By | Anjan Pathak | www.allbusiness.com
For any aspiring leader, going through a crisis is a rite of passage. After all, it’s easy to be a good manager when everything is going well, but your ability as a leader is truly tested when there is a true crisis.
While crisis management may be near the top of a manager’s priority list, it is one of the trickiest areas to navigate. Thus, it’s not surprising that crisis preparation for a company can cost anywhere from $60,000 to $500,000 (depending on the industry and location). In comparison, unprepared companies in a crisis can spend close to millions of dollars on mitigation while at the same time losing hundreds of millions in reputation and shareholder value.
The real issue with crisis management is that it is incredibly unpredictable. You never know when or what kind of crisis will strike. Consider the Covid-19 pandemic. If someone had told us in 2019 that the world would be in a two-year lockdown with a complete shift to a remote world, we would have dismissed it as a massive hoax.
Meanwhile, a Spiceworks survey found that while 95% of organizations have a crisis recovery plan in place, 23% never really end up testing the effectiveness of that plan. And of those who don’t test their plans, 61% say it’s due to a lack of time, while 53% say it’s due to inadequate resources.
So, it’s safe to say that most leaders are not only mentally unprepared to deal with a sudden crisis, but they are also unsure of how to manage their workforce in a high-risk situation.