Handling a crisis is so easy, so why do CEOs fail?

Companies and institutions repeatedly make mistakes, and CEOs and individuals continue to singe and scar their reputations - often through stupidity or ego.

I'd bet a 100 barrels of Louisiana crude that if a crisis manager said this to BP CEO Tony Hayward five years before the Gulf oil spill, it would have set off a huge round of laughter:

“Now Mr. Hayward, if BP gets into a major spill or similar crisis in America, you're not going to fly back to England in the middle of it for a weekend sailing your yacht, right?”

We all know how that turned out. Why then, when there's a crisis of some sort daily, don't CEOs handle them effectively? Modern crisis managers – that is, post Hatfields vs. McCoys – offer similar guidance and strategy. Like the NFL, how many game plans really differ from coach to coach? One may have a niche, or work at a particular level, but we all have the same to-do lists and preach from similar catechisms.

Yet companies and institutions repeatedly make mistakes, and CEOs and individuals continue to singe and scar their reputations – often through stupidity or ego. Consider the list of malefactors on BP's heels: Lehman Brothers, Goldman Sachs, the Herman Cain campaign, Bank of America, John Edwards, Tiger Woods, the Catholic Church, Freddy Mae and Fannie Mac, Anthony Weiner, AIG, Greece, etc.

It's hard to imagine that individuals and institutions of this caliber wouldn't have prepared crisis management plans, but some may not; others may have them, but panicked and didn't follow them.

If that's the case, a CEO is not trained, is not made aware, and cannot function in the media howler she'll likely face in a major crisis. Some of this may be due to ego, or a sense of invincibility, or the mistaken notion that because your corporate board likes you [remember, you're only as brilliant as your last profitable quarter and higher-than-anticipated dividend] it will support you no matter what.

If you think no one will confiscate your yacht, sell your ski home, and put you on the street in a Bernie Madoff minute, think again. Maybe Harvard, Stanford, Wharton, or Tuck didn't teach you crisis management along with finance when you got your MBA, but that was then. If your MBA now stands for Me Before All, your board is measuring your corporate casket.

Plan to be on the side of success. Gauging adequately the number of productive crisis management examples is difficult because a majority of them are avoided and never go public – and media focus on the sexier blowups. “Good” crises are out before they're out.

But here are a few instances of people and companies dousing their crisis before flames appeared: General Motors and Chrysler handled their challenges expertly, and Ford never had to; Southwest Airlines took advantage of an industry-wide downturn and its competition's baggage-handling fees to improve its reputation and bottom line; America's nuclear industry put out facts that calmed domestic audiences despite Japan's problems after the earthquake and tsunami at Fukushima.

Don't wait. Plan today for your crisis. Unless you employ a wizard who predicts a week in advance when hurricanes, oil spills, tornados, philandering, lying, earthquakes, theft, or sexual abuse will ruin your month.

Steve Bell is partner and director of public affairs at Eric Mower + Associates. You can follow his blog here.

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