Crisis, issue, risk – are the words interchangeable? We answer that question “no” – managing a crisis and managing an issue require very different approaches.
It’s important to understand the difference and manage each one accordingly. Poorly managed issues can become crises, and poorly managed crises lead to long-term damage to a business’ bottom line.
Some of the key differences include:
Impact – a situation or event is usually a crisis if it threatens lives, the environment or the organisation’s reputation. While an issue can have impact, it is usually not critical.
Urgency – if you are under immediate pressure to make decisions and resolve a problem, that is a sign of crisis. Issues management usually involves time to assess all avenues and make considered decisions, however in a crisis the best decision can be the one you should have made minutes ago.
Time – while an issue can span weeks, months and even years, crises generally have a clear start and end. Issues management involves a sustained effort of activity and monitoring over time, whereas crisis management is an immediate response.
Not “business as usual” – responding to a crisis requires people to stop their usual business activity and put their full focus towards resolving the situation. This is unlike an issue, which can be managed as part of “business as usual” operations.
Icon Reputation’s e-book, Surviving Crisis, summarises a crisis as “[stopping] an organisation operating effectively. If it’s in the public arena, attracting the attention of regulators, government or the media and involves harm to people, the environment or your brand, bottom line, it’s a crisis.”
While some online sources define a crisis as being an “unanticipated event”, from our experience this is rarely the case.
Colonial Brewing Co has come under fire in the current climate for its insensitive name that glorifies a time when indigenous people were killed en masse and their cultures destroyed.
Some might say the local, family-owned craft brewer could not have anticipated a global movement against racism and police brutality towards black people. However, there were numerous issues bubbling in the background, including three years of campaigning from a freelance journalist and concerns over the name previously raised from a stockist.
The Black Lives Matter movement was a tipping point for the issues becoming a crisis, which has now impacted their bottom line after being dumped by a liquor chain in Melbourne.
How the company responds will determine whether the crisis escalates and if permanent brand damage is done.
Often a crisis will arise from multiple, smaller issues compounding. If you take the analogy of a ship, one leak (i.e. an issue) will not make it sink. However, if multiple other leaks appear and are not fixed, the ship will likely sink (i.e. a crisis).
For Colonial Brewing Co, the Black Lives Matter movement was the last leak their ship could endure before having to confront the crisis.
At times there are unanticipated circumstances that create a crisis, such as a natural disaster or freak accident. Still, the plans and policies in place – or lack thereof – can determine how much impact a crisis has and the capacity to recover.
A fire may start unexpectedly near your premises; did you have a fire safety plan in which employees were trained? Were there fire safety wardens designated in your teams? Was your database stored somewhere accessible? Was a holding statement prepared so you could communicate quickly? This type of planning can limit the impact of a crisis when one occurs to operational issues, rather than reputational factors.
Without a crisis plan, you are on a ship with no lifeboat.
By Amanda Cirillo, Senior Account Manager