the company survived the crisis. You can be a "recoverer" company in which the damage to things like market reputation and stock price are minimized. The company can fully recover and even do better once on track. A "non-recoverer" company experiences damages and is unable to overcome the impacts of the crisis. Stock prices remain lower than pre-crisis prices, senior management is viewed as ineffective, and the brand's reputation is permanently harmed in the eyes of its customers, lenders, and other stakeholders.
There is a huge psychological aspect to a crisis. Psychologist Dr. Jim Taylor, writing for Psychology Today, identifies four qualities of a crisis.
1. They are unexpected and produce shock, triggering an immediate, powerful and primitive reaction that may not serve people well.
2. They create instability.
3. The familiar, predictable and controllable ceases to exist and is replaced by a sense of uncertainty.
4. The uncertainty and instability are experienced as trauma or profound stress: physical, psychological, social, political, emotional, and/or economic.
John F. Kennedy, 35th U.S. President, famously said, "When written in Chinese, the word 'crisis' is composed of two characters. One represents danger, and the other represents opportunity." How your business responds to a crisis can either lead to a deepening crisis or an opportunity. The opportunity lies in bringing out the best in people and help them function as a cohesive team.
One of the most important steps your leaders can take is to develop a crisis communication management plan, with a dedicated crisis management team. Without great employee communication, especially for employees, you can't affect the people involved. We have written a lot about how transparent communication, and transparency is especially important during times of disruption. Hopefully, you already have strong positive employee relations when the crisis hits, giving your leaders a foundation to build a crisis management plan that takes advantage of the opportunity to build an even stronger team.
What are the elements of effective crisis communication that are focused on employees? Following are the six basic elements on which you can develop a crisis communication management plan.
Leadership commitment to open and transparent communication is crucial. If employees are left to flounder and wonder how the company plans to deal with the crisis, employee engagement and employee trust in your company will suffer. The Novartis Professor of Leadership and Management at Harvard Business School, Amy Edmonson, tells managers that you need to be honest about what you do and don't know and the plans for filling the gap in the face of imperfect information.
In a crisis situation, people become anxious and even fearful. The COVID-19 crisis was not only a crisis. It was a large unknown, making it even more difficult for managers to discuss the situation and the future with employees. Employees were anxious about their jobs and business survival. Even when there are significant unknown factors, you must frequently communicate with employees. Your leaders should communicate early and often to improve your crisis management effort.
Think in terms of public relations. The incorporation of public relations in the communication plan addresses the need to manage the narrative. For example, what will employees tell each other and inquiring customers? If employees are kept in the dark, you stand a good chance of two things occurring. One is the internal (grapevine) and external (social media) informal communication process creating false information that employees share with each other as facts. The second is damage to your external relations with stakeholders like customers and vendors when employees present incorrect or damaging information as if it's the truth. In fact, poor communication with remote workers or field workers talking to your customers every day leaves the employees free to pass on the wrong information.
You should establish a system of communication coordination between employees and management with clear and formal lines of communication in the event a crisis occurs. One of the communication challenges today is that employees will turn to the internet and social media when they feel left out. They want to know how and when they will be updated and the best communication channel for contacting management.
You also need safe channels for a two-way feedback system between employees and your leaders. Feedback between employees and management is how you will stay attuned to employee concerns, identify workforce issues you may not easily recognize, and ensure the narrative stays on track.
The strategy will meet two broad needs. One is a reactive crisis communication plan, and the other is a proactive business continuity plan. Both need goals and objectives and progress measured to ensure the planned solutions are working.
A time of crisis is an opportunity to develop a stronger, more cohesive, and collaborative workforce. Employees who believe they are participants in the solution and not victims of the crisis will remain engaged and productive. However, a crisis communication plan is not enough on its own. The one leadership quality most needed during a crisis is empathy, an integral part of emotional intelligence.
Hopefully, your organization has offered leadership training in managing with empathy long before a crisis develops. As Stephen Covey said, "If you don't choose to do it in leadership time up front, you do it in crisis management time down the road." Though empathy should be a standard element of communication at any time, it's particularly important during times of crisis. A crisis can destroy employee engagement if employees believe management doesn't understand or share their concerns. This is true at any time. One of the top reasons employees join unions is because they believe labor union representatives listen to them, share similar experiences, and offer a way for people to unite around a common cause.
Any crisis communication management plan will include many ways to communicate with employees. It's wise to show leadership empathy in all communication – any digital communication tools, social media, podcasts, videos, written and face-to-face. Empathy means your leaders really listen to what the employees are saying about the crisis and their concerns and respond accordingly. Your leaders should have reached a level of emotional intelligence in which they are comfortable telling employees that feeling emotions are natural, and as a team, leaders and employees will work through the crisis.
Companies that recover from a crisis do so because an important element of their total response plan is effective crisis response strategies during and after the disruption. The crisis communication plan applies the proven principles for maintaining positive employee relations when the relations are at risk. A crisis is distressing to everyone involved, but employees need to know that their leaders are leaders of strength who believe in the organization's future and will help the workforce face the challenges.
You can train your organization's leaders on how to implement crisis communication strategies with A Better Leader. In our lesson titled, "How To Communicate During a Crisis" we discuss the following:
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