Handy tips on managing a business crisis

In business you’ll encounter a variety of crises, including making losses and exceeding your budget.

There are literally thousands of articles on how to deal with these types of tangible issues, but what happens if you’re dealing with a crisis that involves people?

What happens if an issue arises like someone is harming your reputation, or you’ve made an error of judgement and it’s impacted a business relationship; how can you effectively communicate an issue to manage a crisis within a business relationship?

Here are some helpful hints on dealing with these interpersonal business crises.

How to manage a crisis that is caused by another party:

• Understand the whole situation before acting. If there has been an incident, or a concern has been raised, pause for a moment to collect all of the facts before opening your mouth.
• Don’t play the blame game. In some instances it is pretty clear that the other party is at fault, but pointing fingers and making accusations can be offensive and create additional conflict.
• Don’t be emotional. When someone else makes an error that affects you, particularly if it’s someone you trust, it’s a disappointing, distressing and sometimes a downright infuriating situation, but attempt to remove these emotions when dealing with the offending party.
• Keep it private. The more people you tell; the bigger and worse the situation becomes. Don’t involve additional people in the drama, not only is it unprofessional, it’s damaging. Loose lips sink ships.     
• Be honest and be discreet. You need to be clear about what has happened, how it’s affected you and your business relationship and what you’d like to achieve going forward. When communicating this try to be succinct but be sensitive and empathetic too.  

How to manage a crisis that you’ve caused:

• Admit to yourself that you’ve made a mistake. Also apologise to everyone affected; there is no harm in admitting wrongdoing, but there is in running from it.
• Errors of judgement are what some of the best business decisions are made off. Look at the crisis as an opportunity to take a new approach. 
• Make a plan. Now that you’ve acknowledged your part in an unfortunate situation, you need to take on the responsibility to fix it. Ask yourself: ideally, what would the outcome of this be?
• Don’t be defensive. It is human nature to shut out criticism and to feel attacked in a tough situation. Taking a defensive stance is not only counterproductive, but immature. 
• Keep a record of everything. If you’re in the wrong, you are liable, in some situations, this could mean monetary. Make sure you file documents of any exchange during these times.
• Don’t overpromise. People make mistakes and provided that you do everything in your power to correct yours, you’re doing your job. In the heat of the moment, it can be easy to promise the world to save face and salvage a business connection. It is not necessary (or helpful!).
• Keep communicating regularly. People hate to be kept in the dark and putting up a wall of silence may distress the other party and convince them you’re dismissing the issue.

Amanda Rose connects CEOs, directors, businesses, government and communities on mutually beneficial projects. She is the executive producer and host of The Business Woman radio program.