Three things to do for when it hits the fan.
Sometime, you are going to screw up. It’s a fact. Your business model may be flawed, an executive may do something illegal or immoral, your investment hypothesis may be drastically flawed. This will cause your revenue to go down, equity value to sharply react, and anxiety levels to rise.
Or, you will have a situation like what has happened with COVID-19, where the global supply chain is drastically disrupted, and small businesses are left financially exposed, and the whole world will be struggling.
In these situations, your employees will be anxious, investors will be anxious, and your board of directors will be anxious. Add in media attention, and anxiety will turn into everyone losing their minds.
So, what do you do? How do you increase trust? How do you put their minds at ease?
1. Create a thorough plan
In these situations, people want security. While you have to move fast, you also have to be extra thorough to provide that sense of stability and security that people are looking for.
At a minimum, your plan should say the following:
- This is exactly how we were affected, and how we expect to be effected in the next year. Include industry benchmarks.
- Here’s what we are doing to solve the problem, how much it will cost, who the key players are and their responsibilities, financial projections, strategic partnerships, communications planning, etc. List out steps to solve the issue.
- Here’s where we expect to be once this problem has been solved. again, include analysis, financial projections.
Distribute your plan openly, and hold a forum for employees to vent, ask questions, pitch ideas, etc.
2. Be transparent
Many people panic when they don’t receive enough information from their leaders, or when they receive conflicting information. It shows them that their leaders don’t know what to do.
So, tell your stakeholders exactly what is going on. Be blunt, then build trust by telling them what you are doing to fix it. Chaos helps only those who are self-serving (in which case you should consider dismissing them). This is the formula:
Honesty + Action = Increased Trust
3. Keep them updated
Monthly, you should keep your employees on what is happening with your initiative. Again, be honest. They don’t need a State of the Union address where it is always going well.
If you have to give them bad news, let them know what you plan on doing to solve the problem, tell them how you are adjusting the plan, or how you are modifying your actions to achieve the desired goal. I have found leaders are generally pretty good at doing #1 and #2, but terrible at #3.
People need reassurance; they need updates. We love to know how things are going when they apply to us. So, tell them. Let them know if you will have to lay people off so they can plan accordingly. More importantly, let them know that they are safe and that your plan is progressing.
At the end of the day, Crises are super tricky to handle. They are delicate matters, and your stakeholders will be anxious and agitated. Put their mind at ease by being Thorough in planning, swift and transparent in execution, and reassure them along the way to your goal. The last thing you need to do is make sure you’re ready if it happens again.