Crisis Planning for Savvy Business Leaders
Midori was performing Leonard Bernstein’s Serenade for Violin and String Orchestra at Tanglewood. She was in the fifth movement of what the New York Times would call a “technically near perfect” performance of this challenging piece when one of her violin strings broke.
Usually, this would bring the music to at least a temporary end while the violinist went off stage to put a new string on her violin. For most violinists, their performance after such an incident would suffer from the disruption.
But this wasn’t just any violinist. She was Midori. Unflummoxed, she borrowed the concertmaster’s violin and continued her performance.
But wait. There’s more. A short while later, a string on the concertmaster’s violin broke. Midori turned to the acting associate concertmaster and swapped out violins again.
She then finished her performance without further broken strings and to a standing ovation and cheers from everyone. Midori’s professionalism would have been impressive for even the most seasoned performer. But Midori was only 15 years old.
Midori’ ingenuity and resilience, and also a remarkable sense of calm and focus on the present got her through what otherwise could have been a disaster.
Businesses and their management can learn much from Midori when faced with a crisis. With proper planning and training, businesses can navigate their crises as successfully as 15-year-old Midori recovered from two broken strings.
A Crisis’ Impact
Midori’s broken string crisis required teamwork with the orchestra violinists. Although all handled the situation with aplomb, there likely was a surge of adrenaline for Midori and those whose violins she borrowed. The conductor, other orchestra members, and perhaps even the audience, probably also experienced the crisis along with Midori.
Likely, they all felt suspended in time as they waited to see how the crisis would be resolved. Midori’s and the concertmaster’s confident leadership was essential to preventing the crisis from destroying the performance.
Similarly, a business crisis requires teamwork among management, usually senior management, the general counsel, and depending upon the nature of the crisis, other executives. When initially facing a crisis, management may feel a surge of adrenaline. And the business’ employees and customers will feel insecure until they see they can depend upon management’s confident leadership.
It takes a lot of emotional and physical energy to address a crisis. And a crisis can disrupt a business. Therefore, it’s important that management only go into crisis mode when a true crisis exists.
What is a Crisis?
Several years ago, I attended a corporate counsel seminar on crisis management, which included a panel discussion among general counsel. One panelist, whom I’ll call “Jane,” was general counsel for a national restaurant chain, which I’ll call “Happy Fry.” Jane had recently helped Happy Fry navigate through a food safety crisis involving e coli, which resulted in the death of two customers.
The first thing Jane said was “the first step in crisis management is deciding whether you have a crisis.” She continued, “If no one could die or go to jail, it’s not a crisis.”
Under this definition, Happy Fry’s e-coli issue was a crisis because customers had died. Happy Fry’s story is similar to Chipotle’s. The fast casual Mexican chain has been plagued with food contamination concerns. Besides the possibility of serious illness and death, the resulting publicity and concern over the safety of eating at Chipotle and future financial performance impacted the company’s stock price.
Several companies faced crises where someone was in danger of incarceration in the recent college admission bribery scandal. In March 2019, Hercules Capital in Palo Alto faced a crisis when its CEO, Manuel Henriquez, was implicated in the college admission bribery scandal. Hercules Capital swiftly replaced Henriquez. Hallmark Channel acted quickly to terminate its relationship with actress Lori Laughlin after she was accused in the same scandal.
Crisis Planning
These companies may not have anticipated the exact scenarios they encountered. Yet each responded swiftly and appropriately, possibly because they had a Crisis Response Plan (CRP). The CRP provided them with a framework for a reasoned response to likely crisis scenarios, which could be modified to match the specific facts when a crisis occurred.
Every business should have a crisis response plan (CRP). Although a CRP can’t prevent crises, it can provide a pathway for the business’ employees to go on “autopilot” to respond quickly and appropriately when a crisis occurs.
My Crisis Mantras
My mantras when dealing with a crisis are:
“Don’t panic yet.”
“Control the controllable.”
Mentally repeating these statements help focus my attention where it is most useful. Therefore, these two ideas should guide the creation of a CRP.
