By: Amelia Perfetto
Every office has a fire escape plan. Employees know where the exits are, when to evacuate, and who to follow in an emergency. But when it comes to reputational fires, such as a harassment allegation, a data breach, or executive misconduct, many businesses, especially small and medium-sized businesses, find themselves woefully unprepared.
When a crisis hits, unlike a physical fire, evacuating the premises isn’t an option. You must remain and address the consequences as they unfold. Oftentimes, crises do not wait for a convenient moment. They strike just before the holidays, in the middle of a deal, or right when a company is celebrating a major milestone. The damage a crisis causes is not just physical; it can undermine public trust, employee morale, and investor confidence for years to come. For small and medium businesses with fewer resources and leaner teams, the stakes can be even higher. Having an established crisis management plan, supported by trusted legal counsel, is essential in these circumstances.
Building a Culture of Preparedness
The best crisis management is proactive, rather than reactive. Companies that have already taken the time and care to foster a culture of transparency and respect are often better positioned to weather crises because they have trust built into their foundations.
At its core, crisis management is about protecting people as much as protecting the company’s reputation. Employees want to feel safe, clients want to feel respected, and investors want to feel confident. The manner in which a company responds in its most challenging moments will be more impactful in the long-term than any flashy headlines.
Preparing Your Business for a Crisis
To be ready before disaster strikes, companies of all sizes should implement the following practices:
Establish and Maintain Relationships with Outside Counsel and Investigators
In the throes of a crisis, time is the most limited resource. Having trusted legal counsel and investigators who are already familiar with your business means that they can be mobilized immediately, without the delay of onboarding new advisors under pressure.
Legal counsel play a critical role in ensuring that a company’s crisis response is both compliant and strategic. Counsel can help manage privilege, coordinate with investigators, and guide internal communications to prevent missteps that could create further liability.
For example, we once advised a small tech company who faced an urgent data breach over a long weekend. Because they had already engaged us for annual compliance reviews, we were intimately familiar with the ins and outs of the company. Our pre-existing relationship allowed us to act within hours to guide our client through the crisis. We drafted carefully-worded communications, coordinated with the appropriate authorities, and assisted in notifying employees and clients of the issue. This situation exemplifies that early familiarity can be crucial in containing a crisis before it escalates.
Implement Training and Crisis Simulations
Just as fire drills prepare employees for emergencies, crisis-specific training ensures that everyone understands the chain of command, reporting protocols, and their role in managing the situation. Regular tabletop exercises help leadership teams practice decision-making in high-pressure scenarios.
For instance, conducting annual “tabletop” crisis exercises whereby leadership walks through hypothetical scenarios like workplace accidents or public allegations, is an excellent practice in ensuring preparedness. If and when actual incidents later occur, leadership will be well-equipped to respond calmly and cohesively because they have already practiced the process.
Small and medium-sized businesses benefit greatly from these exercises because each individual’s actions have an outsized impact.
Set Protocol for Messaging
It is important to ensure that all messaging during a crisis is restricted to verified facts. Companies should avoid speculation or over-disclosure, while acknowledging what is known and committing to providing updates. Transparency builds trust, while speculation undermines it.
Document Escalation Triggers
Establish criteria for when crisis issues must be escalated to leadership, board members, or regulators. Without predefined thresholds, there is a risk of inconsistent responses, delayed actions, or even overreaction, all of which can exacerbate a crisis.
For example, when a crisis issue becomes public knowledge, escalation is crucial. Examples of this include public lawsuits, negative media reports or widespread social media discourse (e.g. the Astronomer CEO Coldplay scandal). When a crisis has reached this point, the potential for reputational damage and the need for coordinated communication strategies demands the attention of leadership. Issues with the potential for substantial financial losses, violations of the law, or the endangerment of individuals’ health and safety likewise require escalation.
By clearly outlining these thresholds, organizations can ensure that even in high-pressure situations, decision-making remains consistent, well-informed, and aligned with its strategic objectives and values. This approach mitigates the immediate impact of a crisis while also strengthening the organization’s resilience and capacity for effective recovery.
Conclusion
Though crises are inevitable, the damage that they cause does not have to be. Organizations that prepare in advance by building sustainable cultures, establishing clear protocols, and maintaining relationships with trusted legal and investigative advisors are well-positioned to respond decisively and protect both their people and their reputation.
Effective crisis management is more than a reactive measure; it is a strategic investment in resilience. How a company responds in its most challenging moments defines not only its public image but also the confidence of employees, clients, and investors.
