Five Keys to Managing A Crisis

Bad things happen to good companies. Follow these five steps to avoid making a bad situation worse or letting it get out of control.

Crisis: Webster tells us it's "a time of great danger or trouble, whose outcome decides whether possible bad consequences will follow." What Webster doesn't tell us is that the way a company's executives handle a crisis can make or break an organization.

Don't believe us? Arthur Andersen denied, delayed, and failed to quickly do the right thing when accused of being involved in shady accounting practices. The company folded. On the flip side, Johnson & Johnson took responsibility for Tylenol™, acted decisively, and showed genuine concern when a serious product tampering case hit the news. The company came out the hero - not the villain.

What's the difference in the end result of these two cases? It's not whether the company was right or wrong - the difference was all in how they handled the crisis. Here are five key steps to making sure your company handles a crisis effectively so you'll be around to tell about it next year:

1. Assume that a crisis will happen…to you. You simply cannot wait until a crisis hits to decide you need a crisis plan. Once crisis hits, you lose 80 percent of your effectiveness; the remaining 20 percent needs to be directed at executing the plan to get you out of the crisis. Only with a plan in place can you - and those around you - function without spinning out of control.
2. Get buy-in. Make sure that all key executives who will be involved in crisis response are on board with your plan. Get their input in ensuring your plan adequately covers all the bases. Make sure they know the plan, are happy with it, and are ready to carry out their responsibilities in it. Having everyone on the same page is important to your company's success every day - imagine how critical that cohesiveness is during crisis.
3. Practice. An untested crisis plan is words on paper. From both the operational and the communications standpoints, there's nothing like developing some crisis scenarios and taking the team through them to really know whether you're prepared. By the way, a 30-minute session tacked on to your next management meeting won't quite cut it. This needs to be a well thought-out simulation exercise that exposes strengths and flaws of your plan and your people.
4. Once the crisis hits, act quickly. People will forgive bad decisions; they abhor indecision. Delays in responding operationally or in communications will give them the impression you're either ignoring the crisis or, even worse, trying to cover up. If you're not out in front very quickly, someone else will be - and you can be sure they won't have your company's best interest at heart. Even more importantly, if you're on top of the situation, people need to know that so they can maintain their trust in you and your business.
5. Do the right thing. Companies often end up in a crisis because someone didn't do the right thing to begin with, regardless of whether it was intentional. Don't compound the mistakes. Martha did. Arthur Andersen did. Johnson & Johnson did not. Your reputation and your company can survive - and even flourish - if you're willing to act with integrity and forthrightness. On the flip side, the best public relations in the world can't help a company that's making bad decisions, especially bad decisions meant to cover other bad decisions.