“Don’t panic yet.”
Panic rarely makes a crisis go better. Plus, the adrenaline rush that comes with panic can cause someone to mislabel a setback that doesn’t involve risk of life, limb, or freedom as a crisis.
For instance, Midori likely was startled by the broken string. Since each violin is different, she may have been scared that she wouldn’t be able to perform well on another instrument.
She could have panicked and believed that life (or at least her promising career) was over for her. If she had, she might have been paralyzed by the need to decide whether to go off stage and put a new string on her instrument or grab another violin. And after she grabbed another violin, she could have let the adrenaline and emotion affect her performance – but she didn’t.
Even when a situation is a true crisis, the CRP can reduce panic by providing a roadmap and clear path to follow. The best CRPs will go a step further. They will include strategies to defuse emotion and panic from the situation, so executives and employees can calmly and deliberately take steps to protect both the business and its clients or customers.
“Control the controllable.”
Time and energy are at a premium when there is a crisis. Good CRPs don’t waste time or energy on things that cannot be controlled or changed.
For instance, Happy Fry’s officers undoubtedly were concerned about the medical condition of sickened customers who were in the hospital. But they were the treating physicians and despite their concern, were powerless to change the customers’ medical conditions.
However, Happy Fry’s officers could (and did) make changes to prevent additional customers from becoming ill. Using the processes in their CRP, they were able to quickly identify the most likely sources of the e coli and remove them from their restaurants.
The Crisis Planning Process
Each business’ CRP must be tailored to that business’ needs. However, most businesses go through a similar process in developing their CRP.
Consider Possible Scenarios.
The first step in developing a CRP is to determine the types of crises the business is most likely to face. In each example in this article, the businesses could foresee the general type of crisis that occurred.
Happy Fry and Chipotle should have foreseen that someday, they might experience food contamination issues. Hercules Capital and Hallmark might not have foreseen the college admission scandal. But those companies should have foreseen that someday one of their representatives might be accused of illegal acts or engage in behavior embarrassing to the business.
Assign Responsibility.
For each scenario, create a response team, and assign a team leader. One individual should be appointed as a point of public for the public. There should be backup team members and a backup leader if the assigned leader is unavailable or is central to the crisis. Each team should have a “game plan” to address the scenario.
Inside of each team, individual members should be assigned specific jobs and responsibilities. The game plan should specify the order of execution of those jobs. Some of these jobs may be executed simultaneously. Others may be sequential and depend upon completion of another “trigger event” before they can start. Regardless, individuals should be empowered to perform their jobs automatically in response to a trigger event.
Preplanned Communication Templates.
The business should create scripts for public announcements and templates for news releases for every crisis scenario, leaving blanks for details. Scripts not only will facilitate clear communication in a crisis but it also may help the team to focus priorities.
Accessible Documentation
Game plans and scripts should be stored in at least two locations, including at least one cloud drive, so that the material can be accessed remotely. The business should maintain at least one version of the documentation on paper or on flash drive since the crisis might involve compromise of the business’ IT system or cloud drive.
Practice.
The business should conduct practice of the response to each type of scenario, including practice modifying the response and scripts for a crisis which isn’t exactly like the one in the scenario. Both the primary and backup team members should practice their jobs. Employees not involved in the response might pretend to be customers, law enforcement, government regulators, or other third parties.
Evaluate and Revise.
After the practice, the business should evaluate the response. The plan should be modified to address any perceived weaknesses. The business also should review the plan periodically and revise it to reflect personnel changes and other new developments.
Develop Your Mantra
As part of crisis planning, a business may find its mantra to help employees maintain focus. The mantra should be easy to remember and repeat. The most easily remembered mantras grow out of the business’ mission statement or core values.
Regardless, all businesses should engage in crisis planning. Businesses that don’t do crisis planning might find that their mantra is “when in trouble when in doubt, run in circles, scream and shout.”
© 2019 by Elizabeth A. Whitman
Any references clients and their legal situations have been modified to protect client confidentiality
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