Before the outbreak of Covid-19, business leaders focused on innovation, driving revenue, and increasing market share. Post-pandemic, things have drastically changed.
Today, those leaders have to make decisions about controlling costs, liquidity, and, most importantly, business survival. After all, team shortages, supply chain issues, and operational discrepancies have put companies in a crisis. In addition to this, teams are navigating health concerns, working from home, and supporting their families through the pandemic.
Is this an easy transition? Of course, not. In the last two years, businesses worldwide have drowned in losses due to a lack of consumer demand. Those competing in the market have little market share, making future survival difficult. Now, the question is how to manage this crisis? Most entrepreneurs inject more money into the business, but it doesn’t help without operational changes.
Therefore, you have to focus on the bigger picture and plan. First, communicate to your team members, address their concerns, and propose ways to plan to manage the crisis. Likewise, train your employees and implement cost-cutting strategies. To help you out further, here are five crisis management tactics to survive today’s business environment.
- Address the Media
The news travels pretty fast. The minute company’s share prices fluctuate, the media will start eyeing your moves. The media spokesperson will try to talk to the firm’s CEO or PR manager, asking for explanations. It’s impossible to have answers to all their questions, but you must address the media. You have to prepare crisis communication strategies and a management team. Except for the designated people, no one should be in contact with the media.
Leaders can share all internal communication with the crisis team. It will ensure that the company speaks with a single consistent voice. Besides this, the CEO can also offer the media a real-time recorded interview, answering all their questions. However, if there are any technical aspects, you must hire an expert in that field to interact with the media.
- Train Stakeholders
Is your team trained to manage a crisis? Most organizations offer one-size-fits-all training sessions, but those are unlikely to work. Leaders have to understand that the role of senior management differs from that of operations and human resources. Thus, ensure crisis management training is tailored for every stakeholder. For managers, make them aware of the situation and teach them the importance of worker productivity. After all, decreasing efficiency levels are the last thing you want in a crisis.
Moreover, you can have breakout sessions that go through each group’s responsibilities. Perhaps, you can have role-play sessions with different situations to see how employees will react. For instance, you can create a situation where another company takes over the business. You can see how different business functions react and what steps they take. It will allow you to identify gaps and ensure a crisis-response success.
- Cut-Back on Costs
As a crisis can disrupt production and profitability, your utmost priority is cutting costs. It doesn’t mean you have to slash all your expenses and outflows. Cutting too many costs at once can leave your business to opportunistic competitors. Hence, you have to take a more strategic approach. For that, begin by reviewing and revising short-term budgets. You can also run a revised break-even analysis based on current data to plan for contingencies.
It would allow you to adjust the budget based on the anticipated expenses. Second, shift your focus to cash flow by redefining the payroll. You can offer employees to work from home to reduce travel and rent expenses. Likewise, curtail hiring to the absolute minimum to eliminate additional costs.
- Support Your Customers
Entrepreneurs must expect their customers to be angry and disappointed in a crisis. After all, these are natural reactions. If a company acts responsibly, these emotions will fade away with time, renewed with loyalty to the brand. Therefore, offer endless support to your customer.
Whenever a client appears in the store asking for refunds because of faulty goods, cater to their demands. You have to initiate a full refund or replacement policy to restore your goodwill among the customers. Avoid giving excuses as it will escalate the problem. Instead, offer them an additional bonus such as a gift card to apologize for the inconvenience. It would help rebuild customer loyalty, protecting your market share in the industry.
- Adopt Fiercely
Sometimes, the only way to manage a crisis is by getting ahead of changing circumstances. Instead of going by the book, leaders have to take new initiatives. Managers must understand that the actions that earlier drove results may not be relevant in today’s environment. Thus, learn to adjust and cultivate new plans of survival. If your supervisors are unable to manage workflows, automate them. You can deploy task or project management tools where the managers will monitor performance remotely.
Moreover, strengthen direct connections to the front line. Perhaps, you can create a network of local leaders and influencers who can speak with deep knowledge about the impact of a crisis. It will capture innovations, solutions, and best practices, helping you emerge stronger after a crisis.
Final Thoughts
In a crisis, leaders must juggle ever-changing priorities with limited time to react. Some put up the company for sale as they can’t see a way out; others hire external consultants. While managing a crisis is super challenging, it is not impossible. Leaders have to open themselves to change, support their customers, and train the stakeholders. Likewise, they have to communicate effectively to win media and audiences’ trust.
