How to Stay Loose in a Tight Spot

These days, anyone is fair game. What do you do when they come after you?

That’s Mike Wallace in your lobby, waiting to stick a camera and microphone in your face. Or it’s a guy waiting for you by your car, intent on serving you with papers that will compel you to appear before a congressional committee. Or it’s the unpleasant surprise that greets you when you open your morning newspaper, only to discover that your company is on the front page — for reasons you’d rather not discuss.


According to the Institute of Crisis Management, we’re in the middle of the worst year since it started keeping records 13 years ago. Anyone, it seems, can end up on the grill or under the klieg lights, from Martha Stewart to Bernie Ebbers, from Robert Pittman to Jean-Marie Messier. Journalists are on the rampage. Consumers are angry. Shareholders are livid. Congress is investigating.

So what’s the good news? Well, with so much, um, stuff hitting the fan, there’s a lot of good advice from smart people who have learned from their mistakes in handling crises over the years. After all, if you want to get good at something, there’s no substitute for practice. The one thing that they all agree on: The time to prepare for your disaster is before it happens.

Here are five more rules to add to your “how to” guide to the hot seat.


1. Know your enemy.
When you’re in a fight for your life, you need to know everything there is to know about the people or the problem you’re battling. According to crisis-management expert Larry Kamer, who has worked for General Motors and Nike, knowing the enemy helps frame what you do in a crisis. Once you can name your enemy — inside or out — you can pick the right ammo to fight back intelligently.

2. Work in the yellow-light zone.
Most companies operate in the green-light zone: Everything’s fine. Then, wham! They get hit with a red-light emergency. The fact is, says Michael Sitrick, a crisis-management expert who just signed on to help the Roman Catholic Archdiocese of Los Angeles, problems often smolder inside companies for years. Ford Motor Co.’s customers had complained about Firestone tires blowing out in Explorers long before the crisis blew up into a congressional investigation in 2000. Companies that operate in the yellow zone — tracking smoldering problems — can solve problems before they escalate.

3. This won’t be easy.
Managing crises effectively is often about choosing between right and right, says Harvard University professor Joseph Badaracco, whose book, Defining Moments, is all about such decisions. Most tough situations have different “right” actions — each of which has a different impact on the company, employees, and shareholders.


4. Update your plan.
It’s great to have a plan that you can turn to when things get ugly, but plans are worthless if they aren’t updated. Kamer suggests putting an expiration date on the company crisis plan and assigning a team whose sole purpose is to keep the plan relevant.

5. It’s your life.
Remember what you stand for. If you just want journalists to stop harassing you, hire a public-relations agency and let them do some spin. But if you want to use the crisis as an opportunity, then you have to know what you stand for. Kamer offers one question to keep in mind: “What do I want to be remembered for when the crisis is over?”

Sidebar: The Good, the Bad, and the Ugly

The world of crisis management is a pretty tight-knit lot. Ask the experts, and they all have the same list of crises to remember.


The Good: Odwalla Inc.
The little juice company’s handling of an E.coli bacteria outbreak that killed one child and sickened others in 1996 tops the “good” list for crisis experts. In response to the crisis, Odwalla decided to pay medical expenses, issued a national juice recall, and faced subsequent lawsuits that cost the company millions. The company never backed down on its pledge to make its juices safe and to restore confidence in its products.

The Bad: Martha Stewart
Crisis experts agree that Martha Stewart’s handling of alleged insider trading of her ImClone shares was a serious case of misreading public perception — and reality. Stewart contended that she had done nothing wrong — and she believed that should have been enough for everyone. It wasn’t. When investigators hounded her with more questions, she made it clear that she didn’t feel obliged to answer. Her silence made her look as if she had something to hide — even if she didn’t.

The Ugly: Ford-Firestone
This fiasco tops the list as the worst-handled crisis in recent memory. The two companies committed three major blunders early on, say crisis experts. First, they blamed consumers for not inflating their tires properly. Then they blamed each other for faulty tires and faulty vehicle design. Then they said very little about what they were doing to solve a problem that had caused more than 100 deaths — until they got called to Washington to testify before Congress.