Tuesday, April 6, 2010

Containing the Crisis

When a crisis does strike, the first thing you must do is contain it. Your goal is to stop the hemorrhaging fast. You must make decisions quickly. Be on the scene. Your physical presence is important. It lets everyone know that your company cares about what is happening. And you must communicate critical information to key people.

For example, when a supermarket chain was accused by major TV network of selling spoiled meat, the value of its stock plummeted. But the management team responded quickly. They gathered the facts by not only listening to the news media and hearing the message from stockholders but by paying attention to and working with their own employees as well.

They immediately stopped the practice of selling less-than-fresh meat, and they put large windows in the meat-preparation areas so the pubic could watch meat being packaged. They expanded their employee training, gave public tours of their facilities, and offered consumer discounts to draw people back into the stores. The company eventually earned an excellent rating from the Food and Drug Administration and sales returned to normal.

Be decisive and compassionate

When a torrential rain flooded a section of a building, the water destroyed computers, carpeting, paper records, and the workspace of 10 employees. The manager was on the scene as the workers showed up in the morning to help workers and direct immediate clean-up efforts. Later, after the clean-up, workers began having breathing problems and headaches. Though the carpet had been cleaned, it was determined that it was probably infested with mold. Instead of trying to clean the carpet again, or waiting for budgetary approval, the manager immediately ordered all the carpet in the area be removed and replaced.

Make decisions. This manager demonstrated two essential qualities necessary in a crisis—decisiveness and compassion. First, his presence on the scene showed that he, and the company, cared. Later, his decisiveness in replacing the toxic carpeting demonstrated that the health of employees was more important than any other consideration.

Decisiveness is not always easy, but it is important. Often you have to act on too little or inexact information. If there is no workable contingency plan in place, if there are no guidelines for the situation, and if there are no trusted confidants, there is still always your conscience. Ask yourself, what is the right thing to do? And then do it, hoping it is the right thing!

Respond to your people. Compassion is a part of many organizations' cultures, and it is typically rewarded in those cultures. But not always. Some companies pride themselves on having a ruthless and competitive culture. Nevertheless, a manager still has the power to set the tone for his or her own division. No manager—regardless of the corporate culture—has to abandon compassion or humanity, especially during a crisis.

Go public

Anyone who is handling a crisis is going to have to communicate with others. This could be the general public, or your immediate vendors, suppliers and clients. In any case, you will need to communicate to your team how the crisis will impact them and what they need to do. What you say and how you say it are critical. You are managing the perceptions of people whose reactions can drastically affect what happens. The way you communicate can precipitate actions that can make the crises worse—or better. A crisis, by definition, means that there is bad news. Dealing with pain and anger early on can forestall far worse problems later on. Your goal is to contain the overall crisis, not to make the present moment easier.

Expect rumors and false information. During a crisis, people want information—true or not. Use the communication plan you've developed as part of your crisis planning to address and stop the flood of false news.

Notify key people. Inform anyone who needs to know—company management, customers, employees, suppliers, government authorities—and do so quickly, within two hours, if possible. If you have created a communications plan or list of important phone numbers, now is the time to use it.

Stick to the facts. Whether you're talking to co-workers, authorities, or the media, make your message straightforward and honest.

Avoid these typical, but inappropriate messages:

  • "No comment."
  • "We haven't read the complaint."
  • "A mistake was made."
As Warren Buffet made it clear in the quote above, give all the facts that you know. You are not obligated to speculate, or to cover-up because lying and speculating will only damage your credibility and your company's credibility if and when you are proven wrong.

Communicate all the bad news at once. It's like pulling off a sticky bandage. It will hurt now, but it will be over soon.

Communicate honestly. If you don't communicate honestly and openly, you will likely face a host of dangers.

  • People will think you have something to hide and resent it. They'll keep digging, and when they find out what's going on, they will blame you.
  • People cannot act effectively unless they as fully informed as you are.
  • People will not be fully behind you if they do not understand the problem. You need as much support as you can get!

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