The Crisis Scenario

The Sept. 11 terrorist attacks changed life and business as we know it. Today, CEOs across America are taking the time to learn a skill few ever thought they would need: how to handle a crisis.

“It doesn’t matter whether it’s a multimillion-dollar company or a one-person entrepreneur,” says Mary Balice of Citigate Communications, which offers crisis planning and training. “If you’re in business, you need to have a practiced plan for dealing with urgent situations.”

What type of crisis situations could a builder face? Job-site accidents resulting in severe injury or death of employees and subcontractors. Storm-related damage. Lawsuits. Product failures. Arson. Workplace violence.

Insurance is available to assist in such situations, but a faceless insurance company won’t be the one answering the media’s questions on the 6 p.m. newscast. Nor will it be consoling employees and trying to maintain business operations.

Balice says there are two types of crises: negative situations that happen directly to you and negative situations that pull you in.

“Product failures that reflect poorly on a builder’s skills are a classic example,” she says. “The EIFS situation that went nationwide with prime-time network television interviews touched thousands of builders. Suddenly builders were defending the products they selected, their installation techniques and their company’s reputations. Worse than damages from lawsuits, many builders suffered so much damaging publicity that their businesses failed.”

A well-prepared builder will be able to position the company for a strong recovery by handling the initial crisis professionally, compassionately and responsibly, Balice says.

Emergency Versus Crisis
Emergency plans deal with the physical aspects of a crisis, such as evacuation of a facility or how to handle bomb threats. A crisis plan equips top management to deal publicly and privately with creating and communicating messages about a crisis.

A builder with a project struck by severe weather might face both emergency and crisis situations. Employees could be injured during the storm by flying debris, and the frames of a dozen homes could be severely damaged. A builder would need an emergency plan as a guide through the logistics of the rebuilding and repair phase. And a crisis plan would provide key training for handling media and home buyer questions about the devastation.

“Getting a plan in writing is critical,” says Jeff Braun of crisis training company The Ammerman Experience. “Any builder who has just found out an earthquake has completely destroyed his under-construction homes is going to be in shock and emotional. Having a step-by-step written document to jump-start the process and help organizations manage the strategic decision-making and deployment of resources is necessary in responding to a crisis situation.”

Practicing the plan on a regular basis also is essential, says Braun. He recommends having key people act out their roles in different scenarios.

“We tell our clients to always develop key messages involving the three C’s and one R,” Balice says. “Every message should include expressions of compassion, cooperation and credibility plus taking responsibility for getting to the bottom of the situation.”

Such a clear, concise message conveys that you’re doing everything possible during a difficult time. “Some companies are concerned that their ‘responsibility’ statement will look like an admission of guilt,” Balice says. “Don’t fall into that trap.”

The New World
Many believe that the terrorist acts were a wake-up call for having more plans in place to handle crisis fallout.

“A builder who invests time and training for crisis situations strengthens his company for future success,” says Betty Christy of the NAHB’s public affairs division.