Crisis Mode: What to Do When Something Goes Wrong in Your Startup

Remain calm

No matter how carefully you chart the growth of your startup, and plan for contingencies, eventually something will go wrong, and you’ll be forced to go into “crisis mode.” You might have missed an important deadline, or you might see the failure of a critical piece of equipment, or you might notice a vital software bug the day before a big presentation.

The question isn’t whether or not you’ll experience these crises—you almost certainly will—but rather, it’s how you choose to approach the situation.

How to Handle a Crisis

These steps can help you ensure you navigate the crisis successfully:

  1. Remain calm. First, try to remain calm. If you become too frustrated or irritated, you won’t be able to think clearly, and you’ll be more likely to make an emotional, reactive decision rather than a logical, calculated one. On top of that, your employees will be looking to you as an example and a source of inspiration; if you remain calm, you’ll inspire calmness throughout the organization. If you allow your emotions to get the better of you, you’ll contribute to an environment of emotional volatility.
  2. Perform a root cause analysis. Take the time to perform a root cause analysis. Depending on the situation, this may take a few minutes to a few days—but even if the situation is urgent, it’s a good idea to get started early. The sooner you learn what the root cause of the situation was, the sooner you can work to address it. Look at the precipitating factors and underlying causes, and make sure to ask questions of the core people involved with the project.
  3. Prevent further damage. If there’s a chance for further damage to take place, work quickly to stop the bleeding. For example, if you accidentally pushed an update to your app that compromises user security, pull the update and notify any users who haven’t downloaded it to avoid doing so until you remedy the situation. This should be your priority, since it will mitigate the full scope of the damage.
  4. Notify the affected parties. It may already be a part of the “preventing further damage” element of your strategy, but if it isn’t, make sure you notify any affected parties. For example, you may need to let your investors know you aren’t going to make your launch date. Proactive communication is far better than finding out naturally, and demonstrates your integrity and acknowledgment of the mistake. You can also gauge their reactions to determine the severity of the impact.
  5. Appoint a crisis manager. You may want to get your hands on the problem yourself, but it’s better if you delegate the responsibility to a capable party. That way, you can stay focused on high-level issues and keep operations running. Appoint a “crisis manager” who can oversee the repair and recovery process, and coordinate the resources necessary to rectify the situation. You’ll need to be available for questions or direction, but ultimately, they’ll be responsible for the primary duties.
  6. Make repairs or reparations. At this time, things should have calmed enough for you to commit the necessary repairs or reparations. If there’s actual damage to your products or services, get your team to start correcting them. If it was a one-time incident that caused reputation damage or hurt your customers in other ways, now’s the time to draft a formal apology, and come up with a way to make it up to affected users.
  7. Prevent the crisis from recurring. Once you’ve begun the process of repair, you can take a step back and learn from the situation. Was there a procedural error that led to this? If so, you may need to draft new steps of the process. Was this a problem with oversight or execution? If so, you may need to take disciplinary action. Was this a fluke incident? If so, you can put safeguards into place to trigger if these conditions repeat themselves. Always try to prevent the crisis from recurring.

A Learning Opportunity

As long as your business is able to survive the crisis, you can think of the situation as a learning opportunity, rather than a failure. Even the most successful founders and CEOs must go through these growing pains; the most successful ones are those who can work past these temporary hiccups.