Like insurance, crisis management is something we often don’t think we need…until we do. And unfortunately, while a crisis cant be predicted, you’re almost guaranteed to eventually face one. When you ask people to name the biggest crisis our nation has faced, 99 percent of us would say 9/11. But others would inevitably come to mind: natural disasters like those in Oklahoma or New Orleans, violent acts such as the Newtown or Boston tragedies, or national woes like unemployment or the housing bust. If you get more personal, each of us has faced individual life crises of varying degrees. It’s how we deal with those disasters that makes all the difference. Do we lay down and give up, or do we soldier on and find a way to overcome the situation?

In terms of business, nothing could be more true. When faced with a career or company crisis, the actions we take in response can make or break us. Whether you’re a big wig at a large company or the leader of a small team, you’ll eventually need to manage a crisis. Crisis management is paramount when situations arise that may risk your (or the company’s) reputation, jeopardize revenue, or significantly detract from operational productivity. When the stakes are high, time is of the essence, and careers are on the line, you’re in crisis mode…and it’s time for a WOW leader to step up and manage it.

Typically, like any national or personal crisis, a business crisis comes about quite suddenly and will more often than not catch you off-guard and take you by surprise. As swiftly as the crisis swoops in, decisions need to be made to offset the fallout and deal with the repercussions. The faster a leader responds to an unforeseen crisis, the more secure the team will be and the more likely they will be able to recover and rebound from the situation.

Since it’s impossible to gauge the effect a crisis will have on a business, skilled crisis management becomes vital. If a crisis is not managed correctly, or not managed at all, it could have a deleterious effect on morale, performance, and the business as a whole. And while it seems obvious that leadership needs to take the reins in times of trouble, some companies are rendered helpless when a crisis hits. Some cant–or don’t–handle the rough waters in a WOW manner. But why?

The classic, textbook crisis management case cited by all business schools is Johnson & Johnson’s handling of the Tylenol Crisis in Chicago. If you recall, 7 people died in 1982 after ingesting cyanide-laced Tylenol capsules. While the act was criminal, and not the doing of the manufacturer, it was certainly a corporate crisis for the makers of the drug. The way in which the situation was handled directly impacted the future success of the brand. With Tylenol still lining drugstore shelves, the bottom line is, crisis management saved the day.

However, not all companies have taken a page from the Tylenol book on crisis management. Here’s a few reasons why companies fail at crisis management:

• Attitude: A positive attitude is one thing; but ignoring the possibility for disaster is negligent. The over-confident attitude that a crisis would never affect your team, company, or product marks an obvious shortcoming in the ability to manage one when it happens.
• Lack of Planning: In school, fire drills and lock-downs are practiced in the event disaster strikes. A plan is formulated and simulated in advance so everyone knows their role. Crisis management procedures need to be considered, planned, and made a priority well before a crisis presents itself…or the ball will certainly be dropped.
• Ignoring the Risks: All business has risk. If you don’t recognize and identify those risks in advance, you wont be ready to handle the fallout in the event the worst happens.
• Blindness: Turning a blind eye to an obvious crisis, and hoping it goes away on its own, is a mistake made by weak, ineffective leaders. Crisis blindness leaves everyone floundering and trying to find their footing, with no one to lead them through the darkness.
• Indecision: Taking too much time to act on a crisis can compound the situation. When leadership is halted with indecision, and no response or direction is dictated, things start to unravel quickly.
• Communication: The details of a crisis need to be openly and clearly communicated internally as well as externally (when applicable). Communication needs to be transparent from the top down, or rumors and false information will exacerbate the problem.

Succeeding at crisis management is often synonymous with succeeding as a business or a team. Those who fail to lead effectively during a crisis may be sealing their own fate as well as that of those they lead. Always assume you’ll need crisis management at some point, and plan accordingly. If a disaster strikes, make quick, thoughtful decisions and react with open, transparent communication on all fronts. Never ignore a crisis or try to sweep one under the rug. Deal with disasters honestly, openly, and with a caring, responsible approach, and you’ll lead your team through the storm without sinking the ship.

–Sheri Staak