Managing a business in a crisis
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There are many reasons why businesses go bust. Poor management is only one of them. I have seen a high-tech business that has much potential and a superb team of people working in it, heading for the rocks. The leader lost his sense of direction about eighteen months ago and started making mercurial decisions. I do not know what his objective was but it seems he thought by displaying enough creativity everything would come right. Mercurial behaviour causes crises, it does not prevent them.
I have much sympathy with this man who entrepreneurially set out to build a modern business. When things go wrong it is tempting to try outrageous solutions if only to relieve the monotony of the day to day pressing cash flow and insecure staff problems. Those at the heart of a business crisis have a belief that only they know how bad things are and they should at all costs try to avoid others knowing. This is a mistake.
Rumour is the biggest killer of enterprise. The “no smoke without fire” syndrome has caused more businesses to fail than any amount of bad management. Attempted cover-ups do not work in today’s world. There are too many social networks and investigative journalists out there to hide the truth. It is better to be transparent and demonstrate a cool head.
When a business starts looking shaky the first rule is to secure your most important employees. Depending on the nature of the business this may require one or more sessions. Key staff should be told the truth. Not all of them will stay but the ones that go were not going to help in the crisis anyway. The stayers will pull the business round if you give them a chance and listen to their views.
You lose no authority by enlisting others’ help in a crisis. You remain leader and have to demonstrate that you are doing so but you do not need to carry the weight of all the work yourself. Giving others a share of the problem makes them feel more responsible to see that the storm is weathered.
The biggest mistake about failing businesses is to think that a plan will not help and that everything has to be hand to mouth. A strategic approach to dealing with a crisis is vital. It should have begun before the crisis appeared. You do not start to recruit a fire brigade when someone shouts ‘fire’. Your preparation for a crisis is key to all successful survival. Nevertheless, a plan at any stage is better than no plan at all.
Businesses without crisis plans are foolhardy in today’s crisis world.

