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The Green Sheet Online Edition

December 26, 2011 • Issue 11:12:02

Crisis management as opportunity

By Dale S. Laszig
Castles Technology Co. Ltd.

The hyper-connected world reacts immediately to everything. News is broadcasted and tweeted at a dizzying rate. Images unsuitable for wide distribution and careless comments that might have passed unnoticed a decade ago are blasted across the blogosphere to the embarrassment of people in all walks of life. But a faux pas, if managed decisively, need not end a career. Mistakes happen. It's how we handle them that counts.

Whether you work for a large corporation or have your own consulting practice, you'll have plenty of opportunities to hone your crisis management skills. There's an art to accepting responsibility for things that go wrong and responding appropriately when someone asks to speak to a manager.

Don't take it personally when a merchant asks to talk to your supervisor. It's a typical response to many situations and a bona fide selling opportunity. Fulfill the request by promptly referring the client to your boss and offering additional support if needed.

Take it to the top

When moving massive, enterprise-scale bloopers up the chain of command, it's best to go all the way to the top. Having a chief executive officer do damage control demonstrates that the matter is being taken seriously and shows the direction the company will take to resolve the situation.

According to leadership consultant John Baldoni, who blogs for the Harvard Business Review, the best way for high-profile leaders to communicate is to:

  • Define the problem. Explanations describe the issue, the initiative or the problem.
  • Define what is excluded. The leader should define exclusions clearly and avoid assuming he or she knows the boundaries of the problem.
  • Define what to do next. Staff need specific instructions regarding next steps.

"Establishing expectations is critical," Baldoni blogged. "Explain what your actions will entail in clear and precise terms." Leaders can also use this process as a challenge for people to think and act differently. Explanations then take on broader significance.

How you say it

In addition to framing the message properly, striking the right tone is important, especially when making an apology. Recent examples include the public apology of Toyota's president, who bowed deeply when expressing remorse for the company's delay in resolving manufacturing issues.

Likewise, Maple Leaf Foods' CEO publicly apologized for shipping contaminated food. The company launched a recall and provided status updates throughout the entire process, boosting confidence in the company's humility and transparency.

How you interview

Over the years, news anchors have become more aggressive in interviews. Anyone preparing for a television interview would do well to rehearse with qualified coaches. No CEO can afford to look like a deer in the headlights when asked the most difficult questions.

Effective communicators exude confidence and professionalism. A marketing department can prepare a public statement; senior executives may contribute their views on how and why things went wrong. None of this preparation will make any difference if the designated spokesperson walks into a meeting or press conference and chokes.

How you manage the public statement

Public statements are most effective when aired immediately following a crisis, before speculation surfaces about a company's lack of response to allegations. Social media postings and full-page newspaper ads are popular ways to apologize for transgressions and disappointments.

As Steve Pendlebury commented on HuffingtonPost.com in February 2010, Toyota was one of many organizations to apologize in ads. He cited two other examples: Domino's Pizza's ad campaign touting its reformulated pizza recipe and admission in commercials that its old sauce tasted "like ketchup" and the crust seemed "like cardboard." And in early 2010, the Chicago Bears football team placed full-page ads apologizing to fans for the team's miserable season.

How you rally the troops

It's customary for a company leader to hold a post-mortem review with managers to dive deep into the root cause of a failure and formulate corrective measures to improve performance and educate personnel. These measures must include a companywide, scripted response. It's better for employees to say nothing than to downplay bad situations, shift blame or try to justify mistakes.

How you learn from mistakes

Economist Paul Romer's 2004 statement that "a crisis is a terrible thing to waste" has become a rallying cry for politicians, executives and academic professionals. Manchester College President Jo Young Switzer recommended going back to basics in the aftermath of a crisis. She suggested posing the following questions:

  • What do we want our organization to look like in 20 years?
  • What mission guides us?
  • What methods work well now to help us achieve our mission?
  • How will we accomplish our work? Do we work in silos, cross-unit collaborations or groupings of friends?
  • How can we redesign old procedures to be more effective (steering clear of repeating ineffective behavior just because we've always done something a certain way)?
  • Are we aggressively learning about best practices at comparable organizations? What do we do when we hear alternatives?

How you follow up

Leaders can't assume messages are heard. The Maple Leaf Foods campaign was effective because of repetition and message reinforcement. And the CEO did more than apologize and walk away.

A summary of the crisis-response basics will help you and your organization recover and move on:

  • Define what the situation is by acknowledging that you're aware of the issue; ask for forgiveness.
  • Define what falls outside the situation by taking appropriate action; resolve to do better through best practices.
  • Define what will be done and what controls will be put in place to prevent similar occurrences in the future. Provide regular updates to show that you've learned a valuable lesson and are a better person or company because of it.

The court of public opinion can be fair and even forgiving when an issue is addressed promptly, honestly and with a modicum of humility. Sooner or later we all do something we regret. Sometimes, the best way out of the hot seat is simply to step up and say, "Sorry, my bad." end of article

Dale S. Laszig is Senior Vice President of Sales in the United States for Castles Technology Co. Ltd., a manufacturer and global provider of smart card, contactless and POS solutions. She can be reached at 973-930-0331 or dale_laszig@castech.com.tw.

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