The SCARE Approach: Turning a Business Crisis into a Leadership Opportunity

For the first time, I had a serious business crisis on my hands. We shipped a few new enhancement (product updates) to production a couple of weeks ago.

For the enhancements I worked on I tested them extensively in our staging environments. It's not uncommon for me to build things that are requested by our clients legal teams or that touch compliance issues. This was one of those enhancements that combined both. I wanted to make sure that I could find all the bugs before it was released.

Everything was fine in the beginning.

A week and a half later... It all went to hell.

By the nature of working in a startup, you have to move fast and break things. Fires arise and they need to be put down quickly. Often it's all hands on deck during these times with the whole team supporting each other in any way we can.

This time I found myself right in the heart of it all.

My enhancement wasn't working as expected. As I was talking to people there was all sorts of problems that it had caused, none of which I had experienced during testing. We assumed it was just a bug that we could get fixed shortly.

But it turned out to be any expected behavior. One that would have been mitigated had I communicate a small change we made on the backend more clearly with everyone involved upfront...

Chipotle's food safety nightmare unfolds

Any business that survives long enough will eventual find themselves with a crisis they need to manage.

In July 2015, there was E. coli outbreaks across the nation caused by Chipotle. Food poisoning isn't an uncommon occurrence. This was just the start though. Over 6 months though Chipotle caused outbreaks from California to Massachusetts -- no food chain had ever had this happen.

Over those 6 months Chipotle spread:

• Norovirus
• Salmonella
• E. coli

Norovirus was caused by sick employees coming to work while the salmonella was caused by what was believed to be the food suppliers for their tomatoes. What about the E. coli?

On Fox News, they reported "the CEO said they have tested every single one of the 64 ingredients that Chipotle uses, and they still can't find the problem." Chipotle had a massive problem on their hands because there are basically unlimited combinations of burritos and bowls customers could get made.

Leadership had a real problem on their hands.

Leaders own their mistakes

How you respond to a crisis makes or breaks the situation.

Chipotle had a 82% decrease in their profits for the year and a 15% drop in their stock. Their crisis management strategy is often criticized today.

Monty Moran, co-CEO at the time, responded to the incident at an industry conference. He said, "It’s been fueled by the sort of unusual and even unorthodox way the CDC has chosen to announce cases related to the original outbreak in the Northwest, [and] because the media likes to write sensational headlines, you’ll probably see, you know, when somebody sneezes … ‘Ah, it’s E. coli from Chipotle’ for a little bit of time.”

Instead of taking ownership of the situation he diverted the blame to the CDC and media. Down playing the situation only heightened consumers fears of uncertainty in their food quality.

Taking ownership of mistakes and failure is hard.

I could have diverted the blame to multiple different places but instead I took extreme ownership over it.

This is required to be a someone with a high sense of agency.

I owned up to it and informed the team of the situation. I told them that it was not a bug and instead was something I failed to communicate properly. While everything was unfolding throughout the day it slipped my mind that this was the cause and let them know how I would work to remedy the situation going forward.

Instead of getting grilled for making such a huge mistake, I was met with messages commending my for how I handled the situation. Remember the past cannot be changed but taking responsibility of the situation requires guts that leaders must have to maintain people's faith in their ability to execute.

The SCARE framework for crisis management

When something goes wrong the last thing you want to do is panic. It will only make the problem worse. Approaching the situation in a calm way with a sense of logic and rationale will help you quickly solve it. As I was working to solve the problem I found myself break it apart into what I now call the SCARE framework.

1) Spotlight the problem

The first crucial step in crisis management is to isolate the issue - in other words, to put a spotlight on the problem.

This requires a deep understanding of the crisis: its cause, scope, potential effects, and the parties involved. You should also assess its severity, urgency, and the resources required for resolution.

This step is about fact-finding, understanding, and defining the problem accurately. Think of it as the diagnosis phase before treatment can commence. The better your understanding, the more effectively you can address the crisis.

2) Convey the issue

Communication is paramount in crisis management. Once you've isolated the problem, you need to convey the issue to everyone involved. This can include employees, clients, shareholders, or the general public, depending on the crisis and your situation.

The key is to communicate clearly, honestly, and promptly. Share the facts, show empathy, and assure stakeholders that you're doing everything you can to resolve the crisis. Remember, effective communication can help maintain trust and confidence amidst a crisis.

3) Avert recurrence

With the issue spotlighted and communicated, the next step is to avert recurrence. This is about learning from the crisis and setting up strategies and safeguards to prevent a similar situation in the future.

You might need to update procedures, provide training, establish new policies, or make changes to the organizational structure. For us, this was making some configuration changes to our clients account so no new candidates were affected. Implementing preventive measures not only mitigates future risks but also demonstrates to stakeholders that you are committed to improvement and resilience.

4) Realize the impact

It's crucial to realize the full impact of the crisis, both immediate and potential long-term effects.

This step involves acknowledging the fallout of the crisis and understanding the repercussions on all affected parties.

Identifying the impact is about being in tune with the emotional and practical concerns of those affected and showing that you grasp the gravity of the situation. This understanding will guide the development of your remediation strategies and will reassure stakeholders that their concerns are being acknowledged and addressed.

5) Empower the affected

After a crisis, affected parties may feel vulnerable and uncertain. Empowering them is about providing resources, support, and, where necessary, compensation. This step demonstrates that you're not just interested in resolving the crisis and moving on, but also in helping those affected regain their footing and be made whole again.