🚨 Crisis Management
Definition: A crisis is an unexpected event that threatens the business''s operations, reputation or survival.
Types of crisis
- Natural disasters (earthquakes, floods, pandemics)
- Product failures or recalls
- Data breaches and cyberattacks
- Financial crises (cash flow collapse, fraud)
- Reputational crises (scandals, social media backlash)
- Supply chain disruptions
Contingency planning
- Contingency plan = a pre-prepared plan for dealing with a specific crisis
- Identifies potential risks and prepares responses in advance
- Includes communication plans, backup suppliers, insurance, data backups
- Reduces panic and speeds up response when a crisis hits
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📢 Responding to a Crisis
- Act quickly — delays make crises worse
- Communicate transparently — honest, regular updates to stakeholders
- Take responsibility — accept blame if appropriate
- Protect people first — employee and customer safety above profits
- Learn from it — review what happened and update contingency plans
Johnson and Johnson''s response to the 1982 Tylenol tampering crisis is a textbook example: they immediately recalled all products, communicated openly, and introduced tamper-proof packaging.