When I was in my 20s, I had the opportunity to work for a renowned turnaround management expert named Charlie. A large, blustery Texan who loudly barked orders to everyone around him, Charlie was hired to salvage companies in crisis. During the last year, I’ve thought a lot about the business lessons I learned from Charlie, one of which was to always have a contingency plan. As Charlie would say, a plan takes the emotion out of decision-making, which is critical in a crisis.

Charlie and his team could swoop into a flailing company and diagnose the problems rapidly, often recommending swift cuts to stem the bleeding while simultaneously addressing larger strategic issues. Frequently Charlie was brought in too late, but regardless of timing, clients struggled to make difficult choices and changes quickly enough. 

Tagging along with Charlie on engagements, I watched grown men break down sobbing as they faced the often harsh reality that they’d waited too long to address the declines or forces that had disrupted their businesses. But even then, with the realization they might lose everything, they frequently hesitated, argued over data and logic, and spiraled out of control. 

Back at the office, Charlie would download, pointing out that the leaders’ own emotions, attachment and egos were often even bigger obstacles to success than deteriorating market conditions, weak sales or competitors. He was often frustrated that they could not just make the changes he recommended and move forward, but he acknowledged that change is difficult and crisis can paralyze even the most successful businessperson. It’s hard to create a road map when the road is crumbling under you.

I could almost hear Charlie’s voice as I read a recent Forbes.com article by Edward Segal titled “These Crisis Management New Year’s Resolutions Are For Every Business Leader.” The author stated, “If 2020 taught business executives anything, it should be the importance of having crisis management plans.” The article emphasized that many business leaders had weathered the pandemic and economic downturn but cautioned that “there will always be another crisis lurking around the corner.” 

Among the list of resolutions offered by the Forbes article was the obvious: If you haven’t already done so, prepare a crisis management plan immediately. And if you have one, review and refine it.

The importance of having a crisis management plan hit home for me on 9/11 when the company I worked for, located two blocks from the World Trade Center, experienced extreme crisis and business interruption. Our contingency manual, recently created to prepare for potential Y2K conversion issues, provided clear protocols for response and communication. Despite overwhelming grief, loss and confusion, we were able to communicate, execute our plan and get back up and running quickly. 

With that stark reminder to always prepare for the unexpected, I have created crisis plans for every business I’ve led. Disaster recovery manuals outline our company’s response in the event of various scenarios ranging from disasters to business interruption and include the crisis response team and contact lists. But, in addition to a plan for business interruption, it’s equally important to create scenario plans for other types of crisis or decline, create financial reserves, examine resources needed to respond, and test and share the plan regularly.  

While we all hope the worst effects of the pandemic and economic decline are behind us, change will always be a part of running a business. Having contingency plans enables leaders to move swiftly, without confusion or undue emotion.  

As Charlie would say, don’t wait for a crisis to create your crisis plan. ν