When I first started coaching basketball at North Kitsap High School 11 years ago, a sagacious veteran coach in the building gave me some sage advice. He said, “Dan, you can expect a minimum of three crises to occur every season. How you respond will determine how successful you are as a coach and a leader.” This advice was not only highly accurate, but also completely relevant to business and life.
At the writing of this column, the past month has given us notable national crises such as the collapse of the Metrodome prior to an NFL game and the shooting of a federal judge and congresswoman outside a Safeway in Tucson. For the small business owner, you may experience a range of crises daily that you or your employees must deal with. As my fellow coach warned me, how you respond will either diminish or enhance your reputation. How you prepare for it will ultimately determine which way the pendulum swings.
Crisis can range from a natural disaster (e.g. earthquake) to flooding in your server room to your top sales person leaving to join a competitor. The best way to determine what exposures your business has is to perform a vulnerability analysis. This entails bringing your team together to brainstorm the areas where your organization can be hurt. There are five key areas to focus on — Property, Liability, Income, Human Resources, and Reputation. The last two are often overlooked because they aren’t normally covered by insurance. They may be the most important.
In November of 2009, Tiger Woods made international headlines for his domestic distress. Many of his sponsors made a quick decision to drop him immediately, while others didn’t. One in particular was very vulnerable — the management consultant, Accenture. Accenture had built their entire branding on Woods. His indiscretions risked the organization’s international reputation. Without hesitation, Accenture dropped Woods like a 2-foot birdie putt within days. Nike on the other hand, stood pat. Why? Because their line of services and market matched what Woods brought to the table and would ultimately be more forgiving. Both organizations ended up making the right decision on a similar exposure.
What does this have to do with you? You face many risks to your business, however your response may differ from someone else’s based on your market, audience, product, or service. Managing crisis isn’t simply following a template you find on the Internet. It takes planning, preparation, engagement, and implementation from every corner of your organization. It must be communicated clearly from the CEO to the mailroom.
Here are three things you can immediately do without cost to improve your crisis management strategy:
This is an extremely simplified version of what you should be doing, however I find that most businesses don’t do anything so it’s at least a start.
Final thought. Crisis isn’t necessarily bad. It allows you the opportunity to lead and may actually enhance your reputation based on how you respond. Case in point is an insurance agency in New Orleans I know that was able to keep their doors open during the flood and serve clients and non-clients alike. In the past five years, they’ve grown exponentially due to their crisis response.
What about you? In the face of adversity, is your business positioned to be a leader or a loser? The answer is in your hands!
(Editors note: Dan Weedin is a Poulsbo-based management consultant, speaker, and mentor. He helps entrepreneurs, organizations, and small business owners to create remarkable results through leveraging the power of relationships. He is one of only 27 consultants in the world to be accredited as an Alan Weiss Master Mentor. You can reach Weedin at (360) 697-1058; e-mail at dan [at] danweedin [dot] com or visit the web site at www.DanWeedin.com.)
