This year we’ve had to deal with war in Europe, extreme political upheaval and economic turmoil in the UK, inflation at a 40-year high and the potential for the longest recession on record. These events have been added to lingering after-effects of Brexit and Covid, not to mention the underlying existential threat from the climate crisis. It’s a list that’s enough to make any reasonable person want to hide under the covers.
For business founders it’s an extra layer of complexity and pressure at an already intense time. But, there is an upside. There are opportunities in uncertainty and any such uncertainty premium naturally belongs more to startups and founders than established businesses.
While the Truss government was short lived, the focus on disruption and spotting the potential in focusing on new ways of doing things wasn’t misplaced. So, how can founders think differently about crises and be ready to respond in the best way to cope with the next one?
Stages of a crisis
There are three stages of any crisis. Pre-crisis, crisis response and the aftermath. What you do and how you respond at any point requires you to be fully aware of where you are in this cycle. Of course there’s no fixed or ready-made plan suitable for all crises. Reacting and responding well to events is part of the skill. But there is a pattern to how crises develop and there are some general rules or tips for how best to manage each stage.
Before diving into any crisis response plan, it’s worth taking a step back and asking whether the current situation is a crisis at all.
In his 2015 book, Winners, former New Labour press secretary and strategist to Sir Tony Blair, Sir Alistair Campbell, wrote that during his entire time in government he only experienced six genuine crises, despite newspapers declaring hundreds of alleged crises over that time. His definition is “An event or situation that threatens to overwhelm and even destroy you or your organisation unless the right decisions are taken.”
An event or situation that threatens to overwhelm and even destroy you or your organisation unless the right decisions are taken.
The role of perspective
This is a useful starting point. As Sir Alistair has also said, “Don’t just accept you are in a crisis because other people say you are”. This is sound advice, but it has a flipside. When you are in a genuine crisis, the slower you are to react, the worse the outcome often can be. PR people often talk about “getting ahead of the story”, which really just means taking the initiative early on and recognising that things are bad.
The role of planning
This is where having a good risk radar can help. Being able to read the market carefully, noticing how consumers, suppliers, employees, the government, social and mainstream media and industry press are behaving and what they are all saying, is critical. Has staff turnover suddenly spiked? Have lots of key employees all left at once? Is there talk in the press of a new technology that might disrupt your industry? You can never plan for all crises, but you can scenario plan and prepare for the most likely critical events that might turn into a crisis. The earlier you spot a developing crisis the more likely you can act to deal with it.
The role of action
How you respond and act in the face of any crisis is always what determines the outcome. The Covid-19 pandemic was a black swan event for most business leaders, but some acted more quickly and coped better than others. Those that got ahead, acted quickly to set up employees for home working and communicated with customers regularly fared better than those who reacted slowly or hardly at all. Taking positive action can help you, as a leader feel more in control or less helpless and it gives you a reason to engage with others, letting them know what you are doing.
The role of communication
Key in any crisis is the way you communicate with all parties. Number four in the Institute of Crisis Management’s list of 15 principles of crisis management is that “The window of opportunity to manage the narrative of your crisis is short-lived. If you don’t communicate now, someone else will, and it will not be the story you want told.”
Those daily government briefings during the pandemic may have been the televisual equivalent of pulling teeth, but they mattered in helping to establish a sense the government was in control and was doing it reasonably could. Even if people didn’t agree with the actions, they couldn’t say no one kept them up-to-date. Talking openly to as many people affected by your crisis as possible is vital, as it being honest and authentic at all times. Start from the basis of what you would want to know if you were in their position. If there is nothing to say, telling people there is no change is better than leaving a vacuum, which will soon get filled with rumour and speculation.
The role of leadership
Leadership is central to the last two points, but distinct from them. Leadership really matters in a crisis. It is arguably the most crucial aspect of your response. Those affected need to know someone is in charge, and you need to be able to show you are taking personal charge of things. They need to see the crisis has been identified and that people are acting to put things right. Communication is key to effective leadership, but it needs to be backed by action. People will be looking to you, as their leader, to show leadership. They want to know what you are doing to help and how you are going to get them through. Here again, honesty and humility can be powerful. There is no need to pretend you have all the answers, but you need to show you are listening to their questions and are looking for answers.
The role of feedback and future preparation
Phew. The crisis has passed. Now we can go back to what we were doing before, right? Wrong. One of the most important elements of the crisis management process is how you react and respond afterwards. What changes are you making to make sure this either never happens again, or if it does that you are able to manage it better than last time? Most people are fairly forgiving when crises occur - assuming there was no reckless failure on your part - but they won’t forgive you failing to learn from your mistakes. To experience a crisis is to be a business founder, to experience the same crisis twice is to be a business failure.
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