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Corporate Crises: How to Restore the Workplace and Preserve Corporate Culture

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Guest Blogger: Chemistry Consulting Group

Chemistry Consulting Group is a full-service HR consulting firm servicing clients across Canada and throughout the US. They provide HR Consulting, Recruitment Services and Leadership Development to private and public sector organizations as well as non-profit entities. Chemistry takes time to understand your business needs and provide support in the areas where you need it, so you can continue to do what you do best – and let them handle the rest.

We are living in a state of continuous change, characterised by a series of crises that vary in nature, scope and intensity but share a common constant: inevitability. 

As businesses face a rapidly changing world, the challenges of political upheaval, rising inflation, economic uncertainties, cybercrime, supply chain disruption and climate crises have emerged as formidable and unpredictable challenges. The very survival of today’s corporation relies on its business leaders’ ability to anticipate and respond proactively – not only to survive, but to thrive in a state of permacrisis.

The key to success: the ability to navigate through ongoing crises, and the capacity to adapt and succeed in the face of constant disruption – in other words…resilience.

 

crisis

 

Types of Corporate Crises

Before we consider actions to mitigate crisis impact and restore our workplaces post-crisis, we need to better understand the emerging risks. If we can’t completely alleviate them, we can prepare to respond to them. The most common corporate crises we currently face include:

 

Financial

A financial crisis occurs when a company faces severe monetary challenges, such as bankruptcy, insolvency, or liquidity issues, which can threaten its financial stability and overall operations. A financial crisis is a common outcome from the crises listed below.

 

Technology

A cyber breach occurs when sensitive information is compromised, and privacy and security are violated.  Data may be lost, and system failures may lead to a shut down of operations resulting in regulatory penalties, diminishing consumer confidence and causing significant revenue losses. Frequently, ransomware is used to lock and encrypt data, files and devices rendering them unusable until the attacker receives a ransom payment from a company. Thus, cybersecurity has become a top priority for many organizations. 

 

Labour

This type of crisis may involve conflicts with employees, labour shortages, labor unions, or work-related incidents that disrupt operations such as strikes, or damage to one’s brand and reputation as a responsible and respectable employer. Labour crises may also be caused by a sudden change in labour legislation – such as foreign worker laws or changes to minimum wages. The exceedingly high cost of living is making it increasingly difficult for organizations to source talent in unaffordable cities. Employees cannot afford to live in expensive hubs and find themselves either commuting for hours each day just to attend work or seeking hybrid or remote work options. Companies often face simultaneous labour crises.

 

Reputation

This may surface when negative publicity, scandals, high profile investigations or ethical controversies damage an organization’s image, credibility, and public perception, often depleting customer trust and stakeholder confidence, enabling disastrous outcomes. Misinformation and disinformation are also an expanding threat to corporations. A reputation crisis may intertwine with any other type of crisis.

 

Product Recall

When a company must recall its products due to safety concerns, defects, or health hazards corporations may become exposed to legal liabilities, financial losses, and reputational damage.

 

Natural Disaster

Natural disaster crisis encompasses disruptions caused by unpredictable events like earthquakes, hurricanes, floods, or wildfires that can impact a company’s human capital, property, supply chain, and operations, requiring immediate response and recovery strategies.

 

Epidemic, Pandemic and Biological Disaster

Hazards of organic origin, including bacteria, viruses, parasites, mosquitos carrying disease-causing agents and toxins or bioactive substances that occur naturally or are deliberately or unintentionally released. These disasters can lead to economic and environmental damage and loss of life or contamination affecting populations, food sources and may endanger species. 

 

Geopolitical

Political instability, tensions and military conflicts between countries, terrorist threats or geographical events that can have regional or global impacts. This can impact human capital, trade deals, tariffs or product bans that may impact a corporation’s operations.

The list is daunting, but there is a distinct possibility that a company will be impacted by most or all of these crises in the coming years.

