Crisis Management Strategies for SMEs in Nigeria

Crisis management strategies for SMEs in Nigeria

Crisis Management Strategies for SMEs in Nigeria

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CRISIS MANAGEMENT STRATEGIES FOR SMEs IN NIGERIA

INTRODUCTION

Let us start off by breaking this topic into segments for better understanding. A crisis can be defined as a sudden or an unexpected turn of events leading to a major unrest among individuals in a country or state or even workplace. Crises affects an individual, group, stakeholders, organization or society, state and countries. A perfect example of this is the recent Covid 19 pandemic that has crippled the world globally, it has led to deaths, businesses closing down, unemployment, financial crisis and losses.

Example of crises that can affect any business are:

  • Natural disasters e.g. an earthquake
  • Accidental disasters e.g. a fire outbreak
  • Terrorist attack
  • Stolen relevant data from the business
  • False accusations
  • A disease epidemic
  • Loss of a key staff or employee
  • A global financial crisis
  • Cyber attack
  • Reputation damaging fraud

Any of these situations mentioned above are critical to the business finances, reputation and the safety of individuals. One of the ways SMEs can tackle crises is putting in place efficient and adequate crisis management strategies

Crisis management is the tool that will used to manage a crisis such as the Covid 19 pandemic. Crisis management can be defined as the art or way of dealing with sudden and unexpected events which disturbs the employees, organization as well as the clients and customers that patronizes the business.  Crisis management should be a top priority for all businesses especially Small and Medium sized Enterprises (SMEs) since they make up the vast majority of businesses in most countries.

A standard crisis management strategy must include the Pre crisis phase and the Post crisis phase. The first has to do with all the measures and plans that are implemented before a crisis happens and the latter deals with coping with the crisis and measures to be taken after the crisis has happened in order to ensure that the business is back, running efficiently close to its former self.

Small and Medium sized enterprises (SMEs) must ensure that they implement the following crisis management strategies in order to ensure that the business stands the test of time during crises:

PRE CRISIS PHASE

The following are the crisis management strategies that SMEs should implement before a crisis occurs

  • ESTABLISH A CRISIS MANAGEMENT TEAM

This should be the first step to follow when setting up a crisis management plan. SMEs must ensure that a crisis management team is created, the team may include the CEO, senior executives, departmental leaders, head of public relations or the human resource head and other key staffs in the organization. SMEs must include individuals from all company disciplines and segments in order to properly assess the vulnerabilities of the business during the crisis and how well they will tackle all the difficulties that the crisis will bring along. The purpose of the crisis management team is to plan for potential crisis events and to manage those events should they occur. As strategy makers the team develops alternatives and appropriate decisions for dealing with crisis situations by assessing all the situations pertaining to the organization

  • ASSESS YOUR WEAKNESSES
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Another step towards an efficient crisis management plan is to find your weak points. SMEs should hold various brainstorming meetings with their crisis management team and list anything that could possibly harm their company or lead to further difficulties during a crisis. By including employees across all departments, SMEs will lower their risks of missing something critical that will later be a thorn to the business during the time of the crisis. Weaknesses of the business may include Employees difficulties assessing the internet during a virtual meeting, no proper measures taken for effective communication during a crisis etc.

  • CREATE AND FORMULATE A CRISIS MANAGEMENT PLAN

There is a saying that goes thus ‘’as you lay your bed, so you must lie on it’’. This simply means that if you fail to plan, then you will plan to fail and suffer the consequences. SMEs must ensure they formulate a dedicated cross functional team led by the owner of the business or the CEO and assess the situation at hand and works towards creating a crisis management plan. The crisis plan must include how the SMEs will continue operation, delivery to their clients and customers, how they will minimize the impact of the crisis on the business, and more important is the safety of individuals. An example of a crisis management plan that various businesses have adopted during the Covid 19 pandemic is enabling employees to work from home using the medium of internet apps. When a crisis occurs, there is always a short decision time. SMEs that has created a crisis management plan are always quick to react to crisis effectively.

  • CONDUCTING EXERCISES TO TEST THE CRISIS MANAGEMENT PLAN AND CRISIS MANAGEMENT TEAM

SMEs can also conduct drills and exercises to test run the crisis management plans and the management teams that they have put in place. This will ensure that the SMEs are able to assess their businesses and work towards an efficient strategy and better plans in place. It will also allow SMEs to also know how well and accurately they react to a crisis. This can be done on a quarterly or yearly basis to ensure that after each drill, the organization assesses itself and performs much better in the next drill

  • EQUIP YOUR MEMBERS WITH ADEQUATE RESOURCES

The internet has a lot of materials and resources that can be helpful to SMEs staffs and employees during a crisis. SMEs should support their members with all the required resources that will enable them work efficiently during a crisis. Take for example, during a crisis businesses can ensure that all their staffs are given a proper laptop or computer to ensure efficient communications from home. Apps such as Slack, Zoom, Document-sign and others assist in bridging the communication gap between the employer and the employees

