In business what is the most difficult thing to obtain but the easiest thing to lose? The answer: Credibility. It can take years to establish a level of credibility with clients and industry associates, yet it takes only one single even to destroy credibility.
The two most common situations which result in a loss of credibility are (1) misrepresentation and (2) poor crisis management. Losing credibility for misrepresentation is the direct consequence of a bad conscious decision or behavior. However, the loss of credibility resulting from poor crisis management is the negative outcome of inefficiencies and poor management techniques.
Misrepresentation by definition implies bad intentions. Poor crisis management is without bad intentions but often filled with incompetence. There is a common statement used in Washington scandals……it’s never the event, but always the cover-up. The same can be said about poor crisis management.
Credibility is often built over a period of time, but it is truly tested at times of crisis. In business, there will always be times of crisis – some are caused by elements beyond our control while others could be described as self-inflicted. At times of crisis, the primary focus needs to be on a positive outcome. Unfortunately, human nature immediately puts the focus on who’s to blame. Although identifying the root cause of the crisis is important (to prevent a reoccurrence) if too much time/energy is focused on pinpointing blame, the ultimate result is a prolonged crisis and a delayed resolution.
With that said, it is often easily identified if the crisis was created from within or outside the company. It is important that the general response is identified before communicating with customers – both internal and external. Why is this so important? If the crisis was created (or could have been prevented) by the company, then it is expected that the customer already understands this fact. Therefore, take ownership. Denial or deflecting responsibility is one of the quickest means to losing credibility.
It is often said that a predominant characteristic of a good leader is that he/she often takes too much of the blame while taking too little of the praise. To be a good and effective crisis manager you must first be a good leader.
During times of crisis……emotions are heightened, tones of customer conversations are sharpened, fear and desperation often appear, and many times there lacks sufficient information to effectively manage the situation. As a result, the natural human instinct is self-preservation – which is why during times of crisis so many employees go into hiding versus confronting their customers.
The key to success and maintaining (and potentially building) credibility among your customers is Be Uncomfortable. The bigger the crisis……the more one should be in front of their customer. Although I have managed through many company self-inflicted crisis, often industry-wide crisis are more common. While much of the competition is avoiding their customer’s calls, my team increases their presence in their customer’s office. They are more visible as their competitors are hiding. They engage in more conversations while their competitors are not returning calls. As a result, the customers will have confidence that during difficult times they will have support and a dedicated business partner.
A crisis does not directly impact a person’s credibility; the manner in which a person responds/reacts to the crisis is what will have an impact on a person’s credibility – either positively or negatively. Case in point, recently my company encountered what could be argued as a self-inflicted crisis. The end result is that there were certain loans that we could no longer close – even if they were in process. Needless to say, this situation had significant implications both on our customer as well as their client (homeowner). Our customer would be losing direct income but also be putting into risk his reputation with his client.
This type of situation can easily end business relationships – which would result in no future business from this specific customer. The emotions of the situations hit a critical point and my Account Executive requested that I communicate with her customer. During the conversation, it was discovered that the primary concern was that the homeowner did not believe the explanation and blamed our customer for the situation. I offered to speak directly with the homeowner. I explained to the homeowner in detail the situation and further explained how their broker (our customer) too was a victim of circumstances. I was later informed by the broker/customer that I was the first person who ever willingly spoke with one of his clients.
Ultimately, the crisis costs several million dollars in production. However, as a result of the management of the crisis no credibility was lost with the customers and in fact some production redirected from the competition due to our high level of communication, visibility, and positivity.
In business, a crisis is to be expected. It is important to realize that with crisis comes opportunity. If the crisis is effectively managed, the ultimate outcome of the crisis can prove to be positive. However, if the crisis is not managed effectively, it can result in a complete loss of credibility. Be honest….be visible……over-communicate…..be disciplined……be uncomfortable…….take accountability……..be consistent…..Be a Good Crisis Manager…..BE A GOOD LEADER.
Husband, father, coffee connoisseur and lover of all things hockey. At 51 I sometimes wonder have I done enough. I have been married to my best friend for 30 years. She knows all my faults and loves me anyway, As a father of “almost always” perfect boys, I am always surprised at what life has to offer. It is messy, scary, thrilling, and always fun.