What do you do when a customer
complains about shoddy workmanship? Do you defend the work of
your employee but still offer to "come out and look at it
when you are in the area?"
What happens when your bookkeeper
determines your best service person is overcharging customers
for parts and may be installing unnecessary parts? Do you keep
the money and let the employee continue deceiving your customers?
What do you do when employees
report that parts are failing too soon? Do you continue to install
them just because the manufacturer says there is nothing wrong?
What do you say when a television
reporter calls to verify the details? What are you going to do
when the story hits the 5 o'clock news? What do you tell your
employees, family and friends? How will you control the damage
after the fact?
We all know what happened to
Texaco a few years ago when printed transcripts revealed that
company executives made racially offensive comments and discussed
withholding evidence from a long-running discrimination lawsuit.
Its stock wavered, government regulators more closely scrutinized
its hiring and promotion practices, and customers defected.
We live in a very litigious state.
Juries in this state apparently believe that corporations have
responsibilities to the public based on their role and power
in our society. Think I'm joking?
A Los Angeles jury recently awarded
six people $4.9 billion because the gas tank exploded when their
Chevy Malibu was rear-ended. $4.8 billion was punitive damages.
Ford Motor was blamed for a Bronco rolling over and killing the
family inside. Relatives were awarded $290 million in punitive
damages. In both these cases the companies knew there were problems
with the vehicles but it was determined the cost of lawsuits
would be cheaper than recalling all of the vehicles. Even though
these awards will probably be reduced, the cost of time and legal
fees will be enormous. Do you want to do business with a company
that puts dollars ahead of your family's safety?
After the fact is too late. Part
of Johnson and Johnson's ability to react to the cyanide in their
Tylenol was founder Robert Wood Johnson's philosophy. He established
J&J in 1885 with the belief that shareholders, customers,
local communities, and employees were all constituents of the
company. Their full-disclosure policy focused on informing the
public rather than deflecting blame. As a result, Tylenol reclaimed
70 percent of its lost sales within five months of the scare.
When information is not forthcoming
or leaked a little at a time, reporters start digging deeper.
The headlines remain longer. If you doubt these statements, think
about President Clinton's Monicagate problem.
What is your worst nightmare?
What will you do when it becomes reality in full color? How will
your employees react? The public perceives you and your company
based upon how you respond to reporters' questions.
Companies that have successfully
handled bad press had a crisis plan in place. All employees knew
who was the designated contact person. When a crisis happened,
that person dropped all other tasks and became available to deal
with the developing situation. As demonstrated by SwissAir after
one of its planes crashed off Nova Scotia, this is not a time
to worry about the cost of "doing the right thing"
or assigning blame. It is the time to take care of people's emotions.
It is best to be truthful and
honest in your answers. Most of the time whatever you say is
recorded and made available later for anyone who chooses to sue.
Sugarcoating your words will only make life more difficult down
the road. The "no comment" response is always regarded
suspiciously. It is better to say, "You know I can't comment
on that because it would be a breach of client confidentiality."
Another reply might be, "This case is in litigation. I can't
comment on that until it is settled."
Telling the truth simply and
without embellishments is the safest course. If you need to research
the problem, conduct tests on a part, obtain maintenance records,
say so. Then offer to get back to the reporter once you have
the information.
Strategic pre-planning allows
employees to respond appropriately and quickly to any complaints
before they reach unmanageable proportions. Before they cost
a lot of time. Doing the "right thing" by our shareholders,
customers, employees and community may mean more profit in the
long run.
Maybe honesty isn't just the
best policy--it's also the best strategy.
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By Jan
Smith
(916) 332-7247
email: JSmith@Bennington-
Group.com
Topic: Change
Visit Jan
Smith's web site for more ideas to successfully manage your business.
Jan coaches business owners and managers how to balance working
on their business with solving day-to-day issues.
Make Your Advertising
Message Stand Out With Original Stock
Photography -- Only $30 per single image -- $95 for panoramas.
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