My Organized Biz

Get organized to prevent a crisis

by Jennifer Hofmann on February 9th, 2008

In small business, there is a tendency to work hard and hope that nothing bad will happen. Taking calculated risks (like skimping on insurance) can lower overhead for a start up until the business is more solvent.

However when a crisis happens in a small business this leaning tower is more vulnerable when under attack and can topple more easily.

Here the Organized Biz perspective on crisis management (and a few opinions, too) that can give you a solid foundation that withstands the unexpected.

Plan for emergencies:

I’m willing to bet that writing a risk management or crisis management policy is right up there with writing your business plan and sorting through that random box of junk in the corner of your office.

But a stitch in time saves nine. If you see what’s happening to other companies the world around you can learn a lot about how to prepare for and even prevent a crisis.

Defining crisis:

According to a great (if dense) Wikipedia article, there are four types of organizational crises:

• “Sudden Crises, such as fires, explosions, natural disasters, etc.
• Smoldering Crises, problems or issues that start out small and could be fixed or averted if someone was paying attention or recognized the potential for trouble;
• Bizarre, like the finger in the Wendy’s Restaurant Chili, a one-of-a-kind crisis;
• Perceptual Crises, such as the long-running problem [with the Procter and Gamble ’satanic’ logo]…”

Write down your plan:

In a crisis you may not pull this out to read it (although it’s recommended), but the actual exercise of writing down how you’d handle these kinds of crises is good planning for your business.

Distribute your plan:

You’ll want to share this plan with your employees and investors. If you’re solo, share the plan with your significant other and people close to you. In case of fire or computer crashes, it’s a good idea give a hard copy to a trusted friend who is off-site.

Even with the best prevention plan, incidents will happen. Perhaps someone spills hot coffee on themselves and decides to sue you. You find out that your imported product is laden with lead paint, putting millions at risk for life-long mental damage. You know, just for example.

If you find yourself in situations like these, use your plan. If you’ve not gotten around to making a plan, get advice and come up with one tout de suite.

Cultivate calm:

Remember that even though there is a crisis in your business, it doesn’t mean your life is ending. It’s important to reach out for emotional support from trusted people and to continue to take care of yourself. Your clients and investors will be expecting you to be strong, and that kind of energy must be cultivated deliberately behind the scenes.

Communicate openly:

If your hard drive or server crashes, for example, tell your clients and investors what is going on as soon as you know. Tell them what your plan is to remedy the problem and how long you think it will take.

When b5s servers were compromised last week, the IT staff was amazingly communicative to bloggers who, in turn, updated their blogs to let readers know what what happening. It can be difficult to communicate via the very system that’s not working, but I thought they did an awesome job - and I know we all learned something from it.

When DreamHost’s servers died, they got some grief for communicating the issue with lightness and humor. While it’s important to take a crisis seriously, keeping your business philosophy and tone consistent with your image can actually be good for you in the long run.

Solicit feedback:

Your loyal customers want to see your business succeed. In a crisis, make it as easy as possible for people affected to share ideas, suggestions, and honest venting about the situation. If you respond compassionately and proactively, it can be very good for your business.

Refrain from blame:

When there’s a crisis, even if you’ve done nothing wrong, it builds credibility and trust when you simply say, “We’ll handle it.”

When your crisis affects others, there’s a temptation to think that the focus is on you. Actually, your customers’ focus is on themselves. If you attempt to blame someone else for the problem, who are they going to criticise? You. Because you’re not focused on them or how the they’re affected by crisis affects.

Have you seen a stellar example of how to handle a crisis? Did a company do something that made them stand out? Jump in with your story.

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POSTED IN: Organize, Systems and structure