Even the most iconic brands can stumble and fail. Sometimes, it seems to come out of the blue, but that is rarely true. More likely, failures result from repeated mistakes, none fatal on their own and, thus, easy to sweep aside. When a company, like the furniture brand Mitchell Gold + Bob Williams (MG+BW), folds, leaders find themselves surrounded by a tsunami of uncertainty, questions, and accusations. Customers, employees, shareholders, and investors can be unforgiving, but leaders who take the right actions can reduce the harm, even if the business cannot be resurrected.
The details of what happened at MG+BW are yet to be revealed, and given its private ownership, we may not know more for a long time. The company is in crisis, reportedly facing a lawsuit from an employee just days after locking the doors. Whether or not the company can come to life in a different form depends significantly on what the leaders do now. Unfortunately, they are playing defense, which begs a few questions, at least some of which will be answered due to legal actions. But there are principles that the board can utilize now to avoid making things worse.
Five Things To Do In A Crisis
First, in a crisis, leaders need to recognize it and act like they know. It seems obvious, but over and over again, leaders try to side-step disasters, but that almost always makes matters worse. Far better to be public with the truth, even if the executives cannot reveal details. Leaders fear telling the truth to avoid giving away information that may be used against the company. But telling the truth doesn’t mean opening the kimono to everyone.
Second, avoid platitudes and bromides; they don’t say anything, making companies look weak and scared. When leaders point to the company values but don’t say how they will demonstrate accountability, their words fall flat. For example, if the interim CEO, Chris Moye, had said, “We didn’t handle the aftermath of the global pandemic well,” instead of blaming “the economic climate,” as reported in the Washington Post, people hear accountability, not deflection.
Third, tell people what you will do to reduce the harm. If the leader focuses solely on avoiding all risks, they may dodge a few hits but will cause others. For example, an MG+BW customer reported that an order they placed and paid for in January 2023 was in a warehouse in their hometown. They said the company would not deliver or allow the customer to retrieve it. The customer reported that an employee at the warehouse told them, “We are in liquidation mode.”
Making good on as many commitments as possible eases the angst and cools the anger of customers. Similarly, giving employees fair notice, information, and severance shows good faith. The damage is far worse when businesses close and are closed off in how they behave.
Fourth, it is understandable that leaders want to hide, though few would admit it. Often, leaders retreat with their trusted colleagues, but this can result in relying on the same type of decision-making that got them in trouble in the first place. Expert and confidential advice should include expertise in leadership decisions in a crisis.
Fifth, leaders must confront the emotional toll that failure extracts. Even if the company eventually recovers, the weight of loss can be tough to bear. When leaders ignore their emotions, they allow habits to drive their decisions. When leaders dare to incorporate their reactions, it helps them see things differently and make decisions using heightened, not dimmed, awareness.
Businesses Fail, And We Remember How They Failed
Navigating corporate catastrophe, especially in public, requires courage, not bravado or avoidance. Courage, as a demonstration of character, is what separates great leaders from those who cave under pressure. Leaders can demonstrate character by knowing they are in a crisis, being straightforward, showing empathy, asking for help, and, most importantly, synthesizing emotion rather than trying to avoid it.
For the leaders at MG+BW and anyone in a crisis, answering the question, “What should I do now that exemplifies my ideal self?” It is a profoundly personal and pivotal question that is rarely asked. Asking and answering this question takes courage to live up to who a leader aspires to be, especially in a crisis.
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