Matters Column

What would your grandfather do? Crisis and the family business

September 15, 2017
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When it comes to a crisis, media outlets are often loud, insistent and demanding. They want answers, they want drama and they want blood — and they want it in all time for their 6 p.m. broadcast or tomorrow’s print deadline.

The media wants you to call back, open your factory floor and confess your mistakes. They want names, and they want blame — and they will camp out on your doorstep or haunt your employee parking lot until they get them.

But I’m here to tell you that no matter what the crisis your business may face, the media is never, ever, ever the most important audience you will deal with — no matter how much they try to convince you they are.

Crises are not unique to family-owned businesses, but they do present unique challenges. Crises are those heart-stopping, show-stopping events that bring business as usual to a screeching halt.

By their nature, crises escalate in intensity, meaning they often get a lot worse before they get any better. They demand immediate attention and often require extraordinary resources. Handled poorly, crises can ruin the reputation of your business, cost you customers or shareholders, and prompt lawsuits or regulatory action.

For the family business, crises bring a level of personal pain that can be crippling. While all executives worth their salt feel a connection to the businesses they are running, family business owners and leaders ARE the business. Their names are on the door. They add the weight of legacy and expectation to the already-acute emotions they are experiencing.

In my career, I have handled communications for hundreds of crises, scores of them for family-owned businesses in West Michigan. Kidnapping, embezzlement, closure, sale, bankruptcy, union drive, union strike, CEO ouster — even a mass shooter. Family-owned businesses take their responses much closer to heart.

I remember assisting one third-generation CEO with the painful process of closing the business his grandfather started. At the end of a very long and emotional day of employee meetings and media interviews, the two of us sat down in his office, and he wept. Away from all his managers and employees, all the klieg lights, all the carefully rehearsed talking points, he just sobbed.  

And my heart broke. Because I saw firsthand what ferocious pain he was going through — and would continue to go through, for months and years to come.

When confronting a crisis, I follow a three-step process to help guide communications. First, acknowledge what happened. While this may seem like a no-brainer, companies often stumble by trying to parse words or situations to diminish their involvement. That route seldom, if ever, works.

Second, apologize. Most lawyers I work with invariably cringe when I say this, but it’s true. And it can be done without opening your business to litigation.

Third, explain how it won’t happen again. Detail the steps you will take to address the root cause of the issue and the safeguards you will take or the procedural changes you will make to avoid a repeat.

For family-owned businesses, I often add a fourth step that overlays the other three: Be true to your roots. Before responding to the crisis at hand, take a breath and consider what your grandfather would have done or said. Then speak or act.

The best businesses, family and otherwise, respond to crises in a way that is true to their DNA. Nowadays, you hear that a company is being authentic or on brand. But really, companies are just living up to who they are and what they stand for, no matter what the occasion. That’s especially critical for family businesses.

It’s also critical to address your stakeholders in order of importance. I often have clients picture themselves dropping a stone into a pond. The rings closer to the stone are smaller and tighter; they widen and broaden the further out they go.

That’s how you should address your stakeholders. Those closest to you need to know first. Start with your board or shareholders. Then leadership team and employees, along with family who may not be active in the business. Then regulators, bankers and insurance providers. Then customers. Then vendors and community partners. Then, and only then, the media.

Reaching out to your key stakeholders first in a crisis does some key things. First, it signals they are important — and they are. The media will eventually decamp from your doorstep to chase that next shiny piece of breaking news, and you will be left with employees and customers who were watching intently how you handled that crisis. They always have longer memories than the media.

Second, it allows you to share your message directly so that when the news does eventually break, those who need to know already have known for hours or days. I still cringe when I recall reviewing a crisis plan for a then-new client two decades ago. This particular plan placed the media in the front row of stakeholders, saying that the company would communicate to employees, customers and others through the media. Shiver.

And finally, for family businesses, talking to your key stakeholders first is just the right thing to do. It’s respectful and courteous. And it’s what your grandfather would have done.

Mary Ann Sabo is the president of Sabo PR, a full-service communications firm based in Grand Rapids. She’s fond of saying that much of her best crisis work never sees the light of day.

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