Companies & Industries

How to Handle a Crisis


The best thing is to have a plan of action prepared in advance. That way, you can react swiftly and smartly when a crisis hits

Crisis: A crucial or decisive point or situation; a turning point. (American Heritage Dictionary)

A crisis doesn't have to be defined as one by those outside your organization to qualify as one. If you think your business and your reputation are in danger, then it's time to act, whether the problem is widely known or acknowledged by your employees, your customers, or the media.

Crises by nature are messy, often unfolding at a pace that makes careful and considered response difficult. Sometimes, they stem from unforeseen events, and in retrospect some could have been predicted, but always they present a test of leadership skill and preparation.

Communication Is Key

Crises represent turning points for business health and reputation, often leaving both in tatters. If handled well, though, a crisis response can actually enhance reputation and spur some needed dialogue and change.

JetBlue (JBLU), for instance, struggled to explain itself to hundreds of stranded customers this winter after back-to-back storms managed to bring the discount airline to a standstill. Of course, it wasn't the storms themselves that customers demanded explanations for: It was the failure of JetBlue's management to foresee that its no-cancelled-flights policy would inevitably be at odds with its phenomenal customer growth, as well as the vagaries of weather. Considering the airline achieved its tremendous growth largely because of its customer-friendly reputation, its failure to anticipate such cancellations and plan accordingly became the focus of the debate over what went wrong.

How does a business prepare for crisis, for either the knowable or the unforeseen events that can seriously impact its reputation and bottom line? What should customers, employees, investors, and the general public expect from a business when a crisis hits? Take a look at our Crisis Handling Playbook.

Playing Ostrich Won't Work

At minimum, clear and immediate communication is an antidote. If stakeholders know you're aware that there's a problem, that may be enough in the short run to maintain goodwill until the problem is fixed or at least dealt with. But as a former reporter, I know it's far easier to find examples of poor-crisis communications response than it is to find examples of those who learn from others' high-profile mistakes.

The more common business response to crisis is to say nothing and hope the problem goes away or the public simply isn't paying close attention. In the absence of a full picture of what happened and why, this tactic rarely does anything other than allow the court of public opinion to reach a verdict. A lack of information fuels anxiety rather than defuses it.

Risk communications has as its central tenet the need for some kind of communication with those who are affected by the crisis. There are indeed steps to take and fundamentals to keep in mind as you consider how your business can prepare to deal with its own crises.

Aileen Pincus writes the "Speaking of Business" column for BusinessWeek.com's Managing channel. She is president of The Pincus Group Inc., an executive firm coaching firm that offers training in presentation, speech, media, and crisis communications.

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