Why Should a Small Business Have a Crisis Management Strategy?

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Crisis Management Whiteboard Not only is British Petroleum responsible for an oil leak in the Gulf of Mexico that threatens the ecosystem of the Gulf States, but its CEO, Tony Hayward, has come off looking less than sympathetic. His comments throughout the crisis have indicated a lack of seriousness about this very important issue.

Whether BP could have handled the oil disaster differently or done something more to stop it will be determined in the weeks to come. But the communication that the company has had about the issue with the public and the media have been less than stellar.

You’re probably thinking, what does this multi-national oil company have to do with me? After all, as a small business owner, you’re most likely not going to have to take responsibility for a major eco-disaster. But chances are you have to deal with putting out a lot of little fires, and there is a risk of a larger one that could impact your livelihood.

If you don’t have a strategy for dealing with bad news, now is a good time to give it some thought. Understand that if a crisis does come up, you’re going to have to respond quickly. You don’t have a lot of time to hem and haw about the problem – which is why it’s good to think about how you would manage a problem well in advance of it happening. Don’t ignore media requests for information and don’t fail to respond to criticism in person and online. Even a smaller problem that only affects one customer could snowball if it’s not addressed quickly and professionally.

Whether your problem is selling dinners that caused a few unfortunate folks to get food poisoning, or a setup that makes it hard for handicapped customers to navigate your store and suddenly attracts the attention of local media, you should understand and adopt some basic public relations tactics to come out of any “crisis” as positively as possible.

Make it your ongoing goal to deal with all customers, employees, vendors and suppliers fairly and politely. This is the best way to engender good will and people who will come to your defense in the event of a problem.
Are there industry or community groups who can help in a crisis? Find out if your local Chamber of Commerce has resources (providing you are a member). Know who you can turn to if you have questions.
Understand your legal risks, but don’t let that handicap you. Do you have a lawyer who can help with civil lawsuits? Take some time to sit down with your attorney and educate yourself about what you can and can’t say in various common business scenarios. Know exactly where the line is that you can’t cross, and then do your best to communicate what you can without crossing that line. (If someone threatens to sue you, it’s also nice to hand them a card for your lawyer and end the conversation by asking them to communicate directly with him or her. That may keep a situation from escalating.)
Make sure your employees know exactly what to do if there is a problem. Have a policy for logging customer complaints, both in person and online if possible, so you know what’s going on. Develop a list of people for your employees to call in case of various emergencies.
Know who will speak for your company. Maybe you’re just a little too hot-headed, and you know it. You don’t think you would come across as calm, cool and collected when speaking with a reporter or handling a public inquiry. Do you have a manager, employee or family member who might have media training – or at least a comfort level speaking in front of others – to speak on the record? Having one person do all your talking avoids conflicting statements, too.
Have a plan for bringing on more staff or otherwise covering for you and/or your spokesperson. To handle a big problem the right way, you need to devote time, energy and often money to fixing it. Make sure your business is in good hands while you’re working on the issue.
Don’t assume people know what the facts are. If you’ve had an accident after years of a stellar safety record, communicate that record to media and customers. If you don’t know all the facts, say that you don’t know rather than looking like you have something to hide. Never, ever lie. Someone will find out and the situation will get worse.
Keep on message and don’t ramble off topic when you talk to people about the issue. Don’t bring personal problems or excuses into the conversation. Look at the issue from the customer’s point of view and find out what you can do to help.
Don’t shirk from those who criticize you. Engaging them is a much better strategy. Take phone calls, respond in online forums and talk to customers who confront you in person. Start a blog or post to your existing business blog about the problem and how you’re working to fix it.
Apologize and correct when it is warranted. If you’ve made a mistake, admit it – and do so right away. Tell people you’re sorry and what you’ve done to make amends. Perhaps you’ve instituted new training for your employees, fired a problem employee, changed your store layout to better accommodate customers or put new safety procedures in place. Don’t be shy about letting others know what you’ve done. Put that information on your website, your Facebook page, and anywhere else online that you can. Send out a press release that explains the changes. You’ll likely get positive attention for your desire to make things right.

What do you think?

Thank you, Jennifer, for this timely and helpful post. Yes, you’re right, as small business owners we don’t tend to think about crisis management strategy, but your advice is critical. I will start discussing this with my clients.

— Bill Zipp May 25, 10:31 AM
Appreciate the kind words, Bill. While hopefully none of your clients will ever need such a plan, it’s a good strategy to have one in place that includes all the tools you have available – website, Facebook, etc. – to communicate effectively.

— Jennifer Gardner May 25, 01:48 PM
After managing crisis communications for more than 18 years, I agree with your advice and appreciate the focus on small businesses. Too many people overlook the importance of planning ahead and suddenly find a news camera crew in their lobby when a crisis occurs. Thank you!

— Marcy Eastham May 25, 04:18 PM
Jennifer,
I hadn’t given much thought to this within the context of my small business. There’s been plenty of times I’ve played arm chair quarterback while watching a CEO on TV deal with a debacle. It’s easy to spot a blunder, but takes a little more preparedness to make sure you don’t commit one yourself, when bad things happen. I appreciate the reminder. Nice post.

— Chris Nordyke May 25, 04:26 PM
Jennifer –
This really is a useful post, a true call to be proactive. A great idea to build up tool-kit full of resources, when an unexpected event happens it will come in extremely useful. Great post!

— Jim Ordway May 25, 05:57 PM
I really appreciate the positive feedback. Marcy, with your expertise, I’m really glad to have your thoughts on this. And Chris and Jim, let me know if/when you put together a plan for your own businesses – maybe you could even blog about the process. It’s important to tell other small business owners about the importance of doing this. Thanks again!

— Jennifer Gardner May 26, 12:28 PM