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Stay Calm Through a Crisis: 5 Ways

When it rains, it pours. Here's how to keep your business from getting waterlogged. (Hint: It's not about deep breathing, it's about quick, precise action.)
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In the wine business, it doesn't get much worse than losing a majority of your crop.

"Last year there was a torrential storm in June--right when the vines were flowering and the fruit setting--the most delicate time in the growing season," recounts Judd Finkelstein, a Napa Valley vintner and owner of Judd's Hill Winery. "It rained. It poured. It hailed. Much of the crop up and down California was lost."

That weather could spell disaster for Judd's small, family-run vineyard.

But like a smart, level-headed business owner, Judd took it in stride. "When you are in farming, you learn quickly that you can't control the weather." Judd went on to find a silver lining where many would see none: "Having less fruit means the vines are putting all of their energy into growing this smaller amounts. So the upside is that the fruit that is produced will most likely have more flavor than a normal year."

Our business is a little different, but also has risks. Once, our freight carrier lost seven of our 30 boxes of new jewelry inventory that was en route to a major department store. Fortunately in our case, after five long days of waiting, our boxes were located and were in great condition. Turns out they had just ended up at the wrong airport after being separated from the main shipment.

Since then, we've been asking a lot of entrepreneurs how they handle stressful situations or business crises. For most small businesses there is no team to turn to to help you ride out the storm. There's no on-hand tech department when the computers go down or the website crashes. There's no legal team when you have a question. And there's often no one around to simply discuss how to handle or react to a problem when it arises.

After surveying several other entrepreneurs, we came up with a five-step plan that we think will help you through most start-up crises.

1. Don't delay. But do think before you act. 

When our boxes appeared to really be lost, we found the name of the CEO of the shipping company and reached out directly to him. He was attentive and kept in touch with us throughout the search process. Having his attention on the issue helped calm our nerves and most likely got more people inside the company involved. We made it clear to him that we were a small business and how a loss of this size could have a major impact on our bottom line.

In the case of Judd's Hill, it would be months before he knew the extent of the damage, but that didn't mean he would just wait around and worry. Judd focused his energy on planning events--he does numerous events each year to attract people to the Napa Valley. He also focuses on developing the other parts of his business--such as reaching out to clients about bottling their grapes and planning events that will attract tourists and locals to the area to learn more about the process.

For one of the co-founders of ClickStreet Marketing, Jenny Davidson, speed is key to responding to a crisis, but only after it's been fully analyzed, and actually qualifies as a "crisis."

"When faced with a crisis I try not to get immediately freaked out, and make a quick response. Many times, the crisis is either not as big as you first imagined or clears itself up on its own," she says. "If real damage has been done, it's best to figure out what my options are and how I can quickly move forward with a fix, remedy or apology."

2. Find perspective.

When something goes wrong, your emotions can easily take control. Your fears often get compounded in your head and the worst-case scenarios start to play out in your head. Try to avoid that. After you've acted on the problem, it's time to gain perspective. That, well, is easier said than done.

"Stress can be contained by realizing a situation isn't as bad as another crisis or emergency you faced previously, so you can calm down recognizing that since you survived that crisis, this too shall pass," says Tony DiCostanzo, founder and president of BookPal, a bulk-book business based in Irvine, California.

And if you don't have perspective, go find it! If you can't put your company's problem in a bigger context, just open the newspaper or flip on the nightly news. Most likely your problem isn't as bad as it seems.

3. Chill Out.

Once you've done all that you can, you need to simply chill out. If you're lucky, your hard work to solve the problem has set things in motion to resolve the issue. Now it's time to manage your stress level, which is undoubtedly high at this point.

"Once I get through the initial shock, I pour a glass of wine and play my ukulele," says Judd.

Davidson says: "I find that any type of break from the issue, helps calm me down. It can be as simple as walking away from my computer/phone for a short period and engaging in my non-work life (making dinner, doing homework with the kids, playing with the kids, etc.). Once I revisit the issue, it tends to seem more manageable."

4. Refocus your energy.

As a start-up founder, you're probably wearing multiple hats. So if a shipping crisis has distracted you for 48 hours, chances are, something else of import has slipped off your radar and needs your attention. And it could be a good time to focus on the things that are going well.

If the crisis happened in a part of your business that was hitting a wall, refocus your energy on the part that's growing.

5. Get ready now for the next crisis.

"Prepare in advance for various outcomes to an event and have the best people on the team so when the inevitable happens, you can respond with actions and not emotions," says Delwyn Gray, an event producer we've worked with in our previous jobs. She can manage any problem--big or small--and never show any emotion. It's impressive.

Scenario building like she does is a useful exercise to try to work into your business model. Once you've got a handle on the crisis at hand, start planning ways to avoid it from happening again. We recently heard one of the country's top bond traders, Mohamed El-Erian, CEO of global investment-management firm Pimco, talk about how the firm handled the economic crisis and the collapse of Lehman Brothers. He shared the various scenarios that his company had prepared for different outcomes.

It was such a smart exercise and critical when you're managing money at that level. But there's no reason businesses of all sizes can't apply the same thinking. We've certainly learned our lesson from the shipping crisis. Scenario building is now part of every big decision we make.

Last updated: Oct 25, 2012

LEE CLIFFORD AND JULIE SCHLOSSER | Columnist | Co-founders, Altruette

Lee Clifford and Julie Schlosser are the co-founders of Altruette. They make a line of classic charms that each benefits one of 35 different charities. Previously, they were both editors at Fortune magazine.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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