Five Assumptions You Have to Make When Managing a Crisis
This article is written BY By Jack and Suzy Welch
Crises are a Part of Life…and Business
It’s a rare day that you turn on the television or open the newspaper and don’t encounter a story about a crisis unfolding in an organization somewhere.
Crises come in all shapes and sizes. Some are very public like bank employees opening accounts under false identities (Wells Fargo) or a pharmaceutical company dramatically increasing the price of a life-saving treatment (Mylan and the EpiPen). Others are less public, like your team missing a major product launch date or not catching a design flaw that results in a product recall.
The crisis could have been caused by someone on your team you barely know or it could have been caused by you. But suddenly, there it is, and how you manage it can make all the difference in the world.
When that bombshell drops, your instinct will be to go into panic mode. You may want to run away and hide, or lash out, or get defensive. All of these are perfectly natural reactions, but all are the exact opposite of what you should do.
And one more thing…don’t think you’re immune to crisis management just because you’re not part of the C-Suite or hold a senior-level position in a large division. If you’re a leader of even a small team, you need to have a plan for handling crises before they occur.
Five Steps of Crisis Management
1. Assume the problem is worse than it appears. Skip the denial and assume that the issue is REAL and that it is SIGNIFICANT. Yes, you may end up overreacting, but far better to expect the worst than to hope it’s not that big of a deal and be caught off guard when more details surface.
2. Assume there are no secrets and the news will get out. Covering up the issue only makes it worse. Not only will the story eventually surface – they always do, but you will make yourself complicit for attempting to hide it.
3. Assume your organization will be portrayed in the worst possible light. While this one is often more of a “public media” thing, even within your own organization, it’s possible for other teams or divisions to jump onto a bandwagon of condemnation and finger-pointing, especially if these actions deflect any (potential) blame away from them.
4. Assume you will have to make changes to people and processes. Whether the crisis was caused by the illegal/unethical actions of a rogue employee or a “system failure” that can’t be attributed to any one person or group, things have to change to prevent the issues from recurring. Further, these changes will have to be announced loudly and publicly to reassure others that you have identified the problem and have taken swift and decisive action.
5. And finally, assume you will survive and get stronger. Yes, it’s hard to believe the light of day will ever shine again when you are in the middle of your darkest hours, but this will pass. And when it does, you will be smarter and stronger as a result of the experience.
Building a Solid Foundation Before a Crisis Occurs
While there are no foolproof approaches to prevent all system failures and bad actors, there are several things you should be doing all the time:
- Establish a culture of candor where people can speak up when they see something wrong without fear of reprisal. In addition to this, put in place a highly trusted ombudsperson to manage a hotline where people can anonymously report concerns.
- Constantly review the behaviors you are rewarding. There’s nothing wrong with performance bonuses for adding new customers, beating inventory targets, etc., but if there are insufficient guidelines in place to ensure that everyone is aligned to the mission and values of the organization, there is a risk that well-meaning incentives could drive unintended actions.
- Don’t create your own crisis through the way you let someone go for performance reasons. Treat people with dignity on the way out just as you did on the way in. Severance dollars are some of the smartest dollars you will ever spend. Disgruntled employees can wreak havoc on an organization and while, more often than not, their claims may be unfounded, the damage done to the organization can be significant.
- Be a good citizen in the community. Participate in as many activities and causes as you can in the good times. This will put chips in the bank that can serve you well should a crisis occur.
- Have your own communication channels functioning well (Twitter, Facebook, LinkedIn, etc.). You need to have your direct-to-the-world channel in place before a crisis occurs so you have an existing audience ready to hear directly from you, not through a third-party filter over which you have little control.
The Path Ahead
In the midst of all this crisis management, don’t forget about your day job. While the nightmare of the crisis is unfolding, you still have to run your business. You have to keep the factories operating, get your products to your customers and continue to close sales. Facing an unexpected crisis adds a whole other job to do on top of your regular job, but you can’t stop the rest of the world while you manage the crisis. If you do, you may not have a business to return to when the crisis passes. And it will pass.
Whatever your crisis is, own it. Act swiftly and learn from it. If you can emerge from a crisis smarter than you were going into it, then something good has come of it. Sure, the learning may not have been through the circumstances you would have preferred, but it does give you the opportunity to make yourself and your team smarter and stronger. It gives you the chance to prevent that mistake from ever happening again.