Six Parts to Managing a Public Crisis
Author: Stefan Doering
For the first time in recent memory I found myself yelling at a client last Thursday. He had just finished telling a group of us on his core team that he had been withholding crucial information.
We had been working for months on a very large project here in NYC involving revamping its fleet of taxis. My client had managed to place a bid on the contract, and told us he was one of the top five finalists. And he was scheduled to present to the NYC Taxi and Limousine Commission that week.
I decided to work with him because his designer created the most progressive and greenest taxis I’ve ever seen, and the quality of his team members was strong. I proceeded to open up my Rolodex to some very senior people in the automobile industry, NYC politics and a public relations firm, among others.
I found myself yelling at him when he told us he had known for several weeks that the presentation was postponed indefinitely. The presentation that week is what got him in front of all these people I introduced him to.
Soon after my scolding, things got worse. My client confessed he was NOT one of the top five finalists for the contract for building the new NYC taxi fleet. He was lying!
I immediately shifted into damage control mode with the people I brought into the project.
Dramatic, no doubt. I reminded myself to learn from the lessons of three companies that most likely will become case studies for years to come on exactly what NOT to do in managing a public crisis:
- BP – for their public finger-pointing, disclosing misinformation, gaffs by the (former) CEO Tony Hayward during the Gulf of Mexico oil spill crisis;
- Toyota – for their slowness to respond and denial of the intensity of the problem with accelerator peddles sticking in some of their models that were killing people
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Goldman Sachs – for demonstrating their first priority is to make money for themselves and second priority for their customers during the economic crisis.
Each lacked authenticity, minimized the extent of their problems, and displayed a lack of understanding of the situation. As a result all three companies experienced a rapid decline in their once stellar reputations of only a few months before.
Six Parts to Managing a Public Crisis:
- Take Responsibility – no matter how painful or awkward.
- React Quickly – delay indicates either your lack of understanding or responsibility: neither of which are good.
- Over-Communicate- few can fault you for giving them too much information or too frequently.
- Apologize – as publicly as possible. Make sure you communicate you understand the implications of what you (or your company) created.
- Take Action – outline, explain and implement the corrective measures you will be taking and by when.
- Be Honest – most important is your credibility. If your stakeholders start questioning your ability to lead, your challenges become exponentially more difficult.
In the case of BP, Toyota, and Goldman, where the challenges are so extreme, one cannot guarantee any of this will fix things immediately. But most likely in time, and with some very hard work, they will restore confidence from their customers and stakeholders.
In my case, I completely missed the mark on judging the character of my client. I took action immediately by resigning the next morning, apologized to all the contacts I introduced to him and wished my (now former) client good luck before backing away.
And while it is still possible I’ll experience some backlash, at least I feel good that I have done the best possible, given the situation.
Action Steps for the Week:
When in a crisis, it is easy to lose your focus on what must happen, when and why. Here are some tips you may find helpful:
- Assess the Facts – of what and how it happened, as best as you can. Not your interpretation of the facts. To do this, ask several people you respect that are not emotionally tied in your crisis for feedback.
- Create an Action Plan – contain damage control. The what, by when and by whom. Get feedback on this.
- Act Immediately – showing you are on top of the situation. Remember to communicate, take responsibility, explain actions being taken and to apologize.
And when you are NOT in a crisis, create a simple and solid plan to follow when it happens. List the principles and rules you will follow, who you will reach out to for advice, and what to always do or not do when managing the crisis.
Remember, when playing an UnReasonable business game you are more likely to be confronted with crisis situations as you break beyond where you and others have gone before.
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