IT SEEMS THAT hardly a week goes by without news of a scandal hitting the corporate world. Whether it is a matter of shady management practices, diversion of funds to unauthorised accounts or plain corruption, it makes a fascinating read for anyone not directly involved in the scandal.
However, for those caught up in the crisis, whatever their role may be, it is likely to be a life-altering experience. Careers, reputations and livelihoods are all at stake.
In dealing with the situation the organisations concerned can rise to the challenge or succumb. Their leaders, too, can either win laurels or gain notoriety.
What often makes a difference when weathering a corporate storm is how information is managed. Generally, the person or team with the most accurate and up-to-date information is likely to come out ahead.
Therefore, if a crisis hits, a leader should first ask questions, starting with: “What do we know?” This helps to separate fact from fiction, isolate rumours and prompt experts to think about the options. It is then possible to work out the best- and worst- case scenarios.
As part of this process, every time someone provides new data, ask about the source. If they suggest certain solutions, question their logic and the possible outcome. Ask for precise answers which add value to your information.
Although not exhaustive, the following are some of the essential questions a leader should be asking.
Are we adding fuel to the fire? A crisis usually results from something specific. For example, it might be a government report warning about the danger your products pose to the health of consumers. Before taking any action, consider whether the response you are planning is the right one. Recalling a product may make sense if someone has been seriously injured. In other circumstances, it may be an over-reaction and may just add to the problem. In fact, sometimes it is better not to react at all. Therefore, always include the “do nothing” option when assessing a difficult situation.
Can friends help us? At times you need to go in with all guns blazing. There may be no other way to take control of the situation and get things resolved. However, there are times when it is best to let someone else take the lead. An industry association, government agency or even a competitor may have more of a vested interest in taking up the case. If so, they could be better prepared and more convincing in their public statements. A crisis may not be yours alone. It is likely that others are also in the same boat. So be ready to let them take the lead when it is in your best interests to do so.
Who is most important? In the heat of the moment, take a step back to see whether you are spending your time and effort to good effect. Some audiences, such as disgruntled shareholders, employees facing redundancy or lobby groups, will never be satisfied with what you say. In such cases, decide on the priorities. There is no point antagonising a major stakeholder by giving undue attention to the needs of a vocal few.
What are our guiding values? The way you handle a crisis shows a lot about the company’s core beliefs. Before taking action, think about what you stand for and ensure what you do is consistent with the brand. If the organisation espouses family values and customer care, make sure your response demonstrates or reinforces these values.
Are we in control? This should be the first question you ask every day. Of course, there is no reason to assume that you are in control just because you are the centre of attention. Exerting control needs composure and planning.
During a crisis, it is important to review what you can change, stop or initiate with the aim of turning things around.
The answer to these questions will help you take control. Then you can move to the next level and decide on the best time to act, what to say and how to deliver the message.
Are we being paranoid? Obviously, if your company is regularly making front-page news for all the wrong reasons there is a good reason to be concerned. However, no organisation can expect to avoid a certain amount of criticism. Therefore, do not get paranoid about every minor crisis. The last thing you want to do is create a major problem unnecessarily.
How will we handle the reaction? Think about how people will react to whatever you say and try to anticipate their questions.
You should give consideration not just to the people directly affected, but to how competitors, the media and investors will react.
The best strategy is to decide in advance what is worth fighting for and what is not.
How should we use the lawyers? In times of crisis, lawyers can be called on for advice but they should not be allowed to make the final decisions.
Listen to their advice to make sure you are on firm legal ground and understand any issues relating to liability.
Many companies first react by denying responsibility or negligence when something goes wrong. But corporate cover-ups seldom succeed in the long run. So, even when things look grim, honesty is usually the best policy.
During a crisis, a leader should ask the right questions at the right time. That is the best way to come to grips with the situation, and this makes it possible to apply knowledge and insight before determining any action.
Nothing guarantees success, but the chances improve if you go through a process that assesses the facts and encourages critical thinking.
Often, the way a leader deals with a crisis is what makes the winner stand out from the rest.
TIPS TO WIN
A matter of time
In any crisis, time is of the essence. Every minute counts, so do not make the mistake of following standard operating procedures used for day-to-day business. This approach just won’t work because there is no staff handbook or user manual for handling an unexpected crisis. However, for a leader, there are some clearly defined steps to take. First, you must communicate to all interested parties the fact that there is a problem. You must show that you are fully aware of the seriousness of the situation, are in control and taking appropriate steps. By doing this at the outset, you will demonstrate authority, buy time and gain the support of the people around you.
Control and power
Control is the ability to start, change or stop events. During a crisis, you can still control many things. These include making any statement, the agenda of any meetings, the priority given to specific issues and the amount of information disseminated. You also have control over your own actions, plans and emotions. Power, on the other hand, is your ability to influence any outcome. It largely comes from knowledge, precedent and an understanding of your stakeholder’s needs. For any leader, it is best to have both control and power, though this may not always be possible. If that happens, remember that the more you can control any situation, the more likely you are to achieve the desired outcome.
Even when a crisis abates, a leader cannot switch off. There is a need to conduct a thorough debriefing session to identify the reasons why the crisis occurred. These may turn out to have been genuinely unforeseeable or beyond your control. However, careful analysis and detailed follow-up often reveal that vital clues have been missed along the way. Take the opportunity to make improvements, and review what worked well and what you would now do differently given the chance. However, don’t second guess yourself with the benefit of hindsight. You should upgrade internal processes, though, so that you are better prepared to handle a crisis if it occurs again.