Not long ago I bought a Montblanc Silver Solitaire fountain pen from one of the upmarket shopping malls in Bangalore. It was meant for a gift, and when I reached home I found that Rs 35,000 pen had a number of defects such as scratches on the cap and body, its silver faded at several patches. It was clearly a display piece and was not worthy of sale for an upmarket brand like Montblanc. I tried to call the shop general manager, but he never took my calls, nor would the shop take the item back. I tried in vain to get the item replaced, but they did not have another piece of the same model.

I was directed to call their head office. To cut a long story short, after four months of hard pushing, I finally made them take the defective pen back. However they did not return my money; instead they issued a credit note for the equivalent am­ount, which I was required to spend in their mall within six months! I protested and insisted on getting back my money. I wrote to a consumer forum and as per the advice from a lawyer sent a registered letter to the general manager of the mall. After another three mo­nths, finally, the general manager met me and apologised for the inc­onvenience and refunded my mon­ey. But, by then the damage was done: I would never set foot inside their mall again.

What the mall lacked was crisis management ability at every level. According to the mall general manager, his floor managers did not have the power to refund the money, which resulted in delay. But that could have been explained to the customer in a polite way and pretty quickly.

Every business should anticipate at least one crisis in a year, if not every month in some businesses. These could be minor ones such as excess stock during a month to major ones costing the business itself such as being named in a lawsuit and having an executive accused of impropriety. Other nightmares include sudden financial decline, serious accidents and product/shop/service boycotts.

Remember the case of worm-hit Cadbury’s a couple of years ago? Here is a typical case of how not to manage the crisis. Here was this company leading in the chocolates market and suddenly people discover worms in their chocolates. What surprised every customer is the continued denial by the company officials including its very able MD. What they forgot while denying there was a quality problem at their end, and pointing fingers at their partners (trade), was the customer and his/her sentiments. Their qualified MBAs at the top should have remembered their lessons in Marketing 101 – Tylenol case in the US. Johnson & Johnson recalled all the products in trade shelves and re-launched only after redesigning the packages to make them tamper-resistant thereby providing a visible fix to the problem. This was followed up by aggressive advertising and promotion, which included admitting the problem. They recovered 95 per cent of their lost market share within six months. As seen in this case, few firms develop a crisis communications plan. In this country even big companies lack it.

The second case, which happened after the Cadbury incident, shows how corporations can react quickly to control damage. This is that of DHL and its policy of grooming. When a leading daily carried the news that DHL had dismissed a few employees who were growing beards, it was already old news. Company had by then reversed the rules to accommodate their employee sentiments. And, newspapers carried the news immediately on its next edition itself saving DHL from a major crisis.

According to David Aaker the best approach to handling a disaster (besides being lucky) usually is to avoid it. Following Aaker’s suggestion, one should identify every downside risk inherent to one’s business, before a disaster is even hinted. Then perform mental fire drills with probable procedures and responses.

Once a crisis hits, start implementing your plan while asking, “What now?” Your goals are staying ahead of unfolding events, while conveying to the public that your company is dealing with the situation responsible and effectively. You may not have all the facts or answers, but you are definitely getting to the bottom of things.

The designee should always have a prepared statement; even if it merely expresses that accurate information isn’t available yet, but will be provided the moment it’s confirmed.

Being candid about the actions of a deranged employee does not obligate your spokesperson to reveal the company’s tenuous financial position or unveil its R&D project. The press should be kept focused on the employee and the vents leading up to his or her actions. Ideally, your basic crisis communications policies should be included in the employee handbook and briefly discussed with every new recruit. The rank-and-file will appreciate knowing a specific plan is in place to distance them from the media firing line.

The most beneficial crisis communications plan begins with gathering all the troops to consider possible disasters. Awareness of inherent risks and their potential consequences tends to render complacent employees more responsible. What began merely as a public relations exercise ends up boosting company-wide quality efforts.

The writer is CEO and MD of CustomerLab Solutions