 

natural disaster

 

Planning for Crises

Safely anticipate that a crisis will occur. Developing a crisis management plan before you need it will ensure an organized approach to navigate through challenges swiftly, minimizing operational disruption and financial loss. Crises can be unpredictable and incredibly complex to manage.  

By assuming a proactive approach to crisis management, organizations can emerge stronger and more resilient from even the most challenging situations. A thorough crisis communication plan, outlining roles, responsibilities, communication channels, and procedures for respective crises will serve as a roadmap to navigate through challenging situations. Regularly revisiting the plan (and testing it) will ensure it remains relevant and effective. Offer training and practice to key personnel to ensure they are equipped to handle their crisis management roles while under pressure.

Consider an appropriate spokesperson(s), strategize for proactive mitigation of damage. Create guidelines for staff in terms of participating on social platforms. Determine which communication channels will be employed to communicate with employees (corporate intranet, text, email, or group chat).  

It is human nature that people will talk and share information about the crisis. Taking charge of your communications will allow you to set the narrative, ensure transparency, integrity, confidence, and loyalty.

Effective crisis management will help ease the impact of negative incidents on brand image and public perception. 

 

How to Restore the Workplace and Preserve Corporate Culture

The crisis has underscored the fact that a company’s culture and the people who comprise that culture matter more than ever. If leaders are able to establish a “we’re all in this together” mentality, this becomes a chance to establish deeper connections and even more solidarity than when things were stable. 

Culture is at the very core of your organization. How is it possible for a company to survive through constant disruption and not only maintain culture but also strengthen it in a time of chaos and insecurity?  

 

Communication

It cannot be understated how critical communication is in trying times, no matter the crisis situation. Transparent and proactive communication during a crisis will restore confidence amongst stakeholders—customers, employees, investors, and partners— and will demonstrate that the organization is capable of handling adverse situations. This confidence is key for retaining loyalty and support during difficult times.

 

Timely, Clear and Decisive Action

The most effective way to respond to a crisis is with timely, clear and decisive action. Although many people within an organization play key roles in crisis management, senior executives are most likely to be involved at every stage of crisis response. Still, the hierarchy for information sharing needs to be well-established before a crisis occurs. Prepare in advance by anticipating questions or concerns that will emerge. Providing accurate and transparent information to stakeholders as soon as possible is fundamental. Communicate when updates will occur and what the next steps will be. If a company avoids or withholds critical details or downplays the severity of the situation, this will erode trust and credibility and may permanently damage the organization’s brand and reputation. 

 

Prioritize the Team

When crisis occurs, leaders must remain calm and work with the crisis team to employ an orderly approach to constructing and distributing communications. When in doubt, over-communicate and always put your employees first. Leaders should empathize with their employees and try to gain an understanding of the challenges their employees are going through. Ask people how they are doing, find out what they need and attentively listen to their responses.  

Don’t worry so much about the hours your employees are working, rather concentrate on results. Provide them with direction and broad expectations but allow them some freedom. Micromanaging will most certainly backfire in unstable times. Find trust that your employees will do their jobs and offer flexibility, if possible. If you can demonstrate trust with your employees, they will respond by sticking it out and supporting the company through hard times.

Frequent communication updates are critical during a crisis. Encouraging feedback and being responsive is also important. Leaders should aim to be optimistic and uplifting, but also need to be honest.

 

Reinforce Your Purpose

Leaders need to continuously demonstrate the corporate purpose in every action they take and lead by example during this critical time. 

 

A businessman standing with arms raised toward a towering glass building, symbolizing success or achievement.

 

Learning from Crises

Managing a crisis can stretch companies to the limit, but leaders have an opportunity to transform these extraordinary challenges into ways of stimulating corporate culture and reigniting employees' faith in the company and its future. Each crisis will offer a vital learning opportunity. Assessing how crises are managed helps refine existing strategies, policies, and protocols, fostering continuous improvement. In fact, a crisis could leave your company in a better place…enduring a close call with disaster has left many companies stronger than ever. The ability to make decisions quickly, having a well-tested plan in place, and identifying crisis team members are factors that have helped those companies who’ve come out on top.

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