A firm does not operate in isolation and is affected by various micro and macro factors. Months spent on fine-tuning your business plans can come undone unexpectedly with forces that are beyond our control. However, a crisis is not the end of the road — think of it as an unpleasant speed bump on a less flattering route.

A crisis can be of any form — financial, economic, product failure, loss of goodwill or even scandals that leave the firm exposed. In fact, it is not the crisis but how you react to it that will determine the future of your business.

Plan, strategise and execute

Businesses must recognise their interdependencies with the various factors in play in their immediate milieu. In today’s world, where information is rich and data analytics efficient, it is vital that firms predict and plan for contingencies based on this. This will ensure that when a crisis does hit, you have protocols and defence strategies in place that can guide you to a faster reaction.

In a crisis, it is often the fast turnaround time that can prevent it from escalating and contain the damage.

Move from denial to acceptance

For most firms, a crisis is often greeted by denial, especially at the top level. The tendency to downplay an event is self-preserving and can be quite detrimental. The first step to solving a problem is accepting it.

Accept it and communicate it to the organisation so that it can work together as a single mechanism towards the problem. In some cases, there might be questions of responsibility and accountability that may make the process more complex.

Prioritise your operations

A crisis that hits a firm ultimately finds its foothold in your profit and loss statements. Therefore, you need to curb or limit its effect on your revenues, sales and profits.

Cut down on operations that bear more cost than profit and focus on revenue generation through profitable ventures. A timely product offering can be just the thing your firm needs when it is down on its luck.

Optimising your workforce

A firm is as good as its people, the statement is especially true for a firm in crisis. As hard as the decision may be, this is not the time to keep people who do not bring value to the firm.

It is the time to optimise your workforce and cut down on any expenditure that does not bring a more than proportionate return to the table. For most people, layoffs are the last resort as they erode the trust that the firm has with the workforce. However, it is a harsh reality we must face when backed into a corner.

Communicate, communicate, communicate

I cannot stress the importance of communication when going through a rough patch. Remember that the firm is not just the top brass or the handful in the boardroom. It is made up of the employees, shareholders, suppliers, market intermediaries and the customers.

A direct communication will prevent chaos and bring some order to the situation. It also ensures that your brand stays insulated from baseless rumours that add fuel to fire.

Respond, don’t react

A natural instinct for most people is to react to a given situation. This differs from a response as it is entirely derivative of the problem and makes the problem, not the solution as its primary source of action.

Organizations also tend to first react often making the situation worse off than before. When faced with a difficult problem, my personal mantra is to take a step back from the situation for a while.

This allows me to gather my thoughts and gain some sense of calm as I distract myself with some mundane task. Thus, when I approach the problem after a break, I am able to break it down and formulate a viable strategy to mitigate the crisis.

Every company has its share of crisis situations that originate from within or are the product of an external force. There is no way we can completely be shielded from them.

However, nerves of steel and a willingness to push through the bad times will ensure your firm thrives.

Vishal Mahtani is founder of Artists-Alive.