Disaster management – when things go wrong in business

We talked in a recent blog about managing anxiety in business and channeling it positively.
But what can business leaders do when something major goes wrong as in the recent and ongoing saga that has hit VW over vehicle emissions?
Firstly, it is important to recognise that something going wrong at some point in a business is inevitable.
Secondly, a wise business will have disaster management plans in place so that there is a well-established process for dealing with a crisis.
But thirdly, and this is arguably where VW did not do so well, managing the situation is not only about fixing the problem.
It is also important to communicate quickly, constructively and sympathetically to customers affected.
Being over-cautious in the early stages because of anxiety about the possible consequences is not the most constructive approach.
It is better to be open and communicative, to say, for example, that “yes we acknowledge that there is a problem, and we are working urgently to find out what happened.” More communication rather than a minimal level is required to reassure stakeholders and this is likely to involve clear communication about the rectification process and who is responsible.
As such, it is important for the company CEO to take ownership of the situation, come forward and demonstrate concern for affected customers as soon as possible and tell everyone what he or she is doing about it.
There needs to be regular follow-up information given as the picture becomes clearer as to how the business will redress the situation.
It is important to avoid giving an impression of confusion and disarray as some have argued has been happening in the ongoing VW situation.

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