Crisis Management: Apologies, Natural Disasters, and Change

Crisis Management

Business crises can come in all flavors — from man-made to caused by Mother Nature. And managing those crises involves mitigating their impact to your business: both reputation and revenue.

Recently, a certain kind of crisis management — the corporate apology — has been making headlines. In October, Volkswagen issued a public apology, along with a massive recall of their cars in South Korea and China. Last summer, Facebook issued an apology over changes to news feeds. It seems every week there’s an apology over a tweet that misfires.

JFK reminded us that when written in Chinese, “crisis” is a combination of both danger and opportunity. In that spirit, we’ve selected this week’s links to keep you focused on the “opportunity” side of business crisis management.

These articles offer analysis and advice on crafting corporate apologies, how to plan for disasters that aren’t the work of human hands, and a look at the skills and strategies to lead your business through crises and periods of rapid change.

Corporate Apologies, Step by Step

When does a corporate misstep merit a public apology? And what does an effective apology look like, anyway?

In The Organizational Apology for Harvard Business Review, professors Maurice E. Schweitzer, Alison Wood Brooks, Adam D. Galinsky combine their work in management and psychology to provide businesses with an “apology formula” — a step-by-step guide for apologizing the right way.

The first question a business faces is whether a public apology is warranted or not. For this, the authors offer a quick framework to identify the costs and the benefits of offering an apology. The diagnostic begins with an assessment of the violation itself (or the perception of one) and ends with whether the company is willing to commit to a change in behavior that led to the violation. Once a business determines an apology is warranted, they can move through the apology formula to craft their message.

Is an apology formula really necessary? Apparently so. As the professors write, “It’s astonishing how many well-intentioned, sophisticated organizations completely botch apologies.”

They then walk step-by-step through the apology framework itself, discussing who should make the apology, what should be said (and avoided), how quickly it should happen and how it should be delivered. Their advice is peppered with numerous apology examples — both formal and informal — and from incidents ranging from Facebook’s admitted manipulations of news feeds to ill-advised tweets sent by DiGiorno Pizza.

These real-life examples are woven into every step of the formula — some to emulate, some to serve as a warning — and really allow the advice to be relatable and usable to a company looking to craft its own apology. One hopes never to use this advice, but it’s an excellent article to clip just in case.

The VW Apology: A Case Study

What’s in a good apology that makes it so good? Ask a crisis communication expert, especially one who has focused her research on corporate apologies from CEOs.

In “The Anatomy of Apology for Medium, Iris Wenting Xue helps us unpack what a good corporate apology looks and sounds like by offering an evaluation of the recent public apology from Volkswagen. And boy, is she thorough.

She uses the model she developed as a PhD student to evaluate corporate apologies — a 10-point checklist that focuses on the ultimate objective of regaining the public’s trust. With it, she walks through the video of the apology from Volkswagen’s now ex-CEO Martin Winterkorn and grades it line by line.

Not only do apologies have to be timely, Xue shows us, they need to demonstrate an understanding of the criticality of the crisis and and emotional understanding of its impact — on the public and on stakeholders. Ultimately, she rates Winterkorn’s effort as average (he’s awarded an overall C+ for the speech) but the real learning here is Xue’s analysis of the specific elements of the speech according to her framework.

This is a fascinating analysis of a recent headline story, and it’s an important learning point as well. Her model can help shape effective corporate apologies, if you’re ever in the unfortunate circumstance of needing one.

When Natural Disasters Strike

Man-made crises may be tricky to navigate, but managing communications around natural disasters — earthquakes, hurricanes, wildfires — comes with its own set of headaches. Some come with advance warning (storms that are headed your way), but others can strike completely out of the blue.

Disaster preparedness — thoughtful contingency planning in advance — can not only help mitigate the risks to the business, but may also position the company to find opportunity in the crisis. Intrigued? Read on.

In How to Keep a Natural Disaster From Destroying Your Business James Kosur, C-Suite editor for Business Insider, interviewed Dun & Bradstreet SVP Anthony Scriffignano to discuss how businesses can best prepare for these natural disasters.

Getting your head around the total risk to your business is first priority, of course. These are the pressing questions in a looming disaster, says Scriffignano — “Where are we and where is the hurricane?” — and include estimations of the impact and disruption for the business.

Equally important, warns Scriffignano, is to analyze the risk to your whole supply chain and to critical customer segments of your business and your suppliers’ businesses. These “next-order” risks might be tougher to calculate, but they are critical to include in your estimation.

However, Scriffignano is quick to point out that alongside risk, the business should also be estimating the opportunities for the business. Can your business supply help to people in need? Offering monetary assistance, humanitarian aid or critical supplies can be a tremendous opportunity for your business, and one that is frequently overlooked during planning.

The interview with Scriffignano uncovers even more insights about advance planning, prioritizing risks and using teams to enrich the planning process. Does your business have a written disaster plan? If not — or if it could use some beefing up — this article is an excellent place to start.

How to Make Decisions During Rapid Change

Is rapid business growth a crisis? Surely not. But it can certainly feel like one when a team is growing quickly and business challenges are changing rapidly as well. For Joel Gascoigne, the founder and CEO of Buffer, the recent months of rapid team growth offered both danger and opportunity as he attempted to design — and navigate — the changing culture in his company.

Gascoigne’s article for Fast Company, How I Make Decisions When Everything Is Changing,” focuses on how he adjusted the culture of communication at Buffer, as team members were added by the dozens. When one-on-one discussions with the whole team quickly became untenable, the challenge of encouraging all perspectives to percolate through the entire company became key.

His solution? A five-step plan that allowed Gascoigne — from his unique vantage point as CEO — to provide context and pattern-spotting, but stop short of dictating solutions. It’s a great plan, but he admits candidly, “It’s really hard to do this, and I often fail. It also takes longer.”

This frank admission, Gascoigne’s believe in the long-term payoff — and the 5-step plan itself — all make for good reading for those of us tasked with leading teams through challenging times.

Skillfully Manage a Crisis in your business

We end with a look at the personal dimension of crisis management in business. In 10 Ways Successful Leaders Skillfully Manage Crisis Lifehack columnist Robert Locke offers a discussion of which leadership behaviors help most in the skillful handling of a crisis in you business.

The good news is that most of the items on this list are do-able for leaders at any point in their careers. Qualities like facing up to bad news and prioritizing open communication don’t depend on years of experience to pull off. Others bank on a ample supply of emotional intelligence to stay upbeat and non-defensive when the going gets rough.

Some, however, require a savviness that comes with some experience in the leadership chair. Being decisive when switching away from strategies and systems that no longer serve is a quality that all can share — but knowing of an alternative strategy to use instead won’t always be as clear.

Still, this article is an encouraging end to our look at crisis management in business. It anchors our thoughts on the “opportunity” side of crises, and shows us how to develop the skills to meet them with confidence.