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Saturday, June 4, 2011

Manage the Crisis

In a fast-changing, turbulent, highly competitive business environment, you will have a crisis of some kind every two or three months. You also could have a financial crisis, a family crisis, a personal crisis, or a health crisis with the same frequency.

Take Charge Immediately
When the crisis occurs, there are four things you should do immediately.

1. Stop the bleeding. Practice damage control. Put every possible limitation on losses. Preserve cash at all costs.

2. Gather information. Get the facts. Speak to the key people and find out exactly what you are dealing with.

3. Solve the problem. Discipline yourself to think only in terms of solutions, about what you can do immediately to minimize the damages and fix the problem.

4. Become action-oriented. Think in terms of your next step. Often any decision is better than no decision.

Practice Thinking Ahead
One of the key strategies for business and personal success is "crisis anticipation." This strategy is practiced by top people in every field-executives, managers, entrepreneurs, and leaders, especially military leaders. You practice crisis anticipation by looking into the future three, six, nine, and twelve months ahead and asking, "What could happen to disrupt my business or personal life?"

Develop a Contingency Plan
You need to have a contingency plan for possible emergencies and crises. What steps would you take if something went seriously wrong? What would you do first? What would you do second? How would you react? Develop a scenario—a storyline and a plan—describing how you would handle a negative situation, if it occurred.

Prevent the Recurring Crisis
A crisis, by definition, is a once-only, unexpected negative event. If there is a recurring crisis in your company or your life, one that repeats itself regularly, especially cash crises, then you are dealing with a deeper problem, usually incompetent or poor organization. To ensure that the crisis does not repeat itself, after you have resolved that crisis for the first time, do a thorough debriefing on the problem. What exactly happened? How did it happen? What did we learn? What could we do to make sure it doesn't happen again?

Action Exercise

1. Identify the three worst things that could happen in your business in the next year. What could you do today to minimize the damage from these crises?

2. Identify the three worst things that could happen in your personal and family life, and then take steps to make sure they don't happen.

By Brian Tracy