Remember when electronics giant Samsung was in the headlines for all the wrong reasons in 2016? Its Galaxy Note 7 smartphone overheated and caught fire, creating a safety hazard for owners.
After more than a month of product malfunctions, failed replacement phones, and furious customer complaints, the U.S. Consumer Safety Board forced Samsung’s hand. The Korean-based company announced a total product recall , killing production of the Note 7 altogether. Samsung took a significant earnings hit that year.
Cases like this remind us that leaders may need to react to any number of crises – man-made or natural – that deal with stakeholder or public safety and well-being.
I addressed common reactions and behaviors to crisis that leaders need to avoid in a previous post, Crisis Leadership: Five Deadly Leader Behaviors.
If you find yourself in a major crisis situation, here’s what you need to do.
Crisis Management: Five Winning Tactics
1. Recalibrate mentally. Key audiences such as customers, investors, and employees are looking for true leadership. Speak directly to those affected by the situation with honesty about present actions and future direction. When the water is up to your knees, no one wants to hear excuses or legal-ese. They want to hear your solutions and ideas for minimizing loss and danger.
2. Accept that perception is reality. You must be visible during a crisis. If you’re not, people will assume – rightly or wrongly – that you’re not on the job. In addition to being able to learn firsthand what needs to be done and then making it happen, you can’t buy the kind of loyalty you’ll engender by being out on the front lines with your employees.
3. Stand and deliver. It takes a bold, confident leader to take on a crisis head-on. Take that same bold stance in your corrective and protective actions. Clearly and fully address key issues and concerns. Acknowledge when errors have been made (unintended or otherwise), apologize, and then move forward. Over-correct, if necessary, to protect your reputation and brand.
4. Lead by example. Tough action trumps tough talk every time. But over-penalizing or scapegoating are just as bad as minimizing or ducking in a crisis. Your example should be one of fairness and balance. For example, a number of my CEO clients took voluntary pay reductions when they were forced to do layoffs during the Great Recession of 2008-10 and are doing so again amidst the coronavirus pandemic.
5. Remove those associated with the problem from implementing the solution. Exemplary standards and practices must take precedence over old loyalties and relationships. For example, boards must determine whether current leadership has the credibility and capability to successfully implement solutions and difficult actions. Or is current leadership the problem directly or indirectly?
Of course, these are top-level recommendations. In addition, leaders need to have comprehensive crisis management plans in place for all high-risk contingencies. And board directors need to ensure that top management keeps these plans up-to-date in light of new threats and risks.