Look inside to manage the crisis outside

Earlier this month, a retired Tulsa CEO recounted the crises he managed during his 40-year career as an energy executive. Between natural disasters, equipment malfunctions, and a fluctuating market, he found himself before glaring television cameras, hostile town-hall gatherings, skeptical juries and elected officials looking to score points.

Steering an organization through a crisis is part of a leader’s job. Handled poorly, it can cost the company dearly. Shareholder value may drop, as can reputation, regulatory standing, the ability to recruit top talent – even relationships with suppliers and banks can tank.

Steering an organization through a crisis is part of a leader’s job. Handled poorly, it can cost the company dearly. Shareholder value may drop, as can reputation, regulatory standing, the ability to recruit top talent – even relationships with suppliers and banks can tank.

Yet, during the executive’s comments at our firm’s Leadership & Reputation Academy, another impact seemed to hurt most: the loss of confidence among staff.

More than a decade ago, a company employee was accused of embezzling more than $6 million. It was a prototypical case. The embezzler was “the last person you would expect,” the executive said. As the heist worked, the employee gained more confidence, took more chances and ultimately was caught.

He was found guilty and served time. But now the leadership team had another dilemma: facing employees who had serious questions about the competence of company leadership. “How could this have happened? How do you let $6 million slip through the cracks? How could our financial controls have been so lax?”

Those were tough days, the executive said. There was no shortcut to regaining trust. It required an overhaul of the company’s financial controls and processes. Mainly, though, it took effective communication – listening, understanding, honesty, and not being defensive. You can’t spin your way out of it.

I’m curious how Boeing’s internal culture has been affected by its recent airliner crashes. The external ramifications are obvious, and that’s where most leaders and crisis experts would focus attention. But Boeing’s long-term viability may hinge on its ability to preserve the tenacity and confidence of its engineers. No one wants to be part of a company whose reputation – for being able to keep planes in the air – has taken a blow.

Boeing’s challenge now is to answer those tough questions from employees. Especially the questions that are never asked. “How could this happen? What does this mean? Is this the company I thought it was?”

As with any other crisis, a key to recovery is leadership’s ability to stay hyper-focused of the questions brewing inside.

Russ Florence is a partner of Schnake Turnbo Frank. He shares a monthly column in thein The Journal Record.