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Blog - Leadership from the front is what’s needed during a business crisis

Q I’ve been watching the fallout from the Ryanair pilot rota incident with interest – mainly what the company (and its boss) have been saying. Is there a right way to handle a business crisis?

A In general, if disastrous news reaches the media, the boss must decide whether to hide behind a company spokesman or pick up the phone and take it on the chin.

I would always be the one who does the talking – “a company spokesman said” carries the implication that the carefully prepared statement is hiding some of the truth.

It must be best to take the flak yourself, hold up your hands and never blame anyone else. Paint the worst picture from day one and avoid having to drip feed more bad news as the saga unfolds.

The right message is: “I take full responsibility, I regret letting our customers down, and I get the need to make sure that it never happens again.” If you have cost your customers money, pay compensation –
be generous and pay up quickly. It isn’t clever to see how little you can get away with or delay payouts to help your cash flow.

The best way to protect your reputation is to persuade everyone
to move on as soon as possible. The public can forgive big mistakes if you’re genuinely sorry and pay fully for the error.

Being an old fashioned traveller, I still find it difficult to stick to the Ryanair rules, but I’ve always admired the blunt and upfront leadership of its chief executive, Michael O’Leary.

However, I’m not sure that he got it right recently when he spoke
about the issue. Perhaps he should have taken more personal responsibility, simply saying: “I put my hands up; it was my job to make sure that we had enough pilots lined up for every plane.” With net profits of more than £1bn a year, it must be worth spending money on compensation to maintain the firm’s reputation.
I’m reluctant to criticise Ryanair, because I’ve never faced that sort of nightmare. With close to 500,000 customers a week, we make a few mistakes and some customers want my personal reaction, but so far, we haven’t run out of cobblers and key cutters,
or had to close a lot of shops for more than a month.

It pays to be paranoid. I’m constantly wondering whether disaster will strike, but have no faith in the standard risk assessment matrix templates that are used in many boardrooms.

Every three years, I write about our top 10 disaster scenarios: real-life predictions of things that could go horribly wrong, such as
ruining a royal pair of trousers, or making all of our personnel files freely available on the internet (there are several much worse than that, but I prefer to keep the details to myself!).

By writing about nightmares that may be waiting to happen, I hope that we will be properly prepared if our worst fears come true. I hope that I will never have to find out how I would react.
Q My B2B firm has some central services that could be offered to franchisees. We have only been trading a year, but we’re already receiving interest on that front – is it too early to consider franchising?

A Think carefully before going down the franchise route.

It isn’t just a question of signing up franchise partners and letting them get on with it, because to be a successful franchisee, you need to acquire some completely new and different skills.

Take your time. You’re only in your second year and have a lot to learn. Every business is shaped by experience – and even the luckiest entrepreneur makes a few initial mistakes.

Give yourself a few more years to build your business and prove that it makes money before asking anyone else to invest in the idea. Lots
of other people offer advice in people management, so you must not only demonstrate success, but also offer an innovative product to create a company that can be franchised.

If, after all the hard work, you develop a unique proposition, it may be better to forget about franchising and keep it all to yourself.

Sir John Timpson is chairman of the high-street services provider, Timpson. Send him an email at askjohn@telegraph.co.uk
source:http://www.telegraph.co.uk/connect/small-business/leadership-from-the-front-needed-in-a-business-crisis/