Almost every day we are bombarded with headlines about companies running into problems: from data breaches and accounting black holes, through to rogue employees.

These crises affect the great and the good in the business world – and the way a company responds will often define their reputation and legacy.

This got us thinking about the steps a company should take if it finds itself in the midst of a crisis. According to a study by the Economist Intelligence Unit, 75% of a company’s market value is linked to its reputation, which means the way you respond to an issue could make or break your business.

Hopefully you never need to put these tips to use, but it’s always good to be prepared…

1. Admit there is a problem

This is potentially the hardest step to take and will set off in motion a chain of events which, at times, you will have no control over. Think carefully about how you make this initial announcement and try to be as transparent as possible. Customers will often panic and assume the worst if they feel a company is holding back information.

 

2. Appoint an articulate spokesperson

Appoint someone who can make themselves available to comment across all media channels, including social media. If necessary, create a special hotline phone number that people can call for more information. Be open and honest about what has happened, and explain what you are doing to address the problem.

 

3. Keep your clients in the loop

Update your clients on the situation as much as possible – even if it feels like you are over-communicating. Whether you are telling them good or bad news, they will appreciate the effort that is being made to keep them in the loop. Ultimately, you may find that the crisis strengthens the relationship you have with your customers.

 

4. Keep your staff informed

When a crisis hits, people who work in a business can often feel like they are the last to know. This can create confusion and cause unnecessary angst. Depending on the nature of the crisis, you might consider restricting employees’ social media access to prevent them sharing information inappropriately.

 

5. Create a contingency plan

Ideally, your firm will have prepared a contingency plan long before a crisis hits. Most firms have a documented action plan that includes practical details such as essential telephone numbers, key facts about the company and details of where staff should meet if the workplace is inaccessible. Is yours up-to-date? Often these documents are created and then put to one side, and when it comes time to use the information it’s inaccurate or out of date.

Phil Hall former editor of the News of the World newspaper and now chairman of PR Agency PHA Media recently said:

“Stories have the ability to spread faster than ever through various online platforms and will no longer simply become ‘tomorrow’s fish and chip paper’. After this initial surge in reading and subsequent sharing, these stories will forever remain online. They are often the first thing you see when searching for an individual or company, which leaves reputations in tatters long after the stories are published.”

Hall concludes: “The best way to protect your company’s brand or your own image from a crisis is to prepare for it. If you find yourself in the media spotlight as the result of a mistake, error, false allegation or accident the chances of avoiding a full-blown media storm are greatly increased if you have a full and robust crisis communications plan in place.”

 

6. Learn from the experience

Sometimes it is the negative experiences that really shape our thinking. Surviving a business crisis is no different. Once there is light on the other side of the tunnel, gather the team together to discuss what you have learned from the experience. For example, is there anything you could have done differently? How can this crisis shape the company’s strategy in the future?

The good news is that history is littered with companies that have not only survived crises, but have gone on to build strong businesses which stand the test of time.

 

An adviser’s perspective

If you are in the process of selecting a DFM, you could incorporate the following questions as part of your due diligence process: “Can you share your disaster recover plan? and “What is your approach to communication during a crisis?”. The DFM’s answers should provide you with some insight into their approach and will also shed light on whether they have experienced a crisis before and how they approached it.