Surviving Your First Business Crisis
You think your business is doing great. You’re making money, networking and growing your business.
You’re hit with a business crisis that knocks you flat on your back. The kind of crisis that could easily cripple your business.
And you would be delusional to believe that your business won’t have a crisis. Any business that survives past the first few years will inevitably have a crisis. You are not immune because it hasn’t happened yet.
My first major crisis was when a competitor broke into our business and stole our client files in an attempt to steal them away from us. So I understand challenges. We’ve also been audited (our accountant went to jail) and somehow survived the recession when our profits were cut in half (probably more than that but it stresses me out to think about it).
Scandals can turn your loyal customers into your worst critics, so how you manage a crisis matters. Here are a few tips to outlive and outlast your first business crisis from someone who has been in the trenches and climbed back out.
Henry Ford and Harvey Samuel Firestone started a business partnership over 100 years ago. But in 2000, their companies had a very public breakup brought on by 200 deaths and over 700 injuries from faulty Firestone tires on Ford vehicles. Squarebox author Peter Mackinnon describes the scandal like this:
“What ensued was the most uncomfortable game of corporate blame table tennis ever witnessed. It went something like this:
Ford executive: ‘Firestone did it.’
Firestone executive: ‘No, Ford did it.’
To this day, neither side has taken responsibility for what happened. Some of that is legal reasons, but the public damage from blame-shifting can be significant. The public fully understands spin (we hear it every day from politicians) and we know that companies fear
To this day, neither side has taken responsibility for what happened. Some of that is legal reasons, but the public damage from blame-shifting can be significant. The public fully understands spin (we hear it every day from politicians) and we know that companies fear backlash.
Unless you are under court orders to not publically admit your guilt (if your crisis involves a lawyer, this applies to you) tell the truth. Admit what you did wrong, and more importantly, explain what you’re going to do to fix the problem. People understand that mistakes happen and will appreciate your attempts to own up to whatever you did and your commitment to making things right.
In Can Your Business Survive Your Personal Life?, I shared the story of how crippling the loss of my niece was a few years ago. It wasn’t just my life that was shattered – it was my entire family’s.
Having been through other tragedies before, I already had an emergency plan in place. I knew what my next step was because I had already planned for a crisis like this:
“We all have days when we are horribly distracted, completely stressed out, and feel like we are drowning. No one can escape life’s challenges. Instead of hiding under the covers, create a crisis plan for your business. Maybe you’re not feeling this way today, but you never know what may happen tomorrow.”
Both your personal and business situations are completely unique. No one knows what you need better than you. Your first business crisis could be anything and you can’t plan a contingency plan for every situation. But you can create a plan that would help guide you through the first steps of surviving whatever life throws your way.
Here’re a few examples:
- Get the right insurance (consult with a professional)
- Know exactly who to call in cases of emergencies
- Have a trusted advisor (for example, someone who knows how to handle crises on social media and can advise you on what you should and should not do)
You know where you’re most vulnerable and what kinds of crises could impact your business. Do everything you can now to prepare for any situation your business may face.
Think Before You Act
Once upon a time, there was a competing business that was trying to wipe us off the face of the earth.
On a personal level, I was angry and frustrated. I wanted to retaliate because it would have been very satisfying to fight back. On a business level, I knew that strategy wasn’t going to do us any good.
I had to take a step back and not go with my gut instinct (even though I really, really wanted to). Instead, I had to stop and think before I took any action. In the end, we fell on Michelle Obama’s now-famous phrase: “ When they go low, we go high”. The competitor closed not long after that because of their negative actions. Karma actually worked!
It’s very easy to make snap decisions when you’re in the middle of a crisis. Your emotions are swirling around which can impact your ability to make the right choices. Take a step back – breathe – before you make any major decision that could impact your business’s future.
And lean on your trusted advisor to be honest with you if you’re doing the right (or wrong) thing.
Surviving the Unsurvivable
It feels incredibly overwhelming to be in the middle of business chaos. It dominates both your professional and personal life. It can seem like everything is crumbling around you…
My business almost died during the recession. While many other businesses around us closed, we simply rolled up our sleeves and found new profit streams. We downsized, streamlined and adopted a minimalist business approach to everything.
Because a crisis can teach you new and important lessons that will help your company become stronger. It can open doors you never thought possible. Many businesses have overcome huge obstacles and gone on to exceed their wildest expectations.
And yours can too.
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