Dealing with Ugly Skeletons in Your Business’s Closet




  • October 19, 2016

    skeletons in the closet sign with clouds and sky background


    As the recent news concerning a certain braggadocious political candidate’s past vulgar talk about women reminds us, The Internet never forgets. And despite the best efforts of Europe’s highest court to enforce a “right to be forgotten,” in the US there is not even a vague law giving us the ability to permanently erase our online histories.


    Even for those of us not running for political office, the thought of a sudden release of personal skeletons in the closet is scary enough. But, if you own a business with skeletons in its closet, the fear of their release rivals any monster Hollywood could conjure up. So, let’s discuss what you can do if your worst fear becomes reality?


    First: a little perspective


    Remember that every business experiences challenges, failures, and conflicts that get swept under the rug. Often entrepreneurs are overly sensitive about their company’s problems and what you see as a deal breaker, others may see as a minor imperfection. This means it’s a good idea to put your skeletons in perspective.


    Here, let me help. You might remember the public relations firestorm that erupted at Dell in 2005. A “citizen journalist” recounted a negative customer service experience he had with Dell on this blog using such choice statements as “DELL SUCKS. DELL LIES. Put that in your Google and smoke it, Dell!” His post attracted attention from computer buyers around the world. But what is especially important about this skeleton is how Dell reacted. They refused to let the negative review destroy their name. In the end, the blogger forgave Dell and posted a detailed explanation of the whole situation.


    Don’t get me wrong. I’m not saying that if you don’t have a Dell Hell-level scandal in your company’s background, you have nothing to worry about. I’m simply suggesting that before you go revealing your company’s deepest and darkest secrets to potential investors, it’s worth considering whether you are giving the appropriate amount of weight to worst case scenarios.


    What can you do should old skeletons come out of the closet to haunt your business?


    Now that you have some perspective, let’s talk about picking up the pieces when that worst case scenario hits.


    1. Try not to be defensive.


    Easier said than done, I know. But it’s important to keep your cool in this stressful situation. Suppose a colleague has a habit of dredging up sore spots from your past business decisions. Keep in mind that this person likely wants you to take the bait, is fishing for information, and probably feels better about his own business when reminding you of past mistakes. The worst thing you can do in this situation is react defensively. Think of witty responses you can use ahead of time and take the high road by walking away from any uncomfortable conversations if possible.


    2. Talk about the positive changes you’ve made as a result of the past ugliness.


    Among the worst problems for businesses are financial or legal skeletons. Often these result in personnel changes. How can you best handle skeletons belonging to your predecessor when you are the one hired to replace the bad apple? This is a difficult position to be in. But it’s always best to sit down with your team, board of directors, or investors and revisit what happened. Take the opportunity to talk about what you are doing differently and reassure everyone that you are focused on turning things around. The idea that actions speak louder than words is key here. So bring to the table detailed proposals of actionable items and back them up with proof of results.


    3. Talk about the procedures in place to prevent history from repeating itself.


    With the holiday season coming, many businesses are in the midst of the biggest sales and marketing campaigns of the year. Suppose your online retail shop decided to do a daily deal in order to boost sales last year, but then you and your staff were so overwhelmed with orders that you couldn’t deliver your product to all buyers on time. The residual fear from this mistake could prevent employees from taking on a project that could help your business today. So, you need a way to overcome the aversion. Start by naming specific and tangible reasons for the past failure. When everyone sees that the problems are discreet and understandable, they will feel more confident trying again with a different approach. Then discuss why you are confident that things will be different this time around. Be specific about the procedures in place and how they will work.


    Though it may not seem true in the moment, it is possible to overcome setbacks like the examples above and come out stronger on the other side. In fact, if you handle these past mistakes with grace, you’ll be equipped to shape your future success for years to come.


    That being said, there are some heavy skeletons that can really weigh down your team and your business making it hard to see a way forward. In these scenarios, sometimes the best idea is to cut your losses and go through a rebranding process. Rebranding can give your business a fresh start and a way to bring true closure to a past ugly incident. Don’t think of the need for rebranding as another setback. Think of it as taking back control of the situation.


    What strategies do you have for overcoming setbacks and putting away those business skeletons once and for all?


    Let me know in the comments.

    Business & Finance Articles on Business 2 Community

    Author: Erika Dickstein


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