4 Stages of Crisis – How to Manage Them?

Did you know that, according to PWC, 69% of company leaders claimed to have experienced a crisis over five years? In today’s unpredictable world, a crisis isn’t a matter of ‘if’ but ‘when.’

This clear reality shows how important it is to manage crises. Crisis management is about responding to a situation and planning to reduce harm and ensure a fast recovery. Since crises are bound to happen, we need to prepare urgently.

Natural disasters, cyberattacks, economic downturns, and public relations problems are just a few ways crises could manifest themselves.

The potential impact of a crisis on a company’s operations, reputation, and finances, resulting in significant losses, underscores the need for effective crisis management. Understanding this potential impact should invoke a sense of responsibility in our crisis management efforts.

Navigating a crisis successfully requires more than just luck. It demands a robust crisis management strategy. This strategy offers a disciplined framework for seeing possible threats, preparing for several outcomes, and reacting quickly when a crisis strikes.

This article explores the four stages of crisis management—pre-crisis (prodromal phase), crisis (acute phase), response (chronic phase), and post-crisis (recovering phase). Understanding these phases and using strategic ideas at each stage can help companies improve their resilience and responsiveness in trying conditions.

The Four Stages of Crisis Management

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Let’s take a look at the four stages of crisis management in detail:

Stage 1: Pre-Crisis (Prodromal Phase)

The first stage of crisis, the pre-crisis stage—also called the prodromal phase—is critical for disaster readiness. It is characterized by the identification of possible risks and the development of preventive actions.

This phase entails proactive approaches to identify early warning signals and reduce vulnerabilities.

How to Manage the Pre-Crisis Stage

Effectively managing the pre crisis phase requires a strong sense of foresight and precise planning. These guidelines help control this phase:

• Comprehensive risk analyses help to find possible hazards and weaknesses. That means examining both internal and external elements that might cause a catastrophe.
• Create a robust crisis management strategy, including roles, obligations, and practices. That should involve a comprehensive risk assessment, clear communication plans, and regular training and drills. Regular updates, simulations, and drills should test this approach.
• Install systems to identify early warning signals of a crisis. That can include internal audits and social media monitoring.
• Employees should be trained on crisis management techniques and guaranteed to be familiar with the four phases of a crisis. Frequent training courses help ensure that the crew is attentive and ready.
• Invest in a bespoke business insurance policy that specifically covers the types of crises your company is most likely to face. This will provide adequate protection against unexpected events and help alleviate pressures when responding to ongoing crises.

Expert tip from Sergio Burret, CMO of VeePN:

“Plan and identify possible scenarios to make a business case about which to prioritize for crisis preparation. Red flags/triggers in the external environment can be a valuable source of this information.”

Approach: Demonstrate Your Preparedness

Being ready does not just mean having strategies in place but also making sure everyone in the company knows their part in those strategies. Regular drills, open lines of contact, and prominent leadership participation are crucial to demonstrating readiness.

For instance, during drills, ensure that all team members understand their roles and responsibilities and provide feedback on their performance to encourage improvement.

Stage 2: Crisis (Acute Phase)

When a crisis strikes and the company is actively handling it, it is in the Crisis stage—also known as the Acute stage. This is the moment when the crisis develops. This phase requires a quick response to help control the situation and minimize damage.

How to Manage the Crisis Stage

Effective crisis management is primarily about fast decisions and controlling the circumstances. Here are some essential aspects of this stage :

• A crisis management plan should be immediately activated. Make sure to have a crisis management team and that every team member understands their obligations.
• Create a crisis communication plan to let everyone involved know what’s happening. That covers staff, clients, reporters, and partners. Maintaining faith depends on transparency.
• Put policies in place to help contain the issue and prevent further escalation. That could involve public announcements or physical actions, including closing down impacted systems.

Expert tip from Mark Anderson, Founder of Anderson Injury Lawyers:

“Keep everyone informed and show that you understand their concerns. If there’s anything you haven’t explained yet, be honest and let them know you’re doing everything you can to find out what’s going on.”

