Crisis Management for IT Companies

Crisis management is a pivotal element for companies to address the unforeseen predicaments and prepare for upcoming potential threats. It encompasses the methodologies and tactics employed by organizations to anticipate, respond to, and recover from unexpected events that could harm their reputation, operations, or stakeholders. 

Here’s a route map to an efficient crisis supervision:

1. Risk Assessment and Impact evaluation:

Identification of common minae potentiales is prerequisite step and for IT companies, this might include data breaches, service outages, software failures, negative media coverage, customer dissatisfaction, regulatory compliance issues etc. These critical issues can have a devastating impact on operations, reputation and finances as well. It is evident to prioritize the risks based on their probabilities and potential severity. 

On 19 July,24, over 8.5 million computers were hit in one of the worst cyber incidents that have happened in the history and this outage affected multiple industries, grounding flights, disrupting health services, and rendering payment systems unavailable. 

https://blogs.microsoft.com/blog/2024/07/20/helping-our-customers-through-the-crowdstrike-outage/

 

2. Planning Framework:

To develop a holistic plan; outline the procedures for different forms of risks, address the roles and responsibilities for the individuals involved in the team and establish standard communication protocols. Generation of a response framework involves identification of key stakeholders, cultivating appropriate communication templates and establishing a chain of command/line-of-action for decision making.

 

3. Activating the response framework:

This involves internal communication (the crisis team, legal stakeholders, employees) to start the mitigation and external communication which involves crafting a public statement across multiple channels. 

For e.g., TCS legally diplomatic response to the allegations of discriminatory practices based on race and age in US, denying the misleading and meritless claims by the employees. https://www.peoplematters.in/news/talent-management/tcs-faces-backlash-employees-lodge-complaint-over-layoffs-and-alleged-discrimination-40797

 

4. Post Crisis Evaluation and Re-building trust:

Assessing the core competencies and areas of concern and documenting a detailed report on the crisis, response, and outcomes helps with future mitigation plans with more efficacy. To rebuild the trust, hurtful sentiments of the impacted parties should be acknowledged, and efforts for the amelioration of affected stakeholders should be made. 

Much like how, Infosys CEO Salil Parekh stated that the company is mobilizing GenAI big time that is benefitted to clients and hence it won’t lead to layoffs in the company. https://www.msn.com/en-in/money/topstories/infosys-layoffs-ceo-salil-parekh-s-big-statement/ar-AA1poSQe 

In a similar situational crisis, TCS CHRO Milind Lakkad in Feb, 2023 stated about the grooming talent long-term career growth and IT giant will be looking for hiring startup employees who were impacted by the layoffs.

https://economictimes.indiatimes.com/tech/information-tech/tcs-not-considering-layoffs-hiring-impacted-employees-from-startups/articleshow/98062483.cms?from=mdr

Restoring and reinforcing company’s commitment; TCS attrition not only continued to drop to 12.5% as of March 31, 2024 but For FY25, the company is expected to provide appraisals ranging from 4-7% for its employees. https://www.goodreturns.in/news/layoffs-to-hiring-to-appraisals-tata-groups-mega-it-firm-tcs-at-centre-stage-for-freshers-employees-1341581.html

 

To deal with the negative publicities due to unanticipated crisis - engaging with community, monitoring public sentiment, regularly addressing the concerns and updating without any discrepancies, and ramping up CSR initiatives through continuous improvement is essential. Feedback mechanisms, positive stories and highlighting future plans reaffirms the faith of public.