Leading Your Team out of Crisis

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By James B. Seaton III

 Crises happen every day.  Designs fail.  Money runs out.  Timelines are busted.  Assumptions are invalid.  Investors change their minds.  Partners depart during a company’s launch phase.  Natural disaster strikes.  Suppliers fail to deliver.  Products are insufficiently tested.   Stories appear with your company in the cross-hairs.  What do you do? 

You lead.  You lead your team out of crisis.   

CEOs “own the problem” when they first hear about it.  Delays in addressing problems are highly damaging to large companies (think of Toyota and GM and their failure to rapidly address lingering safety issues, or Target’s delay in reacting to data breaches), but delays addressing more minor ones can literally destroy a young company.  How a CEO reacts to a crisis in its earliest moments can determine the fate of a start-up company.

The first step is to recognize that you have a problem on your hands.  The sooner you acknowledge this, the better.  A range of emotions might be swirling around inside you at the moment.  “I didn’t ask for this.”  “We’re just starting out and we simply want to….”  “But our product will save lives, create a more sustainable world, bring joy to….”  “This isn’t fair.”  And you are so correct on all counts – but it doesn’t matter.  You and your team have been dealt the crisis card and now it is your move.

The second step is to assemble a core team to assess the situation and begin breaking the problem down into manageable pieces.  Remember how one eats an elephant – one bite at a time.  CEOs have to swallow any sense of panic, frustration or fear they may feel, and immediately help their team to triage the issues – to sort out the most critical from the lesser priority one and the non-issues.  It is tempting to hole-up and sort things out methodically and completely, but circumstances frequently don’t permit this approach.  Now is the time to rapidly explore options and to perhaps lead through ambiguity if the nature or scope of the problem is not yet defined.

The third step is to contain the problem and begin mitigating any fallout.  Depending on the nature and gravity of the crisis, board members, suppliers, investors, and the public must be notified.  This is not a time for “spin;” rather, it is a time for presenting the facts as you know them and the steps your team is taking to better understand and resolve the problem.  (Naturally as better understandings are achieved over time, the facts may change, so a balancing act is required to describe what is currently known but also not potentially expose the company to later charges of changing the story).  It is imperative that you accurately shape your company’s story – or someone will tell it for you, with or without the facts.

This is a time to be forthright – to tell what you know and what you don’t know.  A CEO’s job is to balance what legal advisors might suggest.  A CEO must view an issue comprehensively rather than solely through a legal prism – and connect with stakeholders in a way that suggests the company is not simply hiding behind a legal shield, but rather that it understands people are affected and they desire answers, assurances and empathy.  It isn’t always about you and your company, though it may feel that way.  Customers, shareholders and the public might be affected too.  So, know the key messages your team needs to get out.  Ensure those messages are for the real audience (you may feel victimized but you are not the audience) and speak in jargon-free, non-technical language that your audience will understand so you don’t come across as an inward-looking technocrat lacking in empathy.  This is the time to connect with your company team and your external stakeholders.

Naturally a company needs to figure out what caused the crisis, develop workarounds and implement required changes if possible (depending on the nature of the crisis).  Of utmost importance, however, is how the CEO and his or her startup team respond to a crisis at its earliest moments. 

When Things Go Wrong…

  • Be “first with the truth”
  • …but recognize that the initial “word” is usually incomplete or even inaccurate
  • Establish the facts on the ground quickly
  • Establish or regain credibility quickly (don’t “sugarcoat”)
  • Don’t sit on bad news (CEOs answer to their team, the board, shareholders, the public , etc.)
  • Do not portray your company as a victim and don’t point fingers at others
  • Lawyers advise but decision-makers must decide based on a comprehensive assessment, not simply based on legal advice
  • Be Decisive, be Visible and Lead Your Team out of Crisis

 

James B. Seaton III is the International Energy Director for the Houston Technology Center. As a chief executive, senior advisor to leaders of global organizations and Marine Corps colonel, Jim Seaton acquired extensive experience in building teams, focusing organizations on achieving their strategic objectives and leading organizations through crises.