Whenever things are about to go bad/start to go bad/go bad, there are things that could be done.
What could be a good option can become a terrible option if it is done too early/too late; before or after something else that properly sequenced would have enhanced positive prospects. Everything has some deadline that has to be noted. Many things are more valuable for the reason that they have not been done. The prospect that they might be done may represent leverage opportunities.
In a companion post in this series, The First Meeting with Crisis Counsel, I laid out the first 48-72 hours of a crisis event if I am representing the company. At the end of that first 72-hour period, the shift must be made to prioritizing the options. This means that all the relevant information must be mastered from reviewing the “files” and visiting with the people involved. These resources may be scattered around the country or around the world. You don’t get on a plane and run around trying to visit everybody. There isn’t time. You do it on the phone; in video conferences; and by data/file transmission. What took days and weeks ten years ago is now done in one or two days.
Account must be taken of potential legal and other exposures. Is there a prospect of criminal responsibility, and, if so, how must that be dealt with? Similarly, account must be taken of questions of securities law, antitrust law, intellectual property law, foreign trade licensing.
By day five you are ready to lay out what the most probable scenario is and what preliminary options should be considered. In a normal working mode this would have consumed a month or more. But things may have to be done rapidly. A decision has to be made about what if anything is to be said publicly, what you must say to a stock exchange to get your stock traded again or to prevent the exchange from putting a stop trading order on it. Lenders are banging on the door demanding answers. Your accountants are chewing their nails about exposure they may have if the trouble can be related to audit failure. Getting rapid control of the situation is an urgent priority. During that first few days, some hand holding may have to be done. Your CFO has to make love to your bankers, lenders and accountants. Depending upon the nature of the crisis, vendors and customers may also be “nervous” and require some TLC.
It is never a case of “the principle of the thing.” It is never true that there is only one principle in play. There are always several principles in play, and the mission is to assign to each the weight and priority it deserves. Morality is rarely an operative issue in dealing with crisis unless the crisis arose from acts of immorality. The arena of resolution is more likely to be legal and financial, without benefit of clergy.
During these first few days channels have been opened to potential adversaries, and it is now time to call them back and give them some form of update. It may be no more than that you still need a few more days to get everything under control and will then get back to them. Even that is reassuring.
Frequently, what is most needed is a cooling off period, depending upon the nature of the crisis. A willingness to “stand by” can sometimes be valuable do if everyone is willing to “stand by.” How that is formalized is important, as no one will be willing to waive rights or options in this interim. A near term running out of a statute of limitations on assertable claims may need to be extended by agreement. Near term option dates or other drop dead dates may need to be dealt with. These decisions always involve emotional issues on the part of the decision makers, and crisis counsel must be prepared to be their mentor.
All this may not be a one-man show. Other disciplines may need to be brought to bear. How that is done is also delicate. For instance, although you need access to your auditors, you don’t ever want to use your auditors as your forensic accountancy resource. How to balance that while the prospect of forensic accountancy may be scaring the bloody hell out of your auditors and making them reluctant to express themselves openly is great crisis theater.
Now we are ready for week two, right?