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Eight Steps a Leader Should Take When Facing a Business Crisis

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There are many crises that a company can face during its lifetime, and they happen for many different reasons. Whether it’s a financial crisis, an economic crisis, an environmental crisis, or any other kind of crisis, it’s important for business leaders to have a plan to quickly manage the situation.

When properly thought out, a business leader’s first step in a business crisis can set the course for an effective solution. Here, eight members of Council for Young Entrepreneurs discuss the first steps a business leader should take when faced with a business crisis and why he should take them.

1. Take the time to cool down

A leader should never react angrily or get carried away by high emotions. If you’re upset, it’s important to take a step back first, gather all the information, and come back with a cool head so you can deal with the problem effectively. Being a hothead will only further degrade team morale in times of crisis. Taking a day to think about your response and being rational when you take action will benefit your team and your business. † Brian David Crane Spread great ideas

2. Conduct an in-depth situation analysis

A leader must first calm down, take a deep breath and make an in-depth analysis of the situation. The last thing you want is to fight with what you can without a strategy. For example, there was a time when our revenues were stable and costs were rising, so members started worrying about the future and thinking about their commitment to the business. In this situation, it wouldn’t work to talk to your team to cool them down or cut costs at the expense of future business growth. Instead, I first distanced myself and rested until I was no longer emotionally stressed. Then I was able to sit down and do an objective calculation that showed that we could get out of the ordeal by taking certain actions, which was convincing to the team. † Lianxin He GrandLine Technologies

3. Discuss the crisis with the team openly and publicly

Uncertainty can cause stress in the company and ultimately have a negative effect on employee performance. Strong leaders lead, and if employees don’t hear that leadership is aware of the crisis and has a plan, uncertainty and stress will set in. The best course of action is to call an “all-hands-on-deck” meeting. Suppose the leadership is aware of the crisis. Explain with confidence how the crisis will be handled and what is needed from employees. Give employees the opportunity to ask questions. Not only will this help build trust, but the open and honest approach to leadership also builds employee confidence. When the company works together, any crisis can be solved with confidence! † Bill Mulholland ARC move

4. Think about the situation from all angles

What impact does this have on staff? How will this affect the sellers? What about your investors? What about your customers? Seeing the value each piece of the puzzle brings will help you determine what’s most important to save and what’s right to reduce. You can create a plan to keep 80% of the business happy, while devising a way to eliminate 20% of the business that doesn’t add as much value. Cutting out 20% of the business that is no longer valuable may be just what you need to get out of a crisis. † Mary Harcourt CosmoGlo

5. Acknowledge what happened and take responsibility

Crisis management is one of those things that falls into the “easy, not easy” category. It usually comes down to three things: transparency, integrity and tranquility. It’s critical to be transparent with those involved, whether they’re employees who have been laid off or customers you’ve let down in one way or another. Acknowledge what happened. Take responsibility. Focus the team on doing the right thing. Be calm in the face of the storm. If you do all this, people will trust you more, not less. Some of the biggest failures I’ve seen have ultimately made our brand stronger, both externally and internally. We were open and honest about mistakes we made, we corrected them and explained what we were doing to make sure they never happen again. Do this, and a crisis won’t break you – it will make you stronger. † Alex Furman invitation

6. Consider the Right Approach to Take

You must assess whether the solution is to salvage the situation or to allocate resources elsewhere. When a crisis occurs, many business owners respond by trying to mitigate the damage and may invest too much in recovering from that particular setback. In some cases, however, it’s better to phase out that part of the business and allocate resources to faster-growing areas of your business. That way, you’re committed to growing your business in general rather than focusing too narrowly on maintaining revenue in a specific category. † Firas Kittanehu Amerisleep mattress

7. Collect all the facts

Gathering information before responding, assigning tasks, blaming, or anything else is so important. Find out who is involved. Find out where the malfunction is or was. If possible, obtain multiple ‘takes’ of the situation. From there, take the time to assess the situation and draw up an action plan. Your team will respond to your comment. If you use facts to make decisions and stay calm, your team will follow suit and the situation will be much easier to resolve. † Ryann Dowdy Uncensored Consulting, LLC

8. Let your customers know what the problem is

The hardest part of dealing with a business crisis is letting your customers know about the problem. I’ll be the first to tell you that letting people know earlier is always better. You don’t want to wait for the issue to escalate into a full-blown situation before notifying your customers about the issue. I recommend reaching out to existing customers on your website and via email and social media so that you remain transparent during your business crisis. † John Brackett Smash Balloon LLC

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