Contingency planning is about assessing enterprise risk and putting processes in place to deal with a potential emergency, while crisis management concerns the way actual emergencies are handled in the moment. The two disciplines work together to help organisations cope with threats to business continuity.
Crisis management and contingency planning are essential strategies for any business and work in tandem – with contingency planning forming a vital part of an overall crisis management strategy. With a strong contingency plan in place, businesses will have a much smoother ride managing a crisis when it does occur.
Preparation vs Response
While crisis management and contingency planning are more notable for their similarities than their differences, the key distinction is that contingency planning is all about preparation while crisis management is about response.
Creating a contingency plan is a proactive activity that entails the identification of enterprise risk and the development of comprehensive and clear plans for the handling of threats or crises. It will both seek to mitigate the risk of threats becoming actual incidents and lay out processes for the handling of those that do, in order to return to normal business operation as quickly as possible.
Crisis management is all activity that occurs in response to a severe incident – it’s about reaction, not preparation, but should be informed by careful planning.
A contingency plan forms the framework for your company’s work with business continuity and crisis management. Communicated properly, the plan will ensure that everyone who has a role in handling a crisis knows their responsibilities, tasks and the authority they operate under.
Your contingency plan should be created in-line with any and all legal processes to which your business is subject and include consideration for the team expected to enact your strategy. Depending on the needs of your business, it can be for general crisis preparedness or include policies for handling specific situations.
Your contingency plan should be regularly updated to take account of the evolving risk landscape, along with internal changes, and processes should be discussed and rehearsed to ensure staff are well equipped to enact the plan.
Crisis management concerns all the reactionary and mitigatory activity that takes place when a serious issue occurs. It can be described as a mode of working that the relevant team transfers into when the need arises. This team will work to assess the issue, then implement an appropriate recovery strategy. Crisis management also includes communication – with key stakeholders, employees, customers, and potentially the media – of the problem and plan, along with reassurance that the matter is under control and the business will soon recover.
Why you Need a Crisis Management Strategy and Contingency Plan (Working Together)
Risk is an unfortunate reality for business, but careful planning before incidents happen, and strategic management in the face of them, help an organisation lessen the impact when risk becomes crisis.
Ensuring someone in the business knows what to do in the event of an emergency is a start, but it’s simply not enough. Creating a clear contingency plan and ensuring that it is shared widely and understood by any relevant personnel is essential for any business that wants to be able to cope with incidents and emergencies effectively.
For a fully robust and effective response to any emergency, contingency planning and crisis management should be integrated.
In any crisis situation, timing of response is critical – any delay can seriously exacerbate the threat to your enterprise and hold up the return to business as usual. Knock-on effects such as delays in order fulfillment – which in-turn leads to negative impact on reputation and potential loss of business – are common for those companies unable to adequately respond to an emergency in good time.
Considering how you will handle crisis management as part of your contingency plan will help you take positive, decisive action as quickly as possible should the worst happen.
If you’d like to know more about best practice for contingency planning, including how to prepare for crisis management before you have to perform it, then download our free ebook on how to write a contingency plan.