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Crisis Management 101

What do you do when one of your biggest customers takes a complaint public? Or what about the budget shortfall that has launched rumors you’re going to lay off employees? Do those sound like disasters in the making?

Washington, D.C.-based lawyer and crisis adviser Jim Moorhead says they could be if you—like most leaders—are unprepared. “Great companies have an up-to-date crisis plan, a dedicated crisis team and have done mock scenarios,” says Moorhead, author of the newly released The Instant Survivor: Right Ways to Respond When Things Go Wrong (Greenleaf BookGroup, 2012).

Moorhead said his inspiration for the book came from having survived his own professional crises of losing a statewide political campaign and becoming a casualty in a failed startup. He also has plenty of experience helping companies manage crises.

He once represented an investment firm that simultaneously faced a criminal investigation, congressional hearings and a class action lawsuit. While such a scenario could easily destroy even the best company, Moorhead says he helped the firm identify its real threat: Clients might lose faith in the firm and take their money out.

“We helped them reassure their clients,” Moorhead says. First, the company laid low to avoid garnering additional negative media coverage. Second, they invested their clients’ funds outside the company so they could honestly tell their customers, “Your money isn’t at risk.” And, as Moorhead points out, “That’s the key thing people wanted to know.”

But even with the best preparation, Moorhead cautions against flying solo in a disaster. He says that, if they are able to, every company should engage a law firm with demonstrated ability to handle crises, as well as a public relations team skilled in crisis management. And don’t forget your employees are watching, too. “They’ll be reassured,” Moorhead says, “when they see a leader responding quickly, taking their emotions into account and forging ahead with a clear vision.”

Jim Moorhead’s Top Tips for Leading in a Crisis

Think through some common what-if scenarios. “Get prepared before there is trouble,” says Moorhead. “Crises place companies under huge stress.”

Establish how you will immediately provide timely and accurate information to the public, your customers and the press. Moorhead cautions, “Resisting talking to the press or being slow to respond sets you up for negative coverage. You will lose credibility.”

When disaster strikes, “great leaders immediately take control,” Moorhead says. Ask yourself, “What should we do?” instead of, “What should we say?” If you’re being proactive, the answer to “What should we say?” will follow naturally.

Leaders should be prepared to answer the following press and employee questions: Why did this happen? What are you doing to address it? How will you prevent it from happening again?

Be flexible. “Crises produce surprises,” Moorhead says. “So if a strategy isn’t working, pick another course.”

Learn from your mistakes. Once you’ve weathered the storm, do what the U.S. Army does after combat operations and perform an “after-action” report to determine what you did right and what you can do better next time.

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