The call came at 8am on a Saturday morning. There was panic on the end of the phone.
“Rod, the warehouse is on fire.”
My first question was simple. “Is it a big one?”
“I think it’s going to be a very big one,” he replied.
My immediate response was clear to me. “Call a mate and ask him to bring a couple of deck chairs and a few beers so you can sit across the road and enjoy the spectacular.”
His reply was no surprise – a single word. “What?”
But my next was just as simple. “There’s nothing you can do about it today. It will probably be the best fire you ever watch. We start tomorrow at 9am. I’ll organise the boardroom.”
People shape the quality of your response
Crises come in many forms and they almost always come from a direction you’re not expecting. When you face them, you typically go through a few stages of emotion: the shock of discovering you’re out of control, the surprise at realising just how big they can be, the adrenaline-filled early response and then…the major point of decision, what will we do?
In the example I shared at the start, the business was in retail with nine very large outlets and tens of thousands of customers. I knew we had good insurance. I knew there was little we could actually do until the fire was over. And I also knew that the owner, while deeply attached to what was going on, had no capability to respond. While he sat with a mate and watched the fire with a beer, I went to work.
The first step was lining up all the people who would be needed the next day to accurately assess the situation, understand its implications and develop a short-term crisis response that matched the culture and strategy of the business. We prioritised three things: documenting our plan, managing communication well and leveraging our relationships. These were underpinned by great professional guidance that resulted in incredible support from our insurance company and all our suppliers.
It was clearly a disaster but a response that matched our culture and strategy – inside our business and with the market – worked. All of the shops opened as normal the next trading day, supported by a marketing campaign that was all about recovery. In this particular case, our customers were unbelievably understanding. Many said they would wait another eight weeks for their goods to be remade and reshipped. We had almost no complaints and even fewer requests for refunds. Our sales actually improved and the business survived – remarkably with a stronger balance sheet than when we started.
Turning a crisis into an opportunity
Larger businesses commonly have documented crisis plans. With the emergence of the digital world, they are becoming increasingly required even for small businesses, at least in relation to managing their data.
Plans are good. Your response network is everything.
Nobody wants a crisis, but they are often the most significant turning points in the history of a business. What few people think about before a crisis hits is whether they have the support structure and leadership around them to respond quickly. What even fewer people consider is that a crisis, imposed on you, can also be an extraordinary opportunity to change culture, re-engage customers, redefine supplier relationships and ensure all the planning you’ve previously done is tested and effective.
When a crisis is imposed on you from the outside – whether a fire, flood or natural disaster; a rate of change outside your business that’s faster than the change inside your business; or simply a human oversight – consider it an opportunity to harness the juicy energies of people who will respond rapidly when at other times they might do nothing at all. I’m not advocating you create a crisis! I am advocating for mindfulness that a crisis can emerge any day and, if one comes, you should never waste it. Whether big or small, the amount of positive change you can leverage from a crisis is determined by your response network – the quality of your leadership, engagement with your advisors, relationships with your suppliers and other stakeholders and support from your insurance company and bank.
You might not want to think about a crisis, but you should. They can lead to a powerful revolution for success.