Caliber CEO, Shahar Silbershatz, shares the steps to follow when navigating a corporate crisis.

British prime minister Harold Macmillan was once asked what a statesman’s greatest challenge was. His famous response? “Events, dear boy, events.” Or, as another embattled politician put it rather more bluntly, many years later: “Stuff happens.”

Stuff certainly does happen — especially in the corporate world — which is why recent headlines about the lack of reputation control among UK businesses were so surprising.

In a survey of 500 businesses, two-fifths said they “lack expertise in reputation control”, 98% “struggle” with it, and a third have experienced negative media coverage.

These figures would be alarming in any context. But here’s the thing. Corporate crises are more likely than ever. For instance, in the 1990s, the average year saw 130 newspaper headlines use the word “crisis” and refer to one of the top 100 companies in the Forbes Global 2000 list. By the middle of the last decade, that figure was 1,030.

Corporate crises are also costlier. In 2010, corporations paid 11 billion USD in penalties for regulatory infractions in the US. Six years later, they paid 59 billion USD.

According to McKinsey, there are at least four reasons why corporate crises are more common today. For one thing, products and organisations are more complex. At the same time, stakeholders have higher expectations. Customers are more likely to sue or shun a company they deem unethical. Shareholder activism is on the rise, too. There’s also increasing societal mistrust of institutions, McKinsey argued. And the speed of business — from real-time communications via social media to ever-faster product development schedules — also makes corporate crises more likely than ever.

Experiencing a corporate crisis isn’t inevitable, of course. But if the storm hits, here’s how to mitigate it.

First, plan to go on a long journey of rebuilding trust — one that may take months, if not years. Second, don’t make promises you can’t deliver. Third, engage immediately with your wider stakeholder community — meaning, potentially, employees, consumers, customers, partners, suppliers, regulators, shareholders, opinion leaders and the media. 

Fourth, rally the troops internally. Be transparent with employees and do whatever it takes to keep them motivated. Fifth, don’t be afraid to bring about deep-seated internal change to the organisation, wherever it’s needed.

Finally, use facts and data to inform, monitor, and optimise your recovery. How? By tracking in real-time what stakeholders think of your company and your response to the crisis. Using an always-on stakeholder perception tracker can tell you what is — or isn’t — working, allowing you to pump the brakes, hit the accelerator or change course.

Of course, it’s wise in any situation — good or bad — to listen to and consider your stakeholders’ perspectives. Smart companies track those perspectives on a continuous basis — and use them to make decisions that build trust and bolster their reputation.

Why? Because having a strong reputation can help a company in countless ways, from increasing customer loyalty to attracting high-quality talent to retaining employees.

It’s also a bulwark in any crisis. For one thing, it can mitigate the reputational damage and make the crisis recovery shorter and easier. It can also guide a company’s internal activities and external communications, in real-time, allowing it to explain its positions and actions widely and clearly.

Finally, as another British prime minister famously said, never let a good crisis go to waste. Companies that find themselves in the mire have an opportunity to demonstrate their values and purpose — and see in real time that it’s having a positive impact. Stuff happens — but it shouldn’t mean your business can’t prepare or respond accordingly.