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Published on May 18, 2001

How will you respond to a crisis?



QUINCY, Mass. (May 18, 2001)—Every company faces crises that have the potential for doing damage to its reputation, image, and financial stability.

What might have been seen as minor or even gone unnoticed a few years ago now may wind up on the evening news and in the local newspaper.

Businesses today need a crisis response policy, a carefully crafted understanding of how they will react to a potentially damaging situation. The basic elements of such a policy might include the following guidelines:

Take the situation seriously. More often than not, management is caught off-guard when a crisis arises. When this happens, the potential impact is downplayed–sometimes with disastrous results.

Don't assume it will go away. Although it is normal to believe that the dark cloud will pass without causing a storm, playing the “let's sit tight and see what happens” game only exacerbates a possible problem. Problems don't go away. As both Ford Motor Co. and Bridgestone/Firestone Inc. discovered, difficulties often only get worse. The longer the delay, the more suspicious and doubting the press and the public become.

Respond quickly and decisively. Russia's failure to act quickly in the Kursk submarine disaster cast doubt upon its leadership.

Prepare thoroughly. Shooting from the hip is more myth than reality. A good dose of reality is preferable when it comes to dealing with the public, the press, employees and stockholders. To put it clearly, people who do not prepare thoroughly, get caught.

The first rule is to put your position on paper then have it critiqued. If it doesn't hold water among friends and associates, it certainly is going leak outside. Ask yourselves: “Does it contain all the facts? Are we withholding information? Are we being straightforward or are we putting a spin on it to avoid responsibility?” And, of course, the most important question of all: “Will average Americans believe us?” If not, you're not prepared.

Talk to the press. Don't try to hide. And don't hide behind a “spokesperson,” either. Put the top person out in front. Be candid and open, and if you can't answer a question, say so. “I'll get that for you” is all that's needed.

Tell the truth. If you goofed, say so. Don't try to cover it up. The president of a large bank called a marketing consultant and said, “Tomorrow the Justice Department will announce that it's fining us $50,000 for improper cash transactions. What should we do?” The consultant's recommendation: “Tell the truth.” At the next morning's press conference, the bank president said: “We made a mistake and we have taken steps to make sure it never happens again.” That's exactly how it was reported in the press. The story died.

Go all out to make an impact. A car dealer believed his company was suffering a sales slump caused by rumors that the dealership was in financial trouble and about to fold. It appeared the situation was being abetted by competitors conveying that message to customers.

The dealership held a press conference to announce that its management team had become shareholders in the business and a leading bank was extending a significant line of credit. Representatives of the auto manufacturer and the bank also were on hand to speak. The press coverage that followed laid to rest any suggestion the company might be in financial trouble.

These guidelines are lessons every company should take seriously. There are no exceptions. It's possible to get lucky, of course. But it's a mistake to take the chance. Potentially troublesome situations need not be disasters. An open mind and willingness to be straightforward can turn lemons into lemonade.

Mr. Graham is president of Graham Communications, a management consulting firm in Quincy, Mass.


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