Monday Mornings with Madison

How to Manage Business during a Crisis, Part 2

Word Count: 1,120
Estimated Read Time: 5 min.

In January 2019, Perdue had to recall 68,000 pounds of tainted chicken in a Class 1 contamination of wood in their nuggets.  In July 2018, Kellogg had to issue a recall of Sugar Smacks cereal when over 100 people in 36 states were reported ill resulting in 34 hospitalizations according to the Centers for Disease Control.  By September, 30 more people got ill with Salmonella and the recall was extended.  For these companies, these were crisis situations that required special handling.  But crisis situations are not limited to the food industry.   In fact, it is hard to come up with an industry that hasn’t had a major crisis in the last 20 years… or in some cases the last 20 months… or even 20 days.

Social Media:  Facebook’s mishandling users’ personal information.  Automotive:  VW’s emissions cheating scandal.  Air travel:  Boeing 737 Max Jet’s grounding.  Banking/Finance:  Wells Fargo’s fake accounts.   Technology:  Samsung’s exploding phones.   Healthcare:  Healthsouth’s fictitious accounts.   For those who think “well, all these crises are all self-inflicted, and my company would not do anything illegal or unethical”, consider that there are many more things that can go wrong that are often beyond a company’s control.  For example, Panama City Mall was badly damaged by Hurricane Michael in October, 2018, eventually forcing operator Herndon Properties to close the business permanently.  Now that is a crisis.  Just this month, labor union strikes by British Air pilots forced the airline to cancel all flights, affecting 195,000 customers.  Talk about being in crisis mode.

Of course, some industries have to deal with crisis more often than others.  The pharmaceutical industry, for example, can scarcely go a year without a major issue arising.   In the last decade, the top 19 drug companies have experienced crises that range from international price-setting, illegal marketing, and false claims, to hiding serious problems with their drugs and medical devices, and, in one case even obstruction of justice.   But, even industries that are far less fraught with perils and pitfalls have to deal with crises from time to time.

The point is that, in business and in life, things go wrong.  Some are the result of malfeasance and mismanagement.  But, most are a result of human error, miscalculations, system glitches, and plain old Mother Nature.  Things go wrong.  It happens.  The key is to prepare as much as possible for as many scenarios as is practical, and then deal with the unknowable situations that are bound to arise as best as possible when they happen.  Here are five more best practices for “when the wheels fall off.”

Best Practice 6 - Slow down.  Be more deliberate.

There is a saying among race-car drivers that goes “slow in the cockpit equals fast on the track.”   When applied to business, the idea is that slowing down in the time leading up to and during a crisis can allow a company to get back up to speed after the worst is over.   Trying to move too quickly during a calamity increases carelessness and the possibility of mistakes.  That makes sense since people don’t make the best decisions or have the mental bandwidth to make the best decisions when their minds are on overload and they are suffering from decision fatigue.   Haste can make a chaotic situation worse. Instead, encourage employees to be methodical and careful.  Block out the noise and frenetic energy.  Take deep breaths and relax. Stay focused.  It might seem counterintuitive but this Zen-like approach allows more to be accomplished in less time.  In a crisis, reducing the time it takes to return to normal is invaluable.

Best Practice 7 - Take a break.

During a crisis, it may seem impossible to walk away and rest.  However, a haze of activity acts like a tornado, sucking in more people, energy and ideas into the abyss and raising the level of stress and commotion.  To regain objectivity and composure, leaders must step away.  It also provides an opportunity to think through solutions.  That will likely better serve the organization.  For leaders, short breaks allow others in the company to step up and demonstrate their ability to lead.

Best Practice 8 – Don’t speculate.

As the saying goes, never borrow sorrow from tomorrow.  During an emergency, the worst question to ask is one that starts “what if.”  This expends time and energy considering situations that have not occurred and might never occur.  In the midst of a difficult situation, things are bad enough without adding imaginary scenarios to the mix.  Avoid conjecture.  Such questions only serve to escalate fear and panic.  For example, if a company loses its biggest client, it doesn’t help to start wondering “What if we cannot get enough business to replace that customer?”  Or “What if we can’t make payroll next month?”  Or “What if I have to lay off staff because we don’t have enough work for them?”  Instead of pondering the possible ripple effect of the problem, focus on the problem.  Consider ways to bring in immediate business.  Offer discounts or promotions.  Have staff brainstorm ideas for pursuing new revenue streams that complement the existing services.  Focus all resources and energy on tackling the problem, not worrying about what might happen down the road.  By staying focused and working together, a company can come out of such a crisis even stronger and with more business and diversified opportunities than before.

Best Practice 9 - Take time to regroup.

Problems happen but it is important to not get swept up in unnecessary drama.  Take time to regroup.  Leaders must step up as the voices of reason.  Explain what has happened and what can be done or is already being done to solve the problem.  That calm discussion can help everyone get organized.  A good way to help calm people is to provide nourishment.  Food and drinks will get everyone to settle down even if it is just coffee and bagels.  That’s a good time to assess the situation or give an update and then define clear roles and actions.

Best Practice 10 - Stay positive and smile.

First responders and trauma teams dealing with emergencies keep their cool as well as their humanity.  They don’t dismiss the seriousness of a situation, or lose their focus, but they learn to relax and smile even under great stress.  A positive attitude is half the battle.  A genuine smile is the other half.  The right demeanor can put everyone at ease and allow the “problem-solvers” to focus on the problem without drama.

Ultimately, every crisis presents opportunities to show staff and customers alike the fortitude and spirit of a company.  The key is to deal with the problem, minimize the fallout, and make the most of the possibilities it presents.

Quote of the Week

“Prepare before nasty weather comes your way.  By the time you hear the thunder, it’s too late to build the Ark.” Unknown


© 2019, Written by Keren Peters-Atkinson, CMO, Madison Commercial Real Estate Services. All rights reserved.

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