by Roger A. Smith, CPP, Payroll Management Consultant
Crisis Management: Recovering from the “Big Mistake”
You just got a call from the CFO’s Administrative Assistant: The CFO’s check is wrong! What do you do now? Last month we discussed how one mistake can erase a history of outstanding performance. Or, in the words of Scott Adams, creator of the popular Dilbert comic strip, “One ‘oh sh*t’ can erase a thousand attaboys.” This month we’ll discuss what can be done to minimize the impact of that “Big Mistake.”
The steps taken immediately after the Big Mistake can make the difference between a career-ending event and a non-event, or even a career-enhancing event. Consider Big Mistakes that have been made by major corporations. Compare the impact of Big Mistakes made by Exxon in Alaska, Union Carbide in Bhopal, and the Ford/Firestone tire tread fiasco, with Johnson & Johnson’s Tylenol scare, Odwalla Foods’ E. coli tainted apple juice, and Mattel’s product recalls of toys made in China. While all these events were major disasters, the actions taken by Johnson & Johnson, Odwalla and Mattel minimized the impact on their organizations.
The key differences were an immediate response, communication to all stakeholders, acceptance of responsibility, and development of a plan to prevent any recurrence. While mistakes made in Payroll are seldom life-threatening, we can learn from these examples to minimize the impact of our mistakes on our organizations and on our careers. When you’re properly prepared, and follow an appropriate course of action, you can minimize the impact of the Big Mistake.
The following six-step method can be used in response to a Big Mistake in the Payroll world.
- Identify the scope of the problem. The CFO’s check is wrong. Are all the paychecks wrong? Are all executive paychecks wrong? Or is it just this one paycheck? You need to have an idea of the scope of the problem before developing your course of action. However, don’t over-analyze at this point. This step should be done in minutes, not hours or days.
- Set up a team to respond. If this is an isolated problem, with only one bad paycheck, the “team” may be one person. However, if all the paychecks are bad, you’ll need a larger team to manage the crisis. Give the team all the resources it will need – office space, communications capabilities, technical support, pizza – whatever it needs to properly resolve the crisis as soon as possible.
- Communicate to all stakeholders. At one of my employers we had a saying that “bad news doesn’t get better with age.” It’s never pleasant delivering bad news, but the longer you wait the worse it gets. One of the significant differences between Johnson & Johnson/Odwalla/Mattel and Exxon/Union Carbide/Ford/Firestone was an immediate communication to all stakeholders. You may not have all the facts at this time, but it’s important that people hear the message from you, and that you let them know that you’re on top of the problem. As with the successful corporations, you need to show your concern and sympathy for those impacted by the mistake.
- Resolve the problem. The team needs to call on whatever resources it needs to identify the exact problem and develop an appropriate solution. Break the problem down. Get input from those involved. What are the alternative solutions for getting the problem resolved quickly, and what are the impacts of these solutions? Develop a consensus solution, as rapidly as possible.
- Communicate the solution to all stakeholders. Once the solution has been determined, it needs to be communicated to all stakeholders. When you told them about the problem in step 3, you let them know that you’re working on a solution. You also built up an expectation that they would be informed of the solution. Now is the time to do just that.
- Take steps to prevent any recurrence. This is the time to find out the root cause of the mistake, and to keep it from happening again. It is not a “blame the guilty” exercise. The emphasis is on keeping it from ever happening again. Also, the steps taken to prevent recurrence should be communicated to appropriate stakeholders.
I sincerely hope you don’t have any Big Mistakes in your future. You shouldn’t expect any mistakes. You should expect the best, but also plan for the worst. If the worst happens, remember these six steps to minimize the impact on your organization, and your career.
As always, if you have any questions or comments, my email address is Roger.Smith@PayrollProf.com.
