If you are running a company, whether as the CEO or owner, you probably want it to succeed at the highest echelons of the niche or industry in which you operate. Maybe you have achieved that, and if so, you’ve probably seen financial benefits and enjoyed a great deal of personal satisfaction. To see your company and brand succeed can make you feel fulfilled like few other things can.
However, you never know when a devastating lawsuit will seriously impact your business. It can happen suddenly, seemingly out of nowhere. Maybe you make a product that harms someone, or perhaps you are looking at a sexual harassment allegation or an accusation of racism in your hiring practices.
No matter the reason for the lawsuit, recovering afterward can challenge you and your business entity like nothing you’ve ever experienced before. In private, perhaps you must try to recover from the intangible cost of emotional pain you’re feeling now that your beloved company has taken a major hit. That cost might not be only monetary if you must settle a lawsuit or even a class action lawsuit. You may notice poor employee morale as well.
In this article, we’ll examine how your business can recover following one of these incidents. In the moment, the negative attention the company receives and the poor worker mindsets might seem insurmountable. However, you can usually right the ship by taking a few logical, common-sense steps to start moving along on the proper course again.
Right the Wrong
First, you must right the wrong. That usually involves paying for what your company did that someone found objectionable.
Maybe you must pay someone following a civil action. Whether your company treated them poorly, you came out with a product that hurt someone, or whatever other reason initiated the lawsuit, you must make compensation. You must also admit your wrongdoing and pledge that you’ll do better.
Often, that’s the hardest part. Maybe, as the owner or CEO, you didn’t do anything wrong yourself. If you’re looking at a racism allegation, a sexual harassment charge, or anything along those lines, perhaps you’re not the guilty party, and you can point to some other employee instead.
Unfortunately, that’s not the point. If you’re at the head of the company, you must take responsibility, even if you knew nothing about what happened. You must declare under no uncertain terms that you will not allow the behavior to continue. If you’re dealing with the aftermath of one of your products hurting someone, you must institute more stringent safety checks before allowing anything with your company’s name on it to hit the market.
Address Your Employees
You must take some time to draft an internal memo and send it to every employee from the top down. Everyone should see it, from an intern working in the mailroom to your second in command. You must take the time to say the right thing, but you can’t just do it lip service. You have to change the culture that allowed the issue to happen, whatever it was.
You might even call a company-wide meeting and say it in person. Do what feels best, but remember, you need to boost morale. That means putting a brave face on things if you have any hope of regaining the ground you lost through this embarrassing and damaging episode.
Hire a Crisis Management Consultant or Firm
You may also need to hire a crisis management consultant. Sometimes, you can get a highly-regarded freelancer, or you may hire an entire firm instead. To some degree, your company’s size dictates that. If you head up a massive conglomerate, then hiring a firm with an entire team at its disposal probably makes sense.
Whether you hire an individual or a firm, you must explain to them what happened and then take their advice. They might suggest that you call a press conference and address the media. If you lost face because of this lawsuit, you must put a positive spin on things for the public, just like you did for your employees behind the scenes.
You must publicly accept responsibility, break down how the wrongful action occurred, and then talk about specific actions you’re taking to address it. If you have social media accounts for your company, as so many businesses do these days, you can issue a statement via those channels as well. You should also address any shareholders or other partners who you must reassure. This will begin to repair everyone’s trust in you and your brand.
Change Your Culture
Then, once you have apologized to everyone, you must conduct your company’s culture differently, just like you said you would. That will look different depending on what exactly happened.
If you came out with a product that harmed people, you must have much more stringent oversight in your R and D department. If you faced a lawsuit for harassment, discrimination, or something along those lines, you need to make sure safeguards exist that will prevent that from happening again.
Obviously, if you can point to a single person or a few individuals who behaved poorly and caused the lawsuit, you must fire them. They can’t stay with the company, or it’s obvious you don’t really care about instituting meaningful change at all.
Regaining the public’s trust, not to mention that of your workers, will probably take time. Depending on the size of the scandal and who your company hurt, it could take months or years till everyone sees you as the shining beacon you were before.
You should expect that and prepare for it. You might lose some standing in the market. You may see some lean times with reduced profit, or you might even operate at a loss for a while.
If you stay the course, though, and there’s no further impropriety, you should get through the storm eventually. In time, people likely won’t forget, but hopefully, they will at least forgive.
