Crisis management tools and methods are used for various purposes and reasons, for instance:

· Crisis management tools and methods are utilized to respond to both the reality and perception crisis

· Key performance indicators and metrics are used and implemented to define that scenarios constitute a crisis and should consequently activate the necessary response mechanisms

· Communication that takes place within the response phase of emergency management scenarios

Crisis management tools and methods of a business organization or industry are called as “Crisis Management Plan”. Crisis management is called as incident management, though several corporate industry experts, for example, Peter Power suggested that crisis management is more accurate.

What Exactly Is Crisis Management All About?

“Crisis management is the process and course of action by which a business entity negotiates with a major unpredictable disaster that threatens to harm the entire business organization, its investors and stakeholders, and the general public. Generally, a crisis has three major components: a threat to the business entity, the element of surprise, and a short decision time”.

Types of Crisis

There are plenteous forms of crisis such as:

1. Natural disasters

2. Malevolence

3. Technical breakdowns

4. Human breakdowns

5. Challenges

6. Megadamage

7. Organizational misdeeds

8. Workplace violence

9. Rumors

The Role of an Effective Crisis Management Team

The crisis management team is accountable for controlling the event from a project point of view and covers the following major activities:

1. Supporting workers and their relatives during the crisis
2. Measuring and determining the event’s impact on standard business operations and, if obligatory, making a disaster affirmation
3. Keeping the community people informed and updated about the disaster and the actions being taken to make sure the recovery of recruits and the venture
4. Negotiating and dealing with major clientele, contractors, associates, authoritarian agencies, corporate industries, media, and other concerned parties

An emergency response/damage assessment and measurement team should be composed of onsite personnel working with the following entities:

1. Local law enforcement and other officials (e.g., fire and police)
2. Utilities (e.g., gas, electricity and telephone)
3. Facilities management

A command center has got to be established from which the event can be managed (until a catastrophe is on the record affirmed or reentry to the expected facility is possible). Enterprises must mull over establishing a ‘virtual’ command center to limit the vulnerability caused by all senior managers and personnel being in one location.

An effective crisis management squad must have participation from:

1. Senior management from each business unit
2. Human resources
3. Facilities/building management
4. Risk management (operational, financial and IT)
5. Legal/compliance
6. Communications/public relations
7. Chief information officer/chief technology officer
8. Business continuity manager

Final word

In short, an effective crisis management team is responsible for managing the unpredictable event with careful planning, organization, and implementation. Further, crisis management team can use metrics, and key performance indicators, as well as crisis management scorecard for an effective crisis management.

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Related KPIs: Mergers and Acquisitions, Data Loss, Crisis Management Companies

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Description by authors:

Crisis is an event that means ‘emergency event’. It can occur in any type of organization, be it government or private, and can create problems for the entity. Crisis management aims at avoiding and managing such crisis. This can be done more effectively by identifying the key performance indicators.

In government agencies, KPIs can be categorised into 4 perspectives namely, financial perspective, information and knowledge management perspective, team management and operational efficiency.

Financial perspective includes percentage government aiding, percentage non-government aiding, percentage aiding from public and percentage increase in outlays. It provides the financial overview of the government agencies.

Information and knowledge management perspective includes KPIs such as sources of information, external communication and awareness programmes, knowledge management and percentage increase in informational system reach.

Team management perspective deals with team related activities. It include number of crisis management teams, technical training sessions, percentage experienced members and psychological and motivational training sessions.

Operational efficiency perspective refers to the efficiency of crisis management of government agencies. It includes average time taken, percentage of crisis successfully resolved, number of supervisory committees, coordination.

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Related KPIs: Financial Statement Analysis, Market Risk, Financial Risks, Operational Risk, Active Portfolio Management, Financial Outsourcing, Financial Benchmarking, Personal Finance

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Sample reports:

Some reports were generated with Balanced Scorecard Designer for the Financial Crisis Balanced Scorecard Metrics KPI to show both – Balanced Scorecard Designer functionality and a part of KPI content:

• Check Overview KPI Report sample.
• Check Full HTML Scorecard Report sample.
• Check Diamond Style Report sample.

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The Balanced Scorecard Designer software was used to create this KPI.

Description by authors:

When an organization experiences a financial downturn, it has to take into consideration a variety of factors to effectively deal with the situation. The need of the time is to use a standard framework that can help in getting a holistic view of the business. KPIs arranged in a Balanced Scorecard can help the business in managing its performance during a financial crunch.

KPIs in this regard can be broadly grouped under four perspectives- financial, business development, operational and workforce management.

Financial Management consists of KPIs such as % increase in credit days, % decrease in debtor days, liquidity ratio, accuracy of financial risk forecasts and consistency of cash flows.

Business Development Perspective takes into account KPIs like number of new long-term contracts initiated, client oriented products and services introduced, lead generation effectiveness, response level.

Operational Perspective provides an insight of the operations of the business. It comprises of KPIs like % reduction in decision-making and lead time, % decrease in cycle time to resolve adjustments, simplification of lending conditions and identification of negative patterns.

Workforce Management Perspective provides measures to effectively manage the workforce during financial crunch. It includes KPIs such as % decrease in staff turnover rate, training uptake, % decrease in sickness/absence Level, crisis communication and continuity of information and feedback.

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Related KPIs: Mergers and Acquisitions, Data Loss, Government Crisis Management

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Sample reports:

Some reports were generated with Balanced Scorecard Designer for the Crisis Management Companies Balanced Scorecard Metrics KPI to show both – Balanced Scorecard Designer functionality and a part of KPI content:

• Check Overview KPI Report sample.
• Check Full HTML Scorecard Report sample.
• Check Diamond Style Report sample.

Balanced Scorecard Designer Screenshot:

The Balanced Scorecard Designer software was used to create this KPI.

Description by authors:

Key performance indicators (KPIs) are the yardsticks against which an organization can easily measure its current performance and at the same time, devise methods to control future activities. They protect the companies from deviating and falling into a crisis situation.

Undoubtedly, for a Crisis management company KPIs can be immensely helpful. For such companies, they can be broadly classified into four categories: Financial, Customer, Education and growth and Internal processes.

Financial indicators reflect the performance of the company in financial terms. Revenues generated, profits earned, fee charged etc., can be used as parameters here.
Customer perspective refers to the image of the company among its customers on the basis of its various accomplishments. This can be known by the number of clients, cases resolved, awards and credibility ratings.

A very important aspect for the working of a crisis management company is to ensure that its employees possess the right kind of skills and training to tackle any kind of situation. Therefore, number of technical and psychological training sessions held, counseling provided and compensation play a significant role.

Internal processes perspective is another important dimension to look out for. Efficiency of the company would depend on the time it takes to resolve the issues, number of experienced personals and different services provided across various fields.

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