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Crisis is like an uninvited guest. It comes calling when you least

expect it and is usually the source of a major headache. For a

company, the first reaction on encountering a crisis is panic. If

not dealt with appropriately, a crisis can seriously damage a

companys image in the eyes of the public, an image usually

nurtured over several years. However, a well thought out crisiscommunication plan can help reduce the effects of a negative

situation.

The first and most basic step in creating a sound crisis

communication plan, is to take into account every possible

scenario which could lead to a problem, internally or externally.

Can any of your products be contaminated or adulterated? Could

any of your employees have an issue with the company? Can a

shop floor worker have a potentially life threatening accident

during the manufacturing process?

Every scenario, no matter how small, can explode into apotentially damaging situation for the company. It is important to

share these probable situations with your communication

advisors to enable them to adequately plan for the same. It is also

important to identify and train a spokesperson to speak to the

media in case of a crisis. Confidence must be reflected in all that

the company says and does. Crisis or no crisis, its business as

usual.

Try and plan ahead. To cite an example, when Reliance was

building its refinery at Jamnagar, the company ensured that the

facility could withstand an earthquake of the intensity of 9 on theRichter Scale. The foresight paid off, as the refinery survived a

quake measuring 7 on the Richter Scale.

Another way of looking at a crisis is to view it as an opportunity to learn and do better in future.

After the worm contamination incident, Cadbury changed the packaging of its chocolate slabs to

incorporate stronger, insect proof foil. This proactive method of handling a crisis paid off and the

company emerged stronger from the situation. After all, the Chinese character for both crisis and

opportunity is one and the same

Define

A crisis is defined by the dictionary as a 'critical moment or turning point.' A business book, on the otherhand, might define a crisis as a substantial, unforeseen circumstance that can potentially jeopardize acompany's employees, customers, products, services, fiscal situation, or reputation. Both definitionscontain an element of urgency that requires immediate decisions and actions from people involved.

Crisis Management is the process of preparing for and responding to an unpredictable negative event toprevent it from escalating into an even bigger problem, or worse, exploding into a full-blown, widespread,

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life-threatening disaster. Crisis management involves the execution of well-coordinated actions to controlthe damage and preserve or restore public confidence in the system under crisis.

In the context of corporate governance, excellent crisis management is a 'must' whenever a crisis occursbecause of the crisis' enormous potential impact on the company's reputation and financial standing.Poor handling of a crisis situation can ruin the confidence of the customers or the public in a companyand jeopardize its survival, a situation that normally takes a long time to correct, if it still is reparable atall. Such is the importance of public perception of a company's handling of a crisis situation thatmediacoverage management has become an important ingredient of crisis management.

In fact, the definition given by the American Institute for Crisis Management (ICM) for the word 'crisis'underscores the association of a crisis with media coverage by default. ICM defines 'crisis' as "asignificant business disruption which stimulates extensive news media coverage. The resultingpublicscrutinywill affect the organization's normal operations and also could have a political, legal, financial,and governmental impact on its business."

Crisis management doesn't start only when a crisis arises and ends when 'the last fire has been put out'.Crisis management requires actions before a crisis happens, while the crisis is unfolding, and after thecrisis has ended. In fact, crisis management is divided into these three stages: 1) pre-incident stage,which involves identification of potential crisis situations and developing contingency plans for responding

to each of them; 2)incident stage, which involves management of an ongoing actual crisis situation itself;and 3) post-incident stage, which includes corrective and preventive actions to preclude the recurrence ofthe same crisis situation and business recovery actions to restore public confidence in the brand or thecompany.

There are many different ideas or theories on how to best manage a crisis situation. These differingideas, nonetheless, have some common elements: 1) the need to anticipate potential crisis situationsand prepare for them; 2) the need to provide accurate information during a crisis; 3) the need to react asquickly as possible to the situation; 4) the need for a response that comes from the top; and 5) the needfor long-term solutions.