Crowdstrike CEO George Kurtz publicly acknowledged the crisis, ruled out a cyber attack and assured the company was working to fix the problem. After several hours, he apologised. He said all the right things but some crisis experts believe his tone lacked sufficient empathy and his apology came too late.
Amanda Coleman, crisis communications practitioner and author of Crisis Communication Strategies, commended CrowdStrike management for moving quickly to attempt to resolve the issue, but they “didn’t recognise the significant impact that it was having and there was a lack of genuine empathy in the initial communication”.
She says the crisis underlined the world’s fragile reliance on technology and that unexpected risks can snowball. It served as a reminder for businesses of all sizes to have a robust crisis response plan in place to manage unforeseen risks and situations.
Coleman’s advice applies to accountancy firms navigating turbulence to protect their reputation and financial stability. What does a crisis response look like in practice for a small accountancy?
“The best thing is to be ready for it,” Coleman says. “Have plans that will help you through the first few hours, including establishing a response team and developing the approach to communicating about what has happened.
Mark Borkowski, one of Britain’s most experienced crisis managers, says the crisis highlighted vulnerability for Microsoft.
Mark Borkowski, high profile crisis manager
“Think about it from Microsoft’s perspective: an innocuous software update from one of their many suppliers has triggered a titanic crisis that will take months to resolve,” he says. “To a certain extent, they can blame CrowdStrike, but they’ll be on the hook if something similar happens again and must be extra diligent in the future, which will be costly.”
“It is another lesson that crises are often unexpected and out of your control.”
Preparation is the key
Borowski agrees with Coleman on the power of preparation.
“Having a plan buys you time in an incredibly stressful environment – the first 24 hours of a crisis are the most critical, as this is when you are most at risk of losing control of the situation in the public eye, and it’s tough to reinstate calm,” he says.
A crisis plan determines who will be responsible for issuing statements in the event of a crisis, who will be responsible for developing key messaging and narratives, and what channels will be used to disseminate messaging.
The crisis template should:
- Acknowledge the situation and its impact on clients
- Explain what you know (and admit what you don’t)
- Outline the steps you’re taking to address the issue
- Provide clear guidance on what clients should do (if anything)
- Offer multiple channels for clients to reach you with questions
Borowski urges businesses not to “overexplain; only say what is strictly necessary, as extraneous information provides bad-faith actors with material to critique”.
“Just as you want to avoid saying nothing and creating space for bad faith actors to fill the void; you also want to avoid over-explaining or apologising for things for which you are not culpable,” he says. “ Too much information creates opportunities for unnecessary criticism.”
The winning trifecta for communication style is “brevity, clarity, and honesty”. “Be open with those impacted by the issue and present clear steps for resolution,” Borkowski says.
What are some examples of good and bad management of a crisis?
“Arguably, the best crisis management is for events we no longer recall,” he says. “Unfortunately, some ‘bad’ management would have to be Boeing, whilst Ryanair’s tongue-in-cheek response to delays and other issues has successfully retained customers whilst still suffering business issues.”
Understand who is impacted
Coleman stresses the importance of understanding who is affected. “It is essential to understand who is affected within your stakeholders and groups,” she says. “For most small businesses/accountants it will be their clients that are the primary concern so prioritising information to them is a key step.”
For most small accounting firms, clients need to be informed of any developments. She advises accountants to categorise clients in terms of the potential impact on their operations, the complexity of their accounts and the strength of the relationship to understand when, how and what to communicate and support them.
“Always be sensitive to those who are affected by what has happened whether it is your fault or not,” Coleman says. “It is helpful to have details of external specialists that can be brought in at short notice to get you through the initial stage of the crisis.”
Timeliness is critical
Timing is everything in a crisis. “When a crisis happens it is important to be ready to react quickly, to put proactive plans in place, to be open in the communication,” Coleman says. “Above all, be honest about the impact and the response – any attempt to hide or cover up will be more damaging to reputation than dealing with the crisis itself.”
Before a crisis escalates, understand the main risks your company faces and conduct a scenario analysis of how you would respond when the risks turn into reality. “Run through the response plans and test your approach,” Coleman says.
For accounting firms, risk scenarios may include:
- Cybersecurity breaches compromising client data
- Significant errors in client tax filings or financial statements
- Sudden loss of key staff members
- Natural disasters affecting office operations
- Regulatory changes impacting service delivery
As Coleman says: “It is better to find out what improvements need to be made before you are doing it in full glare of the public and media.”
