The Role of Communication in Effective Crisis Management in Manufacturing

April 4, 2023

“Communication is like blood coursing throughout the human body.  When blood stops flowing in our bodies, we die; when communication stops flowing in the organization, it dies.   

Not only does communication deliver nutrients and bring life to an organization; it also removes wastes such as harmful rumors, speculation, or false perceptions.” 

Richard Payne 

Effective communication during a crisis, especially in manufacturing, can mean the difference between a devastating interruption in operations and a quick re-entry into normality. Crises can come in many colors and flavors, from cyber-attacks and natural disasters to supply chain breakdowns and criminal acts. When these sorts of situations rear their ugly head, it’s important to meet them forthrightly. A crisis ignored rarely leads to a positive solution; addressing the matter head-on shortens the time to resolution and gives stakeholders confidence that it’s being dealt with appropriately. 

Internal and External Communications 

When a crisis strikes, communication must be oriented outwards and inwards. Companies need to know that if they’re not talking, their employees, partner companies, and other industry leaders are. Companies must take control from the beginning and own the problem and control the narrative. Anything less will be perceived as an abdication of responsibility and add fuel to the fire. 

Internal communication with the employees should be transparent and direct. As a general rule of best practice, employees should avoid speaking to any media outlets. During a crisis, the message coming from the company should be clear, unified, and delivered by a single spokesperson or group of spokespeople. Interviews with employees, especially those closest to the crisis, are almost always a bad idea and can interfere with a company’s mitigation efforts. 

External communication to stakeholders should also be transparent and direct and as truthful as possible. Spokespeople should make every effort to communicate the nature of the crisis, what the company is doing to address the crisis, and how long it will take to return to normal operations. This sort of communication is key to restoring confidence to investors and other industry stakeholders. It also builds goodwill by helping downstream manufacturers plan for any disruptions. 

Seraph has observed that many suppliers tend to become very protective of information on the health of their operations when facing a crisis. This behavior is almost always a mistake since visible underperformance becomes quickly extrapolated by customers to the worst-case scenario. As a result, it damages the supplier’s reputation and credibility. Supplier management teams will quickly descend on the operation looking for information and evidence of a change.  

Customers may be able to provide helpful suggestions, but, they will require a substantial time investment to do so. If the organization’s team wants to remain in control, it is better to share more, not less.  

Of course, organizations don’t need to and shouldn’t share everything. Any information presented to customers must be organized in an intelligent way. Organized action plans to resolve the situation inspire confidence. The best updates will identify the core issues impacting critical customer-facing KPIs and how the team’s work over the coming days will improve those KPIs. Investing in communication and data visualization during a time of crisis is almost always worthwhile. It doesn’t need to look beautiful, but it must be clean and clear. Companies that rely on drawn-out verbal explanations when sharing reports will begin to see customers believe that the situation is out of control.  

Why Communication Matters in Effective Crisis Management 

Apart from working to resolve the crisis, effective and clear communication is the most important thing that a company can do in these situations. The very fact that the company is communicating openly and forthrightly exemplifies that: 

  • They’re taking the situation seriously. 
  • They’re implementing measures to remedy the situation 
  • Transparency is the priority rather than coverups. 

Communication is essential because it demonstrates that a company is taking responsibility for whatever is happening rather than abdicating responsibility. This creates a sense of trust, goodwill, and understanding among all the different stakeholders. Ultimately, crises are bound to happen regardless of the type of mitigation that a company engages in. Therefore, it’s not the lack of crises that determines a company’s quality and trustworthiness, rather it’s how they manage the crisis. 

How to Communicate Effectively in Crisis Management Scenarios 

It’s not enough to immediately begin communicating when a crisis strikes. There is (or at least should be) a playbook already established for how to meet crises when they arise. 

Plan Before it Happens 

First, the best way to deal with a crisis is to plan before it happens. Companies that don’t have a crisis response strategy are often quickly overwhelmed by the magnitude of the problem. The worst thing that a company can do is be caught unprepared. 

A communication plan should unify the company’s leadership so that they can speak with one voice. Adding confusion with disparate messages during a crisis is a great way to earn the ire and criticism of stakeholders. However, a unified message from the company’s leadership and spokespeople can inspire confidence.  

In addition to defining the message, the communication plan should also define the audience—who needs to understand, what they need to know, and why. This will ultimately help craft the message that the company’s leadership and spokespeople are communicating.  

Once all of the information has been diffused, the manufacturer should monitor and measure the effectiveness of communication. Has the crisis begun to stabilize? How are suppliers and other manufacturers responding? Any feedback trends that appear repeatedly are often indicative of a larger sentiment and should be addressed with further communication through the correct medium. 

Be Honest 

Perhaps the biggest quality that stakeholders are looking for during a crisis is a spirit of honesty. It’s important to lay bare the reality of what happened–the good, the bad, and the ugly. While this may be painful, any hidden aspect will eventually come to light by a disgruntled employee or a clever reporter. The best thing to do is take responsibility for the whole truth of a given situation. 

Be Willing to Change with New Information 

At the beginning of a crisis, details are often fuzzy and it’s almost always the case that new information arises which will change the official story of the crisis. This can take the form of new estimations for returning to operations, changes or material facts, and more. The best thing a manufacturer can do is provide frequent updates with new information that describe how the crisis is evolving. 

Reevaluate After the Crisis to Learn and Improve 

As much as crises can be difficult for manufacturers, they can also be excellent opportunities to reevaluate, learn, and improve their operations. Crises can frequently reveal issues that were formerly invisible and help companies understand and mitigate similar crises in the future. They can also move companies to develop plans to deal with other crises or improve already-existing plans that were lacking. 

Before companies can begin communicating what the crisis is, they must first begin dealing with the problem in a boots-on-the-ground manner and actually solve the problems. Hiring a manufacturing consulting company like seraph can be a great way to begin addressing a crisis with operational roots. Our team of specialized operational consultants works alongside manufacturers and acts as a support structure in any crisis situation. Our advisors are former management at many suppliers and OEMs and are experts in production, operational efficiency, and crisis management. Contact us today to schedule a discovery call, or see our case studies for more information. 

About Seraph 

A global enterprise consulting firm that partners with business leaders to handle their most complex problems in areas such as supply chain, operations, and manufacturing challenges while delivering long-term operational and leadership improvements. Seraph has extensive on-site industry experience in the automotive, private equity, defense, medical device, electronics, energy infrastructure, and engineering sectors. The Seraph leadership team brings vast expertise across; crisis management, mergers, acquisitions, due diligence, restructuring, turn-around services, product launches, and logistics. Our four-phase process has been proven to provide quick payback and positive ROI, which is measured throughout customer engagement. Learn more at www.seraph.com and follow Seraph on LinkedIn.

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