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How To Recover From A Business Crisis

Lessons in how to handle a business crisis from Under Armour’s 2014 Winter Olympics PR nightmare.

How To Recover From A Business Crisis
[Photo: The Korean Olympic Committee/Flickr user Republic of Korea]

At the 2014 Winter Olympics, Under Armour was the corporate sponsor for U.S. Speedskating, providing a suit, the “Mach 39,” that the company touted as the fastest in the world. When gold-medal favorite Shani Davis came nowhere near getting a medal, several skaters and reporters criticized the suit and blamed Under Armour for the poor American showing overall.

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The company had a perception crisis on its hands. Instead of bolstering the brand as is intended with a sponsorship so high profile and global as the Olympics, Under Armour’s product, design expertise, and commitment to athletes were all called into question.

The response from Under Armour was swift and decisive. The company’s VP of innovation said: “We’ll move heaven and earth to make [the suits] better.” Under Armour attempted to patch the suits, released a statement quoting U.S. Speedskating maintaining the suits were not to blame, enlisted other high-profile athletes like Lindsey Vonn and Michael Phelps to defend Under Armour’s products, and signed a new sponsorship deal with U.S. Speedskating before the Olympics were even over.

Under Armour’s crisis was on a global scale, but crises of this nature can happen every day in business. In fact, much of being in business is learning how to deal with miniature disasters.

A crisis is any public perception that could damage a brand and have a catastrophic effect on the bottom-line. A mistake or a even a misperception can spread like wildfire.

Here’s how you can act quickly to acknowledge your mistake and then clearly attempt to correct it, as Under Armour did.

Determine The Context Of The Crisis

It’s very easy to get caught up in the emotions of a crisis and react, rather than respond. Take a moment to gather all the information and to see clearly what is really going on. Examine both sides of the issue. Seek guidance from a neutral party. Your assessment of the situation will determine your action, so proceed with caution.

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Get Everyone On Board

Talk to all the stakeholders; seek their expertise and opinions; let them know you’re taking the problem seriously. This a time when leaders are proven. Be a leader.

Make An Action Plan

Under Armour very well could have taken a different course of action, taken the blame, apologized and watched Nike regain sponsorship of the U.S. Speedskating team. Instead, they made a decisive plan to stand by their product and double down their investment, building confidence in their participation as a partner to athletes. Either way, make a clear plan based on the values of your company.

Communicate Clearly And Often

In a crisis, a void of information is usually perceived as negative. It’s not the time to hope your crisis blows over. Under Armour provided the press with open access to its executives, who were more than willing to answer questions and provide information. Since the company’s strategy was clear, the message with delivered repeatedly and consistently, and backed up by decisive action.

Crisis is a time for leadership. If you do confront a crisis, it’s best to acknowledge it, apologize, and quickly act to correct it. By understanding the situation, aligning your troops, and activating a clear strategy, the heartache, negative perceptions, and hit on your bottom line can be mitigated, and you’ll come out all the wiser.

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