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Feb 09

Steps to Effective Crisis Management

Posted by: Steve Marr

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As hurricane after hurricane took aim at Florida last September, the local Salvation Army was forced to mobilize to full crisis-management status. In a nearby state, a fifteen-store grocery chain was sued for alleged health code violations, and the local media grabbed the story, threatening the future of the stores. Because an unexpected crisis can strike your business like a hurricane, you must be prepared as a leader to manage the crisis effectively, or else your company can be threatened. During a crisis, time is not your friend, so you must be ready to move quickly and decisively.


King Solomon wrote, "The plans of the diligent lead surely to advantage" (Proverbs 21:5, NASB). Effective planning is the first step. Steve Dick of the Florida Salvation Army says, "Advance planning is the key for the Salvation Army to respond to emergencies. We keep a current list of all supplies, personnel, and other assets that can be deployed." As the Salvation Army distributed three days' worth of food to provide for emergency feeding in Florida, arrangements were already in place with suppliers to replenish the food lines.

Another key aspect of emergency planning is to decide who in the company should be notified, and when. In one case, federal agents raided a company's office searching for evidence of fraud, and the CEO was not notified until a week later. Also, determine who will speak for the company, to ensure a clear, consistent, and effective message. When a TV crew showed up at one of the grocery chain's stores to do a story on the alleged health violations, the store manager agreed to be interviewed. However, because he was unprepared, he made some erroneous statements and rambled on about irrelevant facts. Unfortunately, that footage made the six o'clock report.

Some threats can be anticipated, and these should be addressed as soon as you receive notification. For example, when the hurricanes threatened Florida, the Salvation Army immediately staged relief supplies and equipment, in order to be ready. When an automobile dealership learned that a newspaper was looking into allegations that the dealer had sold defective used cars, the general manager immediately met with his staff, explained that the pending story was incorrect and unfair, and distributed memos to the sales staff to give them effective talking points to share with customers. The owner of the dealership also called the newspaper and was given an opportunity to rebut the charges. When you see the smoke of a problem, look for the fire, and act to extinguish the blaze, or at least contain it. To demonstrate that the charges were overblown, the dealership chose to open up their books to the news reporter. As a result, the article was far more balanced than it might have been.

Next, assess the situation, as Nehemiah did when he inspected "the broken walls and burned gates" of Jerusalem (Nehemiah 2:13, NLT), and communicate honestly with your team. "You know very well what trouble we are in," Nehemiah said. "Jerusalem lies in ruins, and its gates have been destroyed by fire" (Nehemiah 2:17, NLT). A blunt, honest assessment of a crisis situation is essential. The food store management believed the case would blow over- thus, they chose to ignore the bad publicity. The auto dealer, on the other hand, realized that customer confidence could be shaken, and they took the situation seriously. According to Jeff Jellets of the Salvation Army, "The assessment of a disaster is critical in helping the Army place equipment where it is needed most."

Like hurricanes, events will change-often quickly-during a crisis. Jeff Jellets said, "With four hurricanes arriving, we were constantly repositioning supplies and people. At times we needed to pack up a mobile kitchen that was actively feeding folks, and move that kitchen to a place of greater need. Those were hard but necessary decisions to have the maximum impact."

When a meat processor discovered that a batch of hamburger was tainted with bacteria, it immediately issued a recall. Hours later, they found two additional batches that could be contaminated, so additional recalls were ordered, and refunds were given to all customers. The processor went public, issuing press releases to the media asking customers to return the meat. They believed that customer health was far more important then the initial negative publicity. Their fast action allowed them to get ahead of the problem, and actually improved their public image.

When Hurricane Carl made a sharp right turn, coming ashore at Punta Gorda rather then Tampa as predicted, the Salvation Army needed to reposition supplies quickly to meet the needs. Hurricane Frances was expected to roar ashore as a category 5 storm, but when it weakened, concerns shifted from expected wind damage on the coast to heavy flood damage further inland, again requiring changes in the emergency response plan.

Shortly after the meat packer recalled the tainted hamburger, another processor recalled a similar product. Some customers became confused and returned good products. Immediately, the retail outlets posted signs to minimize confusion, and employees were advised to accept returns even if the product was not part of the recall. Management wisely wanted to avoid customer dissatisfaction.

Take the time to prepare in advance, in case a hurricane-literal or figurative-strikes your business. When a crisis hits, quickly assess the situation, take action, be quick to adjust your plan as necessary, and minimize the damage done to your business.

Steve Marr, Your Christian Business Coach

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