By: Lucy Adams

Have you heard of crisis management? You must have heard of it unless your company has never survived harsh times.

Well, sooner or later, you’ll inevitably run into a crisis. That’s the nature of business, and you can’t change it! The point is to know how to reduce the consequences of the crisis to a minimum and establish a new system of management under the tough market conditions. Let’s take a fresh look at the problem along with Lucy Adams, a blogger from

Crisis management is the process of transforming a loss-making company into a profitable one by reorganizing the style of leadership, finance management, and production process.  The fundamental difference of crisis management is that it is about a fast response to a crisis (in contrast, usual management is aimed at sales increase).

Crisis management solves the next problems:

  • Stagnation.
  • Drawbacks in the hierarchy of organizational management.
  • Mistakes in the business model.
  • Mistakes in the corporate culture.

Once you stabilize the situation, establish a new strategy to prevent the onset of a new crisis.

By the way, the company need not necessarily have serious financial difficulties for crisis management to work successfully. It can help you in choosing a correct organizational process and eliminating its mistakes, as well as in increasing the effectiveness of production process and coping with the fast-growing start-up.

Crisis Management: Seven Steps

#1 Stabilize the Crisis

Many companies begin to think about crisis management when they have problems with wages, rent or other expenses. Regardless of the kind of crisis, the first step is to stabilize the situation.

  1. Make sure that all your expenses are approved be the anti-crisis team.
  2. Stop all discretionary projects and make sure that you control the costs of your organization.
  3. Develop a strategy for obtaining short-term profits. Conduct brainstorm together with your team and find all possible ways of income.
  4. Identify direct threats to your company. If there are too many of them, focus on the most serious.

#2 Establish New Leadership

Poor leadership is often the main cause of the crisis. By firing leaders, you show the team that things are really bad. That’s why you should carefully examine the current team of managers before taking the final decision. Don’t fire everyone at once. Although you have little time, stay wise.

Who of the managers copes best with the current tasks? Who works well under stress? Who’s able to take the responsibility? Try to be fair with yourself and your employees.

#3 Reconsider the Relationships with Stakeholders

Start with identifying the key stakeholders. Set up a relationship with them and come to an agreement about the direction of development of the company.

Don’t make your plans private. Everyone should understand what happened and what changes await the company. At this stage, trust is more important than ever.

#4 Focus on the Strategy

Analyze the organizational strategy and determine what is going wrong. Review the current plan and amend it! Now it’s clear that it doesn’t work as it is! On the other side, that doesn’t mean you should change it dramatically. Again, stay wise!

There are several reasons for reviewing the strategy:

  • A change in conditions (working, business, etc.).
  • A change in technologies.
  • Unqualified personnel (some of your employees don’t fit their positions).
  • Old methods, algorithms, and ideas no longer work.

In times of severe crisis, the strategy should be extremely simple and not requiring a lot of money for its implementing.

#5 Improve

You’ve come to the 5th step, which means you already know what to do. It’s high time to come up with how to do what you’re going to do. Some of the most important organizational processes may be damaged or even broken (for example, customers wait for too long for the delivery or support service is too slow).

Here brainstorming may help you. Gather the team and let each member speak out.

#6 Introduce Organizational Changes

Each organization has a structure, corporate culture, and people. At harsh times, these elements often conflict with each other. For example, some managers will resist changes while others won’t want to improve their skills to meet new requirements.

You need to start with people. Explain to them that there is no other way out and offer training. Be honest and admit that there will be a lot of work to do! Form a new culture and change the structure in such a way that your employees can harmoniously coexist with each other.

#7 Introduce Change in the Financial Structure

You’ve already found ways to get short-term profit at the stage #1. Now it’s time to get out of the crisis and start investing in long-term projects! Increasing the budget will give you many opportunities, but spend this money wisely and avoid serious risks at first.

May the force be with you!


Lucy Adams is a blogger and essay writer from a young bet very perspective platform for essay writing. Lucy easily covers topics from different niches, including marketing, business, and advertising. Feel free to share your ideas and start a mutually beneficial cooperation with this aspiring writer! By the way, guest blogs by Lucy are free-of-charge!