A Practical Guide to Establishing an Effective Crisis Management Plan


Irrespective of the size of a company, whether for-profit or non-profit, being able to respond to crisis situations quickly and effectively is important. Indeed, the welfare of an organization’s employees and protection of its business, including its reputation or brand may be paramount considerations in any crisis situation. Unfortunately, many companies are ill-prepared to respond to crisis situations, either because they refuse to believe that certain crisis situations will occur or they conclude that designing and maintaining an effective crisis management plan is prohibitively expensive, or both. In my experience, otherwise smart business people often are unwilling to think the unthinkable and thus see no need to plan for significant unusual events. Granted, obsessing over the unknown can be counter-productive and no business wants to spend money or time planning for something that will “never” happen. Ignoring the realistic potential for crisis situations, however, can lead to a serious lack of preparation, which can result in otherwise avoidable problems.

The fact is that crisis situations do occur. They can have a lead time; for example, a hurricane warning that anticipates the arrival of a storm. Or, they can occur suddenly without warning, such as an earth-quake, an accident involving the company’s product that involves serious injury or property damage, or an unannounced major government investigation. And they take all shapes and sizes, including legal, natural disasters that affect employees or operations or both, products related incidents that involve serious injury or fatalities, a sudden government investigation, workplace violence, international travel incidents involving employees, unwanted media scrutiny, and the prospect of an epidemic or pandemic such as SARS or the Avian Flu. Moreover, crisis situations are not confined to large, multi-national companies. They can impact even small businesses that are generally less capable of coping with the situation and less able to suffer the adverse consequences. Finally, by their very nature, crisis situations require a prompt response or action or both to eliminate or, more likely, minimize the adverse consequences. Attempting to execute a response strategy “on the fly” is generally a recipe for disaster, especially if there is not even a basic crisis management plan or process in place.

Originally published in In-House Defense Quarterly ¦ Winter 2014.

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Topics:  Chief Compliance Officers, Corporate Counsel, Corporate Governance, Crisis Management, Risk Management

Published In: General Business Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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