How To Handle a Company Crisis: A Thirty Day Sequence
A company crisis is rarely a surprise to the people inside it. What makes the difference is not the diagnosis, which everyone already has, but how quickly someone takes control of cash, tells the truth to the people who need it, and starts making decisions that hurt.
Week one: cash and control
- Build a rolling thirteen week cash forecast, updated weekly, one owner
- Introduce a single approval point for payments above a defined threshold
- Establish the true position on overdue supplier and tax obligations
- Confirm the covenant and facility position with the lender before they ask
Weeks two and three: the truth
Most crises are made worse by a management team reporting the version of reality it wishes were true. In the second and third week the only useful activity is establishing what is verifiable: real order book, real margin by product, real headcount cost, real obligations. This is uncomfortable and it is the entire foundation of everything that follows.
Week four: the decisions
By the end of the first month the two or three structural decisions should be taken and communicated: the cost action, the product or market exit, and the leadership change if one is needed. Taking them in one clear moment is far less damaging than a sequence of partial announcements over six months, which teaches the organisation that more bad news is always coming.
Who to tell, and when
When to bring in outside leadership
Two situations. When the lender has stopped believing the current management, in which case a credible outsider buys the negotiating room. And when the decisions that must be taken involve the people who would have to take them, which is a problem no internal team resolves well on its own.
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