  • UPDATE THE CRISIS MANAGEMENT PLAN ANNUALLY

SMEs must also ensure that the crisis management team updates the crisis management plans annually in order to ensure flexibility. Responding to a crisis requires business owners to be capable and make competent impromptu decisions as the situation emerges. This will also ensure that decisions are not entirely based on a rigid plan and they are flexible when it comes to changing the crisis management plans

  • TRAINING OF EMPLOYEES
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SMEs must also ensure that proper training is given to their employees whether formal or informal in order to prepare them for any unforeseen crisis. Emotional intelligence training could also be given to employees in order to ensure that they don’t falter get pulled down by the pressure when working during a crisis. The more knowledge an employee has, the more prepared he or she is for the crisis

  • ADOPT VIRTUAL WORKING PLANS AND MEETINGS

SMEs must ensure that they execute plans to start working and meeting virtually. With proper technology in place, executives of a business could even carry out a business meeting online through the video or audio medium without even meeting physically. Proper measures should be in place whether weekly or monthly where employees will meet virtually or tasks are given to them virtually. This is a very good crisis management strategy as it protects the business from any unknown crisis such as the Covid 19 pandemic, Fire outbreak etc. Due to people self-isolating at home and the practice of social distancing, people have been leveraging on technology by working from home and having virtual meetings instead of meeting physically at the business location

  • ESTABLISH MONITORING SYSTEMS AND PRACTICES

This crisis management strategy will ensure that SMEs are able to detect early warning signals of any foreseeable or unexpected crisis that will affect the business and its stakeholders in a negative way. This will go a long way in ensuring that SMEs are fully prepared for the crisis at hand and if they are not, SMEs should ensure that adequate measures are put in place in order to help them face the crisis at hand. It is also less costly to deal with a problem or crisis before it occurs than to have a full blown crisis and its aftermath which will cripple the organization

  • SEEK EXTERNAL EXPERTS AND PROFESSIONALS

Another crisis management strategy is seeking the help of external experts and professionals that has vast knowledge and are skilled in crisis management tools and strategies. This will also reduce the burden on the crisis management team. SMEs should ensure that before things start becoming uncontrollable, they get help from external experts that will help them tackle any crisis when the need arises

POST CRISIS PHASE

The following are crisis management strategies that SMEs should implement during and after a crisis

  • COMMUNICATE EFFECTIVELY

Communicating during and after a crisis is crucial to successful crisis management. SMEs must ensure that during a crisis, they set up various means of communication in order to reach out to staffs, volunteers, its board, clients, customers and other key stakeholders. This will ensure a sense of connection and a comfort in the difficult time of the crisis. Effective communication with employees and other members of staff telling them that fears and difficulties are normal in time of crises will go a long way in the productivity of such staffs. SMEs can also select the right spokesperson for the business. This individual will be the face of the company during a crisis situation. The spokesperson must be able to handle all types of communication and perform well under pressure. The spokesperson of the business could either be the owner of the business or the human resources leader. SMEs must also ensure that after a crisis, they keep stakeholders updated on the progression of recovery efforts including any corrective measures being taken and the progress of investigations.

  • ESTABLISH AN EVALUATION MECHANISM
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Going through a crisis is not an enjoyable situation. SMEs should establish an effective evaluation mechanism that will ensure that all measures are put in place to prevent the re-occurrence or the occurrence of another type of crisis. This is an opportunity of an SMEs to assess what has happened and how it can be prevented or managed well the next time it happens. It is a process of continual improvement and it presents SMEs the alternative lots of alternatives and incremental improvement when dealing with crises

  • PERFORM DAMAGE CONTROL

One of the ways SMEs can develop and retain their customers or clients is by reassuring the customers and clients after a crisis. Depending on the nature of the crisis, SMEs may need to send emails or make phone calls to clients explaining what happened and the impact it has had on them. SMEs must also remember that a crisis not only affects the organization and its employees but it can also touch all those they do business with. This is one of the post phase crisis management strategy that keeps the organization back in order.

CONCLUSION

Unfortunately, many organizations do not see the need to plan for a crisis. It is very likely that every organization will encounter a problem which may later turn to a crisis because no organization is immune to crises. A crisis becomes a very visible turning point of an organization. It could either make or break the organization if not properly assessed and managed well. How SMEs analyse and respond to these issues may determine the outcome of the crisis. The best prepared SMEs will survive and may even thrive during a crisis. Having an effective and efficient crisis management strategy in place will help the organization when the crisis hits.

About the author

Onamakinde Dare Daniel is a highly motivated accountant with knowledge in Accounting, Taxation, Management, Audit, Costing and Research. He is keen on tax matters due to its ever dynamic nature.

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