Things go wrong in business. It’s not that they went wrong in the first place that will be remembered. What will be remembered most is how you managed the situation and recovered.
Legends are written based on how leaders recovered from tough situations, especially recovering well after things went terribly wrong. Effectively leading through tough situations, where things have gone wrong, demonstrates many admirable qualities of an organisation, its leadership and its people. These qualities include, but are not limited to: integrity, resilience, innovation, courage, depth of expertise and the willingness to ‘go the extra mile’ to fulfil commitments. Even if the situation cannot be resolved, the demonstration of these qualities will result in respect from all parties concerned, if not the opportunity to engage in future endeavours.
I was recently fortunate enough to be introduced to a widely acclaimed Futurist and Keynote Speaker at a business event. Our conversation was stimulating and wide ranging. Clearly he is a person that has wide experience and well earned his status as a leader in his field. Our conversation came to the topic of ‘business disasters’ that we have each dealt with.
I shared with the Futurist some wisdom that I had gained as the Managing Director of an IT integration company when dealing with one of the Australian Big 4 banks for the supply of a highly business critical, customer facing system. The project ‘went off the rails’ with significant delays and a tight deadline looming. As a result, I had been summoned to a meeting with the Bank’s Senior Manager who was responsible for the project to explain the significant delays in the project and the apparent deficiencies in the system. The summary of the meeting was that our company was being given an opportunity to formulate a plan to quickly address the issues to the Bank’s satisfaction or risk having the multimillion dollar project cancelled. In the words of the Bank’s Senior Manager:
“It’s not that things have gone wrong that matters! It is how you now recover that will make the difference between our companies enjoying an ongoing, mutually profitable relationship or resulting in your company never doing business with the Bank again”.
I am pleased to say that we resolved that system’s issues for the Bank and the companies went on to enjoy a long, mutually rewarding relationship.
In the conversation with the Futurist regarding our endeavours that had gone wrong, it was easy for us to find the common ground in our respective experiences. It was not that things went wrong, it was that we were able to rapidly address the issues and recover that not only saved those situations but made our businesses stronger.
In business, if you are not making mistakes, you are not trying hard enough. Those that wait until everything is perfectly safe, with zero risk attached, get left behind by those that make bold plans, assess the risks well ahead of taking action, build plans to cover those risks and then execute their plans decisively.
Prevention. Before we get into considering now to recover from major problems, let’s consider how to avoid them in the first place.
Everything is a project. Even the apparently simple aspects of business are in reality projects. Careful planning is required to ensure outcomes meet expectations. The best way to recover from a major problem is to avoid it in the first place so be sure to clearly define plans and execute them well in advance for even the smallest business activities. In assessing the risks in your projects, do not only focus on the major things that could go wrong but also be sure to look for the small things – they can add up to massive problems.
Look for the small issues. Major problems are the culmination of many small issues. Because they are seemingly small items, they get overlooked, often with catastrophic results. Simply formulating a great plan, then setting the project in motion and monitoring for any significant variations is not enough. Attention to detail is required to catch the seemingly small issues before they result in a major problem. As an example, an air crash investigation uncovered that the aircraft had crashed because the pilot’s window had blown out at high altitude. Upon inspecting the wreckage, it was found that the screws that had been used on one window were the wrong screws, causing the failure of the glass. Further investigation uncovered that during routine maintenance, the window had been removed and re-sealed to address a very minor leak. Because the engineering firm that was doing the maintenance did not have the exact screws, apparently appropriate substitute screws were used. The repair required counter-sunk screws but flat head screws were used. The edge on the screws caused the failure and the result was a tragic air crash.
We have a Problem! So despite our careful planning, something has gone wrong… How do you recover from a major problem and give your business the highest chance of retaining an ongoing successful business relationship? Every situation requires tailored action however here is an approach that has achieved great results.
Acknowledge that there is a problem. Immediately after you are informed by a reliable source that a problem exists, acknowledge it. Hope is not a strategy. Ignoring a problem will not make it go away. Worse, denying it will severely impact credibility and confidence. Let those impacted know that you acknowledge there is a problem and that immediate action is being taken to address the problem.
Get the facts – fast! When problems arise it is imperative to rapidly get to the facts. Objective assessment is required. At this stage the problem must be clearly defined however it is irrelevant why the problem occurred. This will be the subject of root cause analysis at a later, more appropriate time. Apportioning blame is counterproductive and must be not be entertained. It is vital to rapidly identify the major impact of the problem and the immediate outcomes that will occur if it is not addressed immediately.
Bring in the experts. This is no time to ‘learn on the job’. Getting expert input will enable more rapid identification of the problem and accelerate the formulation/execution of action to address it.
Communicate. Do not be afraid to over communicate whilst ensuring that the appropriate information is shared. Keep everyone that is impacted by the problem informed regarding the progress being made to address the problem. Honest, open communication is the basis for a trusted relationship, even if the news is not good.
Devise and agree an Action Plan. Based on the assessment of the facts and the expert input, devise a plan of action to resolve the problem. Agree the plan with the key impacted parties and adjust it without getting ‘bogged down’ with details or irrelevant matters.
Act Decisively. Time is of the essence. Mobilise the required resources to address the problem without delay.
Be involved – demonstrate leadership. Leadership is required to ensure that everyone is focused on addressing the problem and that it has active involvement at the highest appropriate levels. If that is the CEO then that is who has to demonstrate leadership, facilitating others who in turn demonstrate decisive leadership in their respective disciplines.
Make hard decisions early. Once again, hope is not a strategy. Not every situation is recoverable. It is best to continually assess the progress and the probability of success. If the overall situation can be best addressed by cutting certain aspects of what has been committed, highlight these with the affected parties and agree the action that will be taken. It is better to ‘lose some battles in order to win the war’ as opposed to ‘battling on regardless of obvious imminent failure and losing the war’.
Post Problem Review. Once the problem has been effectively addressed, it is most important to review the problem with all affected parties. This will include how it was dealt with successfully and what can be learned from it. This is the forum to agree a plan to perform a root cause analysis and determine the process that will be executed to ensure that the problem does not reoccur. It is common that a perceived supplier problem is in fact a problem with the customer processes or a misunderstanding on their part of the scope of a project. The Post Problem Review provides a forum where such customer related issues can be disclosed in a sensitive manner and dealt with appropriately.
No possible solution. It is not always possible to positively address a problem so a course of action must be taken to deal with that outcome.
Acknowledge and agree early if the Problem cannot be resolved. Immediately it becomes apparent from the problem management process that the problem cannot be resolved, it is essential to acknowledge this and agree with all affected parties that it cannot be resolved. A mitigation plan can then be devised to as far as possible minimise the negative impacts.
Agree to move on. This step is the worst case scenario and should only happen as a last resort. Once it is clear that resolution is impossible, negotiate and agree an early exit. It is in no one’s interest to continue pursuing a project that will clearly fail. Taking an early, constructive approach to the terms of separation will allow all parties to move on to more productive endeavours whilst reducing the overheads that the project will continue to incur.
Recovering from tough situations when things go wrong can build strong, long term business relationships if managed properly. These adverse situations demonstrate the ‘mettle’ of you and your organisation. Facing them with open, honest communication and a collaborative approach to resolving them significantly differentiates you from the others that deny, blame and cover up when things go wrong.
Philip Belcher, LSE Consulting ©
