10 Crisis Management Lessons From Business Leaders

Being a leader means you have to make tough decisions. And the repercussions of those decisions can sometimes be disastrous for your organization. A crisis can make or break your company, depending on how you respond to it. 

Whether your company has suffered from a PR nightmare, been involved in some kind of scandal, or made a mistake that has affected customers, reputation management is key when it comes to recovering and moving forward after a crisis. 

Crisis management is about minimizing the impact of any unexpected event that could harm your reputation. It involves having an emergency plan in place so that you’re able to react quickly and effectively when something goes wrong.

Ideally, this will also involve setting up measures beforehand so that if a potential crisis arises, you know exactly what steps need to be taken in order to mitigate the damage as much as possible. Let’s take a look at some of the tips and tricks successful business leaders have given us when it comes to handling all kinds of crises with poise and grace.

1. Take Action Right Away

No matter what action you decide to take, act quickly. It’s better to act too soon than to wait too long. Make sure to get all the facts before you make a move, but don’t wait too long to put a plan into action. Your customers and stakeholders will appreciate your quick response.

“Many times, the best defense is fast action. As soon as you find out about the crisis, take immediate steps to protect yourself and your organization,” says Lina Miranda, VP of Marketing, at AdQuick.

“As a leader, my team expects me to be decisive and have a plan of action ready. That’s why it’s important to get ahead of the crisis and develop a response plan before you need it,” adds Lina Miranda, Chris Gadek.

2. Establish a Chain of Command

This one will depend on the size of your organization, but you should designate a few key leaders who are responsible for certain aspects of the crisis. 

For example, one person is in charge of PR, one is responsible for financial issues, one is in charge of internal communication, etc. Make sure everyone is on the same page and has a task to do.

“After we had our first dust-up during the company’s early years, we found out really quickly that we needed to have a clear chain of command and specific roles for people during a crisis,” says Omid Semino, CEO and Founder of Diamond Mansion. 

“It was really helpful to have someone focused on each key area so we could all work together but not step on each other’s toes.”

Do you have a chain of command in your company? If not, set aside time with your team to establish one. Doing so will ensure clarity and calmness if calamity strikes.

3. Communicate Is Key

“The biggest mistake you can make during a crisis is to not communicate,” says Ryan Delk, CEO of Primer. “My team and I know that we can count on one another to be open and honest about what’s going on, both good and bad. This way, we can make the best decisions for our company.”

Make sure you have a clear line of communication with your team during a crisis. This means being available to answer questions, give updates, and provide clarity. Doing so will help everyone stay on the

During a crisis, it’s important to keep all of your stakeholders in the loop—this includes employees, customers, investors, and the media.  

Dr. Minhas, Founder and CEO of GerdLi adds, “One of the things we learned early on is that if we’re not communicating, people will make up their own stories.”

Don’t let this happen in your company. Make it a point—or even a rule—to communicate clearly and directly, especially during a crisis.

4. Be Transparent

In today’s world, people expect organizations to be fully transparent. Don’t try to hide anything, and be forthcoming with information from the get-go. Share what happened, what steps you’re taking to rectify the situation, and make sure the public knows exactly what went wrong. 

Transparency helps build trust with your customers and stakeholders and can go a long way in making them feel like you’re handling the situation properly. 

It’s important that you act right away. Give your customers as much information as possible; give them updates on the situation every few days. Make sure to include the facts, and don’t get emotional, as emotions can quickly complicate the most basic of decisions.

5. Don’t Try to Put a Band-Aid on the Situation

Trying to cover up a crisis instead of dealing with it head-on will only make matters worse. Your customers will know if you’re trying to cover up something, and they’re going to be upset when they find out the truth. 

Not only that, but if you try to put a Band-Aid on the situation, it’s likely to fall off at the worst possible time. That’s why it’s important to deal with the situation as it is, learn from your mistakes, and move forward.

“I think it’s human nature to try to downplay bad news,” says Eric Elggren, Co-Founder of Andar. “But when you do that, it just makes people more upset because they think, ‘Why didn’t you tell me this was a big deal?’ Being open and honest is always the best policy.”

6. Keep Your Customers in the Loop

Customers have a right to know what’s happening. You should be transparent about the situation, but you don’t have to share the details or the facts of the issue if it’s ongoing. You can keep your customers informed about what’s happening without giving away all the details. You’re still being transparent, but you’re also respecting people’s privacy.

“If there’s one thing that customers hate, it’s feeling left in the dark,” says Brian Munce, Managing Director from Gestalt Brand Lab. “During a crisis, customers want to know what’s happening, what you’re doing about it, and how it will affect them. My thought is that they are going to find out eventually anyway. So why not just be upfront and honest with them? It shows that you’re responsive and care about their experience.”

7. Assume Responsibility

It’s important to admit that your company made mistakes and that you’re responsible for those mistakes. Don’t try to make excuses or shift the blame. If something has gone wrong in your organization, take responsibility, apologize to those affected, and give them a timeline for how you’re going to rectify the situation.

“As a business owner, it’d be really easy for me to say that the failure was someone else’s fault. But at the end of the day, it’s my responsibility,” says George Fraguio, Vice President of Bridge Lending at Vaster. “I’m the one who ultimately has to sign off on everything that we do.”

Customers usually appreciate a leader who owns up to their mistakes and is willing to work to make things right. In fact, taking responsibility for your actions can actually help build trust and credibility with customers.

8. When a Crisis Hits, Know Your Value Props

During an emergency, your company’s value props are likely to come into play. Value props are the reasons your customers like your company. For example, your company uses sustainable practices for its products. You can use these value props to help you get through a PR crisis.

“We have a responsibility to communicate our values and how they help us weather the storm,” says Drew Sherman, VP of Marketing at Carvaygo. “Our customers appreciate that we are focused on the long term.”

9. Pay Attention to the Triggers of Your Current Crisis

This one is pretty straightforward. You need to figure out what caused the PR nightmare in the first place so that you know how to prevent it in the future. 

If a product is faulty, make that product safe. If a customer is upset, make sure they know how you’re going to fix the situation. Make sure everyone in the company knows what happened and what needs to be done to make sure it never happens again.

“Every business experiences some form of turbulence,” says Ryan Azimi, Director of International Development at ETIAS. “But it’s important to be aware of the warning signs that a crisis is about to happen. This will give you a much-needed edge in managing the situation.”

10. Be Prepared to Make Changes

This is a worst-case scenario, but if your company has suffered a PR nightmare that you can’t recover from, you may have to consider making changes to your business. Businesses make mistakes and have PR nightmares, but what makes the difference is how you manage those situations. If you’re prepared for a worst-case scenario, you’ll know what to do if something goes wrong.

“It’s not totally unreasonable for a company to have to overhaul everything from their image to their CEO,” says John Sarson, CEO of American Crypto Academy. “If you can’t rebound from a PR crisis, maybe your company needs to be organized.”

Conclusion

When a crisis hits, it can feel like the world is ending. But as these business leaders have shown, there is always a way to come out on top. By being prepared, staying calm, and making smart decisions, you can weather any storm.