"You guys flooded my &*#@ office."

That was how my neighbor introduced himself when we moved into our new office. He was correct, of course, as the evening before, we had mistakenly left a water valve on overnight, and not surprisingly, the inches of water in our warehouse had seeped into his office.

That morning, with the South Carolina summer heat already sweltering, we were in our warehouse and office with a dry-vac and mops seeping up the water when he barged in. I tried to diffuse the situation and walked next door with him to survey the damage, which is when I noticed his rifle racks, taxidermied animal heads, and hunting pictures strewn all over his office walls.

It was a disaster, and for the very first time in my entire life, I had a panic attack.

You see, my partner and I had just closed on the asset purchase of our business a week or two before. It was my first business but not my first experience. At that time, I had a decade of corporate experience and was a recently minted MBA with three years of international consulting practice. I had a business plan -- and an extensive one at that -- that laid out how we were going to grow this little business into a global business leader.

The problem was that even though I had best- and worst-case financial projections and a number of business scenarios built into our short- and long-term strategies, nowhere in the plan did I have a contingency for "Flooding an NRA-card-carrying neighbor's office."

I quickly called a service to clean and dry my neighbor's office. While we waited, I introduced myself, apologized profusely, and tried to joke around about it. My neighbor was angry because it had happened a few times before, but the previous owners had never done anything about it. He was not aware that we had just purchased the business, but nonetheless, he made a few veiled warnings about what might occur if it happened again and mentioned contacting his lawyer to determine how much it would cost to replace all of the ruined carpet, furniture, and so forth.

I humbly agreed to everything he said.

Heeding all of this, and hearing that he enjoyed hosting late-night poker games in his warehouse from time to time, I sprang to the market and bought him a case of Bud Light and a host of different fragranced air fresheners. I dropped everything at his office with his friendly manager and explained that, while we assessed the damage and replacement costs, I hoped a few beers and the vanilla-scented air fresheners would keep him from delaying his next poker game.

Then I waited -- and kept on waiting. And you know what happened? Nothing. No lawyers, no lawsuit, no further expenses. There were, however, quite a few poker games thereafter, and he even invited us to a few.

This entire experience taught me quite a few lessons early in my entrepreneurial career about dealing with conflicts and resolving a business crisis.

Taking Responsibility Means More Than Just Saying the Words

More than likely, the thing that saved us from absolute financial distress was not immediately calling the water damage company or the case of beer and air fresheners, but rather the fact that we took action. The previous business owner had never apologized or taken steps to correct similar issues, and indeed often denied being at fault, even when it was clear where the water had come from.

My neighbor simply respected and appreciated that I was willing to take swift action without fighting about responsibility.

Understanding the Entire Situation

Stephen Covey, in his book The 7 Habits of Highly Effective People, points out the importance of "Seek first to understand, then to be understood." Taking in information, understanding the situation, and, more important, being empathetic and responsive to the needs, motivations, and intentions of the other parties is critical.

In my case, I had a neighbor who apparently really didn't care about his office, but he did care about his poker games. I also spoke to him on a common level we shared -- namely beer and vanilla scent (probably much more the former).

I also believe that after years of arguing with the previous owner, he really just wanted respect and an apology, two things that are much cheaper than replacing office furniture.

It's the Thought That Counts -- Not the Scent

To this day, I still don't know whether my strategy was effective. His office manager, upon dropping off the beer and air fresheners, did mention that he enjoyed Bud Light, but that "the boys probably won't appreciate a vanilla scent while they are playing poker."

I remember feeling, and probably appearing, stressed that I had made such an insensitive choice of scents. She calmly touched my arm and said, "Honey, it's not the scent that counts, it's the thought that counts."

When she smiled at me, it was the first time I breathed that entire morning and the last time I had trouble diffusing a crisis.