Approach: Alert Your Employees

Quick and effective alerting of staff guarantees that everyone agrees and can act in concert. Make sure everyone receives the word using several channels and receives clear directions on what to do.

Stage 3: Response (Chronic Phase)

An effective response to a crisis includes managing its continuous consequences and striving for stabilization. This stage is known as the Chronic phase. To solve the underlying causes and stop recurrence, this phase might be extended and require constant effort.

The need for continuous effort in the response stage should not just be acknowledged, but it should make us realize the importance of perseverance in crisis management.

How to Manage the Response Stage

Good crisis response concentrates on rebuilding and recovery. Crucial actions include:

• Attend to current problems and prevent further damage. As circumstances change, this entails constant evaluation and strategic change.
• Maintain open contact lines with key stakeholders and communicate urgent information immediately. That is essential for their engagement and can help manage their expectations. Provide regular updates on the matter and the actions being taken to control it.
• Create a crisis response team that will be in charge of sharing the business response to the crisis.
• Allocate the required tools to control the crisis properly. These can include workforce, money, and outside knowledge.

Expert tip from Ben Ajenoui, Founder of SEO HERO:

“If you are facing a crisis, first, calm down, take a walk, and breathe. Then, analyze what went wrong. If it was your mistake, be honest about it. Learn how to prevent it from happening again and share it with the team. Present a plan to reduce the chances of a similar crisis.”

Approach: Communicate and Update

Maintaining confidence and openness during the Response phase depends on constant communication and regular updates. Give interested parties clear information on the actions and advancements achieved.

Stage 4: Post-Crisis (Recovery Phase)

Evaluating the reaction to the crisis, learning from the event, and applying improvements to enhance future crisis management define the Post-Crisis or resolution phase.

How to Manage the Post-Crisis Stage

Managing the Post-Crisis stage is about introspection and development. This stage helps you prepare for similar occurrences in the future and be better prepared to handle them.

• Review and analyze the crisis reaction in great detail. List what could be strengthened and what was performed effectively. That should call for comments from every involved party.
• Document the crisis-management process, including suggestions for future development and lessons learned. This material will help you build a more robust crisis management structure.
• Based on the review, change crisis management strategies and plans in policy and planning terms. Make sure the company is better suited for future crises.

Expert tip from Marc L. Sapiro, founder of The Law Offices of Marc L. Shapiro:

“As you transition back to normal business operations, it’s crucial to utilize the post-crisis period to seek opportunities for improved preparation for future crises. Reviewing your insurance claims process, both first-party and third-party, can be a vital part of this assessment. Now is the moment to honor the promises made during the crisis phase and appraise the overall business handling of the crisis.“

Approach: Assess and Evaluate

Learning from the crisis and enhancing future readiness depends on assessment and evaluation. Invite every involved party to participate in the assessment process to obtain different points of view and analysis.

It’s typical for confusion and misinformation to arise during a crisis. However, a well-defined, preemptive crisis management strategy can effectively reduce the likelihood of rumors or unfounded information gaining traction and guarantee that your staff constantly has access to the most up-to-date, precise information.

Utilizing multi-channel bidirectional communication solutions empowers employees to communicate updates, a crucial component of your response. This instantaneous exchange of information ensures that your team feels supported and well-informed as they handle a crisis while offering you valuable, firsthand information.

By reviewing the crisis, employees will be able to gather insights that help them be more prepared for the next crisis and correct previous holes in their crisis plan.

Bottom Line

Crisis management is a dynamic and continuous process that requires companies to be proactive, responsive, and thoughtful. By knowing and controlling the four stages of crisis management, organizations can increase their resilience and capacity to negotiate difficult times.

Understanding and controlling the four stages of crisis management helps companies reduce risks, handle crises properly, and bounce back from them more quickly. The foundations of a robust crisis management plan are preparedness, quick response, steady recovery, and ongoing development.

If you want to prevent crises from happening, check how Mention can help!