One of the unavoidable truths of life is that sooner or later we all go through a crisis, and some of us more than once. This is true for individuals and for organizations. Companies big and small, startups and large corporations, they all experience crises. So, it behoves us to have a solid crisis management procedure, just in case.
Now, don’t misunderstand my message. Companies should still do all that they can to avoid a crisis. For example, use time-tested and proven methods and processes to achieve high-levels of quality in their operations, delight their customers, and treat well and develop their employees. And yet, it’s one of nature’s laws, s**t happens! And, you better be prepared to clean it up, or in professional lingo: manage the crisis.
Why do you need crisis management?
Poor crisis management can have very negative and severe effects for a company and its leaders. First, it can lead to loss in revenue as well as customers. Moreover, it can adversely affect the company’s stock price, reputation and brand image. In many cases, customers can lose trust in the company and its leadership. Such loss of trust can take years to repair, if at all. Case in point, Uber’s scandal in 2017, which resulted in significant loss of revenue and eventually led to the ousting of its then CEO, Travis Kalanick.
And the damage is also within the company. Poor handling of a crisis can cause employees to lose trust in their CEO and management. This has a very negative effect on the company’s performance. I’ve written before on the importance of trust in leadership. When damaged, it’s almost impossible to repair, thus, often resulting in a change of leadership.
The first thing to know about crisis management is that it begins and ends with communication. Of course, you also need to resolve the issue that caused the crisis. But how you come out of the crisis will largely depend on how you communicate with your key stakeholders during that period. Poor communication could make matters worst for you and your company, making the crisis bigger or longer, or both. On the other hand, good communication, can help you manage the crisis more effectively and even come out of it looking better than before.
What is good crisis management?
So, what is good crisis management? I want to offer the following 3 simple rules that I learned from the most experienced people in the field of crisis management: D.C. politicians (US Congress and White House).
1. Get it all out.
Another law of nature is that the truth will always, eventually, come out. Sooner or later, all the facts and details regarding the issue that caused the crisis will be public knowledge. This is especially true in this era of social media and connected world. Case in point, Facebook’s handling of users’ data. Another example is VW’s EPA scandal.
So, from the beginning, make an effort to be transparent in your communication of the facts and details regarding the issue at hand. Provide all that you know in simple, clear, and objective terms. It’s better that people hear it first from you, rather than from other sources. This applies to the public (including the media), your employees, your investors, and your customers. It may not resolve the issue, but it would definitely score you points for integrity and trust.
2. Get it all out on your terms.
The additional advantage of getting it all out first, is that you can do it on your terms and control the narrative. Now, others will have to respond to you and refer to your messages, and not the other way around. You can control the messaging, as well as the channels and timing of your communication. Thus, you have greater influence on the public perception of the situation, you and your company.
A good example is KFC’s UK chicken shortage. In 2018, the United Kingdom arm of KFC experienced supply chain issues that resulted in a shortage of many of its key ingredients and the closure of 900 locations.
In response, the company used its brand marketing channels to make fun of its own misstep. KFC launched a print campaign in which their buckets were labeled “FCK” instead of “KFC” and took to Twitter to engage with fans who were upset about temporarily missing out on their favorite meal.
With ads like “The chicken crossed the road, just not to our restaurants,” KFC helped customers find the humor in the situation and effectively turned the tide of public sentiment. In fact, KFC’s brand impression score gained one point following this crisis.
3. Get it all out immediately.
In crisis, time is always of the essence. The sooner you can come out with your communication of the issue, and what is being done to address it, the better. You want to be the first to inform your stakeholders and public about the problem. As mentioned above, being the first allows you to communicate on your terms, and provide your account of the story.
Moreover, immediate communication gives the impression of being candid and transparent, which in turn creates trust. You and your company will be perceived as handling the situation correctly and with integrity. All are important to maintain customers’ loyalty and employees’ trust.
That said, the communication should not only be fast but also complete. It doesn’t help to provide the information in drips. That can seem like you are trying to hide pieces of information, or that your company is in disarray. The most recent example is President Joe Biden’s mishandling of classified documents. The White House’s poor communication of this matter contributed to the DoJ’s decision to assign a special counsel to investigate the matter, and gave the House Republicans more talking points to portray the Biden administration as incompetent.
Therefore, make sure you have all the pertinent information, and then, communicate it fully and promptly. It’s a balancing act between speed and completeness of information. And yet, it’s better to err on the side of speed, rather than wait indefinitely to have all the information.
You should definitely do your best to prevent crises from ever happening. And yet, we can never control everything in life, so chances are that we will go through a crisis at some point. That’s true for individuals and for organizations, large and small. Therefore, you should also be prepared with a good crisis management procedure. In particular, one that includes prompt, complete, and candid communication.