What is a crisis management plan? (6 steps to create one)

Picture this: you’re hyping up your employees for the annual company retreat. You can’t wait for everyone to bond over games and team-building activities. The event starts tomorrow and you want every detail of the weekend to run smoothly. 

The majority of the activities will be held outdoors, so when thunderstorms suddenly hit town, you panic! You were so focused on planning the event that you didn’t consider a backup plan for bad weather. Changing things last minute will result in thousands of dollars lost. 

What’s the lesson? Being a good leader requires more than positivity and solid communication skills. Knowing how to plan for both the good times and bad builds trust with your team and shows preparedness.

Crisis management is an essential part of any business plan because without it, your team won’t be prepared when the unexpected happens. In the guide below, we’ll discuss what a crisis management plan is and how to prepare your company for uncertain times.

What is a crisis management plan?

A crisis management plan outlines how your business will react if a crisis occurs. The plan should identify who will take action and what their roles will be. The goal of a crisis management plan is to minimize damage and restore business operations as quickly as possible.

Your crisis management plan is a living document your team can refer to and update frequently. There are various ways to outline your plan, but a typical crisis plan looks like a checklist. When mishaps occur, your team can check off what items need to be done to respond to the crisis.

There’s no way to know what type of crisis may occur and when, but performing a risk analysis can give you a generalized idea of the potential threats your company may face. 

For example, a social media marketing company may be more at-risk for an organizational mishap that requires a public apology, while a tech company may be more at risk for a cyberattack. The industry you’re in can also help you determine potential crises and figure out how to combat them. 

6 steps to create a crisis management plan

To efficiently and effectively create a crisis management plan, break it up into smaller, more attainable steps. This can help you identify likely risks without getting overwhelmed by the potential crisis as a whole. To organize your plan, use a crisis management template with the following six steps:

1. Identify your crisis leadership team

Before you can take the first step in crisis management planning, choose a team of leaders to collaborate with during the crisis planning process. Your team should include the people who will take action during a crisis. Put this team together at the very beginning of crisis management planning so everyone knows the ins and outs of your crisis strategy. 

2. Assess risk

To begin the planning process, have a brainstorming session to assess various risks your company may face. As mentioned above, you can kick off your brainstorming session by looking at risks associated with your job field. 

Use a risk register to identify and analyze the probability of risks occurring. A risk register can eliminate progress delays and prepare for potential setbacks. It can also help you visualize which risks are most likely to occur so you can plan a response for these risks. 

3. Determine the business impact

Once you’ve identified the high-probability risks that could affect your company, determine the business impact of these risks with the help of your crisis leadership team. Each risk can cause different outcomes, so it’s important to analyze them separately. Potential business impacts may include customer attrition, damaged reputation, delayed sales, lost income, or regulatory fines. 

4. Plan the response

Next, take each risk you’ve identified and determine what actions your team would need to take to respond to the threat if it does happen. For example, if you work in software and your company experiences a cyberattack, you may need someone to secure the network, someone to release the news to your customers, and another person to handle damage assessment.

5. Solidify the plan

Once you’ve verbally made sense of the threats your company may face, the business impact, and how to respond, solidify your plan. A crisis management plan is more than a written or verbal strategy. It should include key items such as an activation protocol and emergency contacts, which we’ll discuss in more detail below. You’ll also need to collaborate with key stakeholders so that everyone understands what to do and when.

6. Review and update

Once your crisis plan is complete, review the final product to ensure there are no gaps. Revisit your crisis management plan and update it at least once a year because potential risks can change with time.

What to include in a crisis management plan

Your crisis management plan should include the items below. As you create your crisis management plan, use this checklist to ensure you haven’t overlooked the important details. 

Risk analysis

A risk analysis will physically outline the potential risks your company may face and put them in order of probability. Including risk management in your emergency response plan is helpful because new leaders can refer to it if management shifts. 

Activation protocol

The activation protocol determines when action should be taken if a crisis occurs. For example, you may decide that your team members should hold off on taking action until a crisis reaches a certain level of business impact. Once that business impact occurs, it triggers the crisis management team to respond. 

Emergency contacts

Include the main emergency contact information to speed up the response process for crises that require external help. Your emergency contact list may include local law enforcement, hospital first responders, and the fire department as well as plumbing services, electricians, poison control, and any other services related to the risks you’ve identified in your analysis. 

Response procedures

While an activation protocol defines exactly when your crisis response team should respond to a crisis, the response procedures outline the action plans for each person when triggered. Use a roles and responsibilities matrix, also known as a RACI chart, to clarify the decision-making positions in your crisis response plan. For example, a RACI chart can help the response team determine who’s accountable for communicating with the public and who’s responsible for talking to employees. 

External crisis communication strategy

When a crisis occurs, your internal operations may not be the only things impacted. Once a crisis is widespread enough, you’ll need to explain the situation to key external stakeholders and the public. Your external crisis communication strategy should include details about who will deliver the information as well as who’s in charge of handling feedback. 

Post-crisis assessment

A post-crisis assessment reminds your team to follow up and assess what went well and what didn’t. You can then update your crisis plan with lessons learned to improve your response procedures and reduce business impact. 

Crisis management plan examples

Although there’s no way to predict every crisis, you can generalize types of crises into categories and make plans based on what may happen. Some crisis management examples include:

• Financial loss: When your company suffers from a financial loss, you may have to announce bankruptcy or lay off employees. You can plan for this scenario without knowing the initial cause of the financial crisis. 

• Technological failure: A technology mishap could leave your customers without access for an extended period of time. This type of crisis affects your reputation and your bottom line, so it’s important to prepare for this situation. 

• Natural disaster: You can prepare for some natural disasters based on where you’re located. For example, if your company is in the southeastern United States, you can create a crisis plan for hurricanes that involves evacuations, customer communication, disaster recovery, and more. 

• Operational changes: While it may not seem like a traditional crisis, you should have a plan in place to prepare for an unexpected major shift in leadership. Additionally, your operations process may be affected if you have to lay off a lot of employees, and the public may need to know. 

• Organizational mishap: There’s always the chance that your company will be accused of misconduct or wrongdoing, and in this crisis situation, you’ll need a plan for how to respond. This crisis plan may involve issuing a public apology and figuring out how to recover.

Why do you need a crisis management plan?

A crisis management plan  prepares your organization for a disaster or unforeseen event. With a plan in place, you can lessen the impact of the crisis on your employees and your business operations. When the team is properly trained for the unexpected, there’s less chance of long-term damage. 

If you’re the leader of an organization, it’s up to you to work with other members of senior management and come up with the emergency management strategy that works for you. You may not know where to start at first, but project planning software can help you navigate this uncharted territory. 

A well-organized crisis management plan could help your company recover after a disaster occurs. 

Prepare your team with crisis management

When you have the right tools at your disposal, it’s easy to create a crisis management plan. Use project planning to structure your action plan like its own project, with team roles, an activation protocol, response procedures, and more. 

Making your crisis plan easy to understand and accessible to everyone in your company can increase preparedness and help with recovery in the event of a crisis.