NEW YORK (TheStreet) -- There is nothing I absolutely hate more than people who panic in a crisis. It drives me insane. Not because people have fears that override their good judgment and common sense, but because panic is the most negative disease that can affect a company.
Panic that is unchecked can be like a tsunami wiping out everything in its path. I have seen good companies implode because the leadership panicked. In fact, this happened to a recent client of mine.
The company made products that it shipped all over the United States. Orders gradually started to decrease and clients went out of business, and the company was bleeding cash before too long.
The board, which had been snoozing on the thickly upholstered chairs in the conference room for the past decade, accidentally fell over and, with a startled look, said, "We need to fire some people!" Waves of layoffs began.
Watching this company was like viewing old Elmer Fudd cartoons, where he keeps shooting himself and wonders why the pain keeps getting worse. Leaving with the undesirables were the most talented people, who weren't about to wait around to be shot and thrown over the side of the boat.
The leadership cloistered themselves in the president's conference room, which resembled a bunker. Management looked scared, and the president physically looked and sounded unsure.
My client asked me to join him for lunch. He reminded me of Humphrey Bogart's disturbed Captain Queeg in
The Caine Mutiny
. He blamed the government, the economy, his managers and the employees. What I wasn't hearing was a solution to the problems the company was having.
How do you stop from panicking when everything seems to be going wrong? The following is the process I go through to turn chaos into calm and finally into a positive experience that will rejuvenate the employees.
: In every company I have ever run, the first rule I tell the employees is, "Unless someone dies, it's no big deal. Any problem can be fixed."
: Everyone has heard the expression, "Never let 'em see you sweat." Once you start sweating, people become concerned, rumors start to fly and resumes get sent out. The key is to take a deep breath. Maybe go out for some coffee or order in some pizzas, but don't show you are frazzled.
: Think through the problem and put your thoughts on paper about how you think the problem should be solved.
: Go to your advisory board, board of directors or mentor and tell them what the problem is and how you plan to solve it. Ask them for feedback. Getting an outside perspective will help and will also take some of the mental weight off your shoulders. You won't feel like you are tackling the problem on your own.
: Gather your employees together and admit there is a problem, and then discuss how you plan to solve it. When you give the presentation, make sure you give the appearance of a winner. Take responsibility for the problems and remind everyone that every business goes through ups and downs.
Make sure your clothes are pressed, and your hair is appropriately groomed, and do the presentation with a smile on your face. You have to come across as sincere.
: As you are reassuring the employees, open the meeting up for questions and suggestions. Tell the employees that you are open to their ideas, because they might have a different perspective on the problem. Let everyone know that negative talk is unproductive and won't be tolerated.
: Walk around and talk to your employees. Be the first one in and the last to leave so employees see that you're committed. It also will allow employees who are shy about speaking up in a group to let you know what they are thinking.
: Keep everyone apprised by email and once-a-month meetings about how the implemented changes are going.
: Look around the office and see who is still uncomfortable. Talk to them. If they are still flustered, offer to help them find another job, but eliminate them as soon as possible. All of your good work can be destroyed by people who espouse negative ideas.
: Celebrate victories. None of us do enough of that. Buy a group meal on a Friday and then send everyone home early if your customers won't have their businesses disrupted.
Just keep in mind when you're ready to scream, cry or throw your arms up in despair that nothing is accomplished by becoming unraveled. Stay focused and positive, and start thinking about a plan to get your project, product or company back on track.
As for my client, they eventually fought their way back to profitability. They learned a very valuable lesson about reacting to a situation -- if they had taken a deep breath and viewed their situation as an opportunity to improve the company, they could have turned a potential tsunami into a light shower.
Kramer is the author of five business books on topics related to venture capital, management and consulting. He is a faculty member at the Wharton School of Business at the University of Pennsylvania and the veteran of over 20 startups and four turnarounds.