Why The Age And Size Of Companies Matter When Preparing Crisis Plans

Customizing crisis management plans to reflect the age and size of businesses can help ensure the effectiveness and relevancy of those plans.

Organizations that think generic off-the-shelf crisis plans are all they will need to navigate a crisis can be sorely tested when the unexpected happens. As they scramble to figure out how to respond to the crisis, the risks to their image, reputation and bottom line can increase by the minute.

Agility

“At General Electric, where I started and grew my career, public issues were inevitable due to the scale and exposure of the business. We had a system in place which allowed us to quickly evaluate risk, activate a process, align stakeholders and take predefined actions,” Jon Bostock, president and CEO of Leaf Home, a home products and services company, said via email.

“This type of business decision-making matrix doesn’t exist within most smaller businesses, primarily because the organizations don’t have the need, haven’t developed the discipline or don’t have the capabilities,” he noted.

“For leaders at less mature organizations, it’s critical to identify the types of crises they could face and then develop the framework by which risk will be assessed,” Bostock concluded.

Reputation

“Does the age of a company come into play? Absolutely. Young companies tend to think with the bravado of a 16-year-old with a new driver’s license. They believe nothing can go wrong,” Susan Stoga, principal at Carson Stoga Communications, said via email.

“Often, crisis plans are on the to-do list but not on the priority list. Instead, young company leaders would be best served by seeing a crisis plan as insurance or risk management against the reputation of the company or brand.

Risks

“The most efficient way for a young company to prepare its crisis plan is to consider all the potential risks they may [encounter]… and evaluate every potential issue against its own risk criteria. Doing so will allow the company to be prepared to act and usually resolve potential crises before damage occurs,” Stoga advised.

Priorities

“For newer, smaller businesses, crisis management plans should prioritize agility and speed, leveraging their flexible structure for rapid decision-making and quick course corrections,” Lisa McStay, chief operating officer at Continuity2, a business continuity and resilience company, said via email.

“Large, older businesses should focus on comprehensive risk assessment and clear communication channels within their complex structures, ensuring robustness and efficiency in their crisis responses,” she counseled.

Guidelines

“To effectively manage crises in larger companies, it’s important to establish clear guidelines regarding decision-making processes,” Avigail Lev, founder and director of Bay Area CBT Center, said via email.

“Identifying who has the authority to make ultimate decisions and defining the hierarchy of responsibility can streamline the decision-making process and ensure swift actions when needed,” she advised.

Getting It Right

“Get the design of your crisis management plan right, and it will ensure a purposeful, well-organized way of working and provide critical resources enabling you to get on top of a situation quickly, whatever your company’s size, age or sector,” Jonathan Hemus, managing director and crisis management consultant at Insignia, observed via email.