Things are going great for you. You’ve got your team firing on all cylinders. There isn’t a challenge you’ve failed to tackle, or a goal you’ve failed to achieve. Morale is high and people believe in you. Then it happens. A crisis.
There is a product recall. A production stoppage. A supply chain shortage or a serious delay in raw materials availability. In any event it means hard conversations with your team and your customers. It means an opening for your competition, which could be worse than it needs to be if the situation is handled poorly. You are expected to stabilize your business and manage through the crisis with minimum impact to your business. And oh yes, you’ll still need to hit those sales targets you committed to at the start of the year.
As a leader this will happen to you. Whether you are in an established organization or one that is in start-up or growth mode, you’ll experience crises that are a normal part of your business. In my experience, about every 18-24 months you can expect a whopper. Sometimes these happen because of factors that are out of your control. A bad crop harvest year. A labor stoppage. A product defect. Other times these can be self-inflicted. Perhaps your company is implementing a major systems upgrade or opening a new distribution facility. Every contingency has been planned for, except for the one that actually occurs. You find yourself and your team in the ditch and it’s up to you to lead the way out of that ditch.
There are a few essential behaviors that you as leader need to exhibit to get through the crisis. It is an opportunity for you to save the situation, solidify your relationships with your team members and your customers, and even come out stronger as a result. Here they are:
Build your foundation
Long before you find yourself in such a crisis, you should be establishing a foundation of trust and credibility with your sales team. A key to surviving the crisis is having front line people that don’t fall into an “us-them” mindset when it is time to explain the situation with customers. When a customer hears a salesperson tell them, “…we’re out of Product X for 6 weeks because somebody in production screwed something up…” it doesn’t engender trust in your customer. In fact, an explanation like that is likely to undermine any confidence the customer has with your company. Rather than be content to wait for the next surprise crisis, she may begin looking for a new supplier right now.
Make sure your salespeople understand your supply chain better than anyone. If possible, your training should include time shadowing workers at every stage of the supply chain. It should include an understanding of any operational initiatives that have the potential for affecting the flow of product to your customers. When causes of interruptions in that flow are foreign or mysterious to your salespeople, the explanations they give to customers when they are on the spot will not build confidence. Your customers will begin thinking about how they hedge or eliminate the risk they are experiencing with your company. That’s bad for your business and good for your competitor.
Help your customers plan ahead
Your customers probably make 80 percent of their sales and profits from 20 percent of your products. If you and they run out of your top products, it’s a crisis. If they run out of the rest of your products, that’s a nuisance. Build your team’s customer planning capability by coaching your customers to keep a reasonable safety stock on the products that are selling well, those that make up the core of their product portfolio. When an outage hits, they’ll have a little cushion and may be able to ride out the crisis with little or no impact to their business.
This takes strong business acumen on the part of your salespeople, which you need to instill as a leader. Your company probably has a predictable fulfillment window on all products. Your team and your customers have become accustomed to the expectation that if they order this week they’ll receive delivery next week. In normal business conditions, it’s easy to become complacent with this ordering cycle, and for customers to shrink safety stock levels to maximize cash flow. Coaching customers on building safety levels on core products takes assertiveness and a strategic advisor mindset from your salespeople. It’s up to you as leader to coach and model that behavior. It will buy you valuable time with your customers when the crisis hits.
Establish your talk track
It is critically important that your customers across your business hear consistent messaging from your sales team. If your company makes public statements about adverse situations that affect customers, your team needs to maintain consistency with those statements. That means you need to huddle with your team immediately and likely on a regular basis until the crisis is resolved. Your team needs to know the operational realties that caused the crisis, what is being done to resolve it, the timeline for resolution, and options they can bring to their customers to alleviate any impact to their business. In some cases your company will want to provide a written status for customers. In my experience, these communications are at such a high organizational level, that your customers will find the explanation of the situation inadequate. They will rely on their sales contacts to provide a more detailed explanation and solution recommendation.
There is a very fine line here. You want consistent messaging, and no ad lib commentary from your salespeople. This is very challenging for your salespeople. After all, they have a personal relationship with their customers. People buy from people. People whom they like. It is natural for your salesperson to want to go off script in order to assuage the customer. You need to manage this extremely closely. Do not allow written communications on the crisis that deviate from the company’s written commentary. Coach your team not to offer personal opinion on the causes or offer their view on who is to blame. The likelihood that any miscommunication like these will be used against you by your competitors is very high. If your competitor is able to solve this problem, and your customer perceives your company as unreliable and unpredictable, you may lose more than a sale. You may lose the customer.
Show up
This might be the most important thing you do as a leader in a crisis. It’s not fun but it is essential and says a lot about who you are as a leader.
Don’t become invisible in a crisis. Don’t force your team to make up answers about what happened or when things will get better. Don’t expect your customers to ride it out because they are so dependent on your great products. It’s true, the problem will eventually be resolved and you’ll once again be back to normal production and delivery cycles. But the way you handle yourself will leave a lasting impression on everyone who depends on your leadership. Your personal brand will be altered by your behavior, good or bad.
Be there for your team. Have meetings. Provide status updates. Demonstrate to them that you have your finger on the pulse and your voice is being heard as part of the effort to resolve the problem. In a big crisis, I liked to have a regularly scheduled war room type conference call. In some cases I did this at the end of each day so I could provide any updates and hear about everyone’s experiences with customers. It was an opportunity for everyone to discuss how they were handling customers and a chance for us to refine our tactics. It was also a chance for me to get the pulse of the reaction in the marketplace so I could bring that back to the crisis resolution team.
Be there for your customers. This is where you really need to show up. Physically show up. Your salesperson needs air cover. They have a strong and mostly positive relationship with your customer. Preserving that relationship should be the priority for you and your company. Your customer wants to hear from a management voice why this is happening to their business and what you intend to do about it. You need to show up, take the hits, and restore confidence so that relationship can continue and even strengthen. Oh and by the way, this better not be the first time you are meeting the customer. Make sure you are building a solid foundation here. Establish these relationships when times are good.
When I was a young salesperson I used to go to my boss occasionally and say, “Frank, I have a big problem!” He would smile and say to me, “Jim, we don’t have problems. We have opportunities.”
A crisis is an opportunity. An opportunity for you to shine as a leader. An opportunity to lead. Merriam-Webster says that to lead is “to guide on a way especially by going in advance.”
You’ve heard great leaders described as people who get out in front of a crisis.
Go. Get out in front. Stand tall in your role as leader. Establish your foundation. Plan ahead. Communicate Clearly. Show up.
Everyone is counting on you to lead them through the crisis.
Lead well.
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