The Strategist

What to do if your company is in crisis: A manager's guide

11/29/2019 - 02:24

We all have faced many crises in life. Sometimes a personal turning point or problems in business cause unbearable pain. You may feel overwhelmed, confused and depressed and not know what to do.

According to John Chambers, CEO of Cisco, the largest corporation in the world, successful leaders are more a product of fails and victories than of victory. How to behave in a crisis?

Keep calm

One of the biggest mistakes that everyone - both business leaders and ordinary people - makes, is that every crisis is perceived too personally. Faced with sudden changes, we put ourselves at the center of events. Since they happen to us, it means that it should be directly related to us. These thoughts evoke a whole gamut of emotions, from anger and denial to the desperate desire to do something to change everything.

But indignation and impulsive actions rarely result in a favorable outcome. However, most people do not realize that they react in that way. Some vigorously apply a business model that has been effective in the past without figuring out if it still works. Others begin to destroy everything: to lay off employees, change the team of managers, close new projects, refuse services of suppliers, move to a new place and destroy the business only because difficult times have come or something went wrong.

Such an instinctive impulse may be erroneous. At the height of the crisis, first of all, you should remain calm and objectively evaluate what is happening. In the event of a crisis, you, like a doctor, are trying to diagnose a disease by a random set of symptoms. The question is not whether you feel something like a Zen state - your behavior and way of thinking are important. If you stay calm, people around you are less likely to panic, and circumstances are less likely to get out of hand.

Self-control helps to go beyond the limits of one's own “I” and carefully analyze the state of things in order to understand the scale and scope of the problem before undertaking anything.


Keeping in touch with customers is very important. Sharing problems with them when your sales depend on their confidence in you at first seems like an illogical act. This is actually not the case.

A crisis is not a reason not to contact those who buy your products. These people are your best source in identifying any underlying problems in the company and in the market. If a crisis is caused by factors beyond your control, customers will be the first to feel it. After all, they are always at the forefront, so they are more likely to notice shifts in the market or in a competitive environment earlier than you.

No matter how painful the conversation with clients may seem to you, if you have any difficulties or made a mistake, outside your company they are the ones who are able to detect problems and find their solutions. Customers' perspectives and strategies will influence what you do. In addition, customers need to receive information from you. In the event of a serious crisis, they will feel it approaching or hear about it from others, lost in conjecture as to whether you can continue to provide for their needs.

If you calmly explain to them what is happening, customers will help you discover and solve problems. It can even help strengthen relationships.


Another group of people who should be given priority during the crisis are colleagues. It doesn’t matter whether it’s employees or project partners. In the midst of difficulties, you should communicate with them as often as possible. Like clients, they can also provide valuable information about what happened and suggest something reasonable. No matter how you want to focus on your team or department, the best ideas often come from people from less familiar areas of your business.

Even if you cannot share information at the current moment, do not disappear, otherwise a pause in your absence will be filled with doubts, and the gossip mill will generate rumors that will only aggravate everything. Even in delicate situations, try to inform the team members as much as possible so that they have the opportunity to share their ideas and feedback.

Find a reason

The main goal of communicating with customers, employees and other interested parties is to understand the underlying causes of the crisis and accordingly respond to them:

1) If your actions have become one of the reasons for the adverse development of events, you need to understand this, recognize your role and quickly fix it.

2) If difficulties are caused by a recession in the market, a political crisis or other external factors, then the last thing you should do is to panic and rush to change your strategy.

In the event of a crisis, you must realistically assess the impact of internal and external causes. If on the eve of a market downturn you had the right strategy and the right vision of where the market is heading, you should not think that they are not applicable now.

Based on "Connecting the Dots. Lessons for Leadership in a Startup World" by John Chambers