Crisis management strategies for entrepreneurs

Crisis management strategies for entrepreneurs

Crisis management strategies. Large and small companies - even the best-managed companies - may be affected by an unexpected public relations crisis, the crisis may be withdrawals of dangerous or corrupt products, a civil liability lawsuit, or some other unexpected disaster that may harm sales, and may reflect any From that bad image of the company.

When a PR crisis occurs, the CEO's first reaction is to block talk to the press and refuse to comment. Public relations experts who have successfully dealt with many crises see this as the wrong way to deal with the problem, and instead urge a different approach, which is immediate and complete public disclosure, this is the proven way to defuse and solve the crisis positively, so the PR initiative is considered Sincere and powerful, which includes controlling losses and represents an opportunity to rebuild your company’s public image, is the best approach. 

How to manage crises

Although each crisis has different aspects, most general principles apply to it, no matter what the crisis, the media, and people want to know what happened, and your customers want to know the cause of the problem and how you can fix it, and this includes any possible compensation for the damage or problems that may have been caused to them.

Crisis management strategies for project owners - dangerous or corrupt product withdrawals - immediate and full public disclosure - the company's public relations crisis 

The correct principle for dealing with such crises is telling the truth, the whole truth and nothing but the truth, and saying it immediately and publicly, does not make statements subject to guesses or multiple interpretations regarding any aspect of the crisis, and make sure that the legal advisor checks all the data before disclosing it. Concealing the facts about the crisis is often counterproductive, as the media can detect and report it widely, and do more harm to the company than the damage already done.

Addressing the media

In most cases where the public relations crisis affects the company, the media will contact the company CEO, a company spokesperson, the public relations department if any, or some members of senior management. Correspondents will request specific interpretations and data for their reports.

It is recommended that a crisis management team be appointed, and that a member of the group - the spokesperson - be directed to direct all requests for information to him, and that no one else but him be allowed to speak to the media. The internal information about the crisis must be delivered to the crisis management team or the spokesperson only, to ensure the uniformity of the company's speech, and if there are technical aspects related to the crisis, a specialized person is appointed to speak to the media in this aspect.

 

The general statement should also include how people are affected by the problem, as it includes informing customers who may have purchased a withdrawn, defective or corrupt product, that they will be replaced by a similar product or the financial value of the product. Sometimes a rotten product must be disposed of, and customers must be informed in an appropriate manner.

 

When addressing the public or the media, present a calm, sobering face. Denying responsibility for the situation creates more hostility among clients. Keep in mind that the recognition of responsibility is a legal matter determined by the court, and make sure that the data you mention is accurate and clear and that the legal advisor has reviewed it.

 

The media executive provides a direct or recorded interview to answer all questions. One of the effective ways to deal with a crisis is by broadcasting live on television or the Internet to receive customer questions. It may also be necessary to appoint a public relations firm or consultant in the field of crisis management, and if the press coverage of the crisis is widespread, it is preferable that the company resort to purchasing ads via television or the Internet to help tackle the crisis.

 

The crisis can be dealt with in more detail and in more detail than a public statement, through a press statement prepared internally or by an external public relations company. A press release may also contain questions and answers, by anticipating what the public wants to know about the crisis. The Question and Answer method provides general information in short paragraphs of one or two times and is easy to read and understand.

Legal issues should be discussed with the lawyer. Lawyers may urge their clients not to make any statement to the media until the legal aspects of the crisis are fully studied and addressed. There may also be insurance issues to consider, as well as applied policies that lawyers should review. 

However, the non-suspension method may lead to an increase in the media investigation, to a negative general image, and if the crisis results in a lawsuit or criminal trial, the company's refusal to comment will negatively affect the jury's decision.

What do we expect in crises?

Even after the company issues statements or a general statement, the media continues to ask questions about what the statement addressed or that it did not address, and this may continue for days or weeks. 

The company should also expect customers to be angry and disappointed, these are natural reactions, and if the company behaves in a responsible manner, these emotions will eventually fade and be replaced by a renewed loyalty to the brand. For example, customers may appear in stores to demand a refund of the money they paid for defective goods, at which time the company must pursue a full prompt refund policy to restore its reputation among customers, and the additional reward of affected customers - such as a gift card or discount coupons - will rebuild customer confidence.

Public relations experts urge the company to be patient, continue its cooperation with the media and answer their questions fully, and also use the same approach when dealing with customer complaints. Formulating a new comprehensive guarantee for products or services will renew consumer confidence and help improve sales after a crisis. 

Once the crisis subsides, the company may consider a short advertising campaign in digital or traditional media to spread and promote its message, and it is beneficial to publish the ad on all available digital content channels as well.

The statement should include the following:

  • Company policy to fully refund or replace the affected product.

  • The steps are taken to prevent the problem from recurring.

  • New guarantees.

  • New incentives (free gift cards, discounts, etc.) to recover lost business.

  • Apologize for any inconvenience caused by the crisis.

The five stages of the crisis management system:

Al-Araji stated in his study of crisis management between (preventive and curative):

A survey study in Jordanian banks, the five stages of the crisis management system, namely: 

1. Detecting warning signals, which means diagnosing indicators and symptoms that predict a crisis.

2. Preparedness and prevention mean prior preparations to deal with the expected crisis in order to prevent its occurrence or reduce its effects.

3. Containment of damages, which means implementing what is planned in the stage of preparation, prevention and preventing the exacerbation and spread of the crisis. 

4. Restoration of the activity, which is the operations performed by the administrative apparatus for the purpose of restoring its balance and its ability to carry out its normal business as it was before.

5. Learning, which is the last stage, which is to develop and set controls to prevent a recurrence of the crisis and build experiences from previous lessons to ensure a high level of readiness in the future. Through the previous form, the vast difference between the proactive administration shows us the initiative that depends on planning before the occurrence of crises and the administration awaiting the crises to deal with the logic of the reaction like the Arab administrations. The absence of the two elements of the discovery of warning signs, readiness, and prevention is almost controlling the reality of organizations, as will be illustrated later through specialized studies.

 

Crisis management requirements

Crisis management researchers listed several requirements, including: 

Forming a crisis management team that, as El Hamalawy says, is a representation of the highest authority, because the crisis requires unconventional reactions that are constrained by time constraints and situation pressures.

This is the way the work teams, as the agent explained, is one of the most common and used methods for dealing with crises. It requires the presence of more than one expert, specialist, and technician in various fields, calculating each factor accurately and determining the required behavior quickly and consistently and not leaving matters to chance. 

It is worth noting that in a study of the algebra of crises: a comparative view between the Islamic model and the Japanese model, Jabr explained, “The Japanese concept in dealing with the crisis is based on the fact that the people closest to the crisis are the ablest to solve it or provide the appropriate solution to it, and therefore we see that most Japanese companies are moving towards decentralization in a process Decision-making. Japanese companies always prefer to use meetings as a means of resolving crises, and these types of meetings are called Japanese quality rings, which in turn are considered one of the tasks used in identifying crises and problems and how to analyze them. (96) Therefore, we see the importance of organizations adopting the process of decentralization when they form crisis management teams. 

Conclusion

A quick, honest, and full response to a crisis is the best way to control losses, maintain your customers ’trust and reduce your losses, which is often a must. If crisis management principles are implemented, they will ultimately recover sales, along with assuring credibility, restoring consumer confidence, and restoring the public image.

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