It would be best if you realized as a business owner that things do not always go as planned and that many obstacles are beyond your control. Therefore, it is critical to make efforts to ensure that you and your employees are not only able to survive but also grow during and after a crisis. In this piece, we will go over five different types of crises that your company might experience so you can be ready for anything and keep your business running smoothly.
5 Possible Business Disasters
Not all crises are the same, and you should handle not all crises in the same way. Let’s look at five potential crises that your company might encounter in the future, as well as tried-and-true methods for dealing with them as swiftly and effectively as possible:
1. Economic or Financial Crisis
A financial crisis, as the term implies, concerns money. Financial problems occur when a company becomes unable to pay its debts. A rapid drop in interest in a company’s products or services frequently brings on this type of crisis. Following the 9/11 attacks, Delta Airlines, for example, witnessed a significant decline in revenue. Delta had to declare bankruptcy in 2005 because people stopped booking flights.
How to Deal With the Situation:
First, reallocate firm funds to address short-term expenses. You will be able to take a breath because of this. Then you’ll need to look at your revenue streams and develop new strategies to make money and save costs. To sustain cash viability during an economic or financial crisis, consider diversifying your revenue streams through digital channels or partnerships, as this can provide a financial cushion and reduce dependency on a single income source.
2. Organizational Crisis
Organizational crises emerge when businesses purposefully mislead or deceive their clients. One of three things can cause this.
- Deception: When a firm intentionally lies and tampers with publicly available information, such as specifics about one of their products or services, they are committing fraud.
- Misconduct: When a firm participates in illegal acts to improve its financial situation, it is misconduct.
- Skewed Values: Short-term economic success is prioritized over societal progress, investors, customer experience, and corporate employees with skewed values.
How to Deal with the Situation:
It would be perfect to successfully adapt your company’s culture to deal with an organizational crisis. Why? Because, in general, these problems are the result of blatant disdain for clients. You can avoid many of these problems by cultivating a business culture that values and invests in client success. Start with the hiring process if you want to change your company’s culture. Bring on new team members only if they share your company’s ideals.
3. Technological Disaster
Most modern businesses rely on technology to function. As a result, technological crises; a crisis caused by a technical failure—are an ever-present hazard that your firm must be aware of and prepared for. It appears that technology companies face technological difficulties regularly. For example, both Google and Facebook properties experienced outages and were unavailable to consumers for short periods within three months of each other (December 2020 to March 2021).
How to Deal with the Situation:
First, resolve the problem! Then, determine what’s causing your technology to malfunction and fix it right now. When you’re back up and running, you’ll need to do two things at once: figure out why the tech failure happened so you can avoid it in the future and train your customer service personnel to deal with the influx of furious messages directed at your firm. Finally, depending on the severity of your technology disaster, consider making a public statement acknowledging the issue and apologizing for any trouble it may have caused. It’s crucial to note that online security is often an overlooked aspect that can lead to a technological disaster, putting both your data and reputation at risk.
4. Workplace Violence
When current or past employees act violently in the workplace, a workplace violence crisis occurs. Unfortunately, in 2017, one of the worst cases of this type of disaster occurred. A UPS driver in San Francisco brought a gun to work and began shooting his coworkers. Tragically, he shot himself after killing three individuals and injuring five more. Though the attacker was insulted, no clear motivation was ever uncovered.
How to Deal with the Situation:
Workplace problems are frequently the most serious since people’s lives are on the line. If your company ever encounters a crisis like this, do everything you can to de-escalate the situation before it becomes lethal. Simultaneously, notify local authorities as soon as possible and seek immediate medical assistance if injured.
5. Natural Disasters
What if an earthquake strikes your city, causing significant damage? Or a tornado wreaks havoc on your town? Or is it an infectious virus that has spread across the country? These may sound like Hollywood-esque events, but they happen occasionally. In 2005, Hurricane Katrina wreaked havoc on New Orleans, Louisiana, resulting in a monetary loss of 125 billion dollars. If you operated a business in the Big Easy during that time, the situation indeed altered your day-to-day routine. COVID-19, which recently swept the globe, forced numerous enterprises to shut down and implement remote work arrangements.
How to Deal with the Situation:
Preparedness is the most vigorous defense against natural disasters. So, get proactive and make sure your workplace has a good evacuation plan, work-from-home protocols, and data backups in place so that your business doesn’t come to a crashing halt.
