The WAY to WOW Shows
Handle a Crisis
April 1, 2025
Automatically generated from YouTube captions; names and wording may contain errors.

[0:00] [Music] Who are you? And where are you going? What do you [Music] want? Hello and welcome to Business Lessons from the Military. I'm your host, Kevin Bemel, and we're here every Tuesday at 10:00 a.m. Pacific time to talk about military history, doctrine, and the practices of great military leaders, all by way of distilling from

[0:35] them lessons that we can apply to our business and professional lives. This is a way for uh me as as a military veteran to give back something to you, my fellow citizens who uh so um doggedly support the support of the US military and continue to do so. billions of dollars are spent on training us and supporting us. And and this is just a little way, just a tiny piece of of um of of of giving back and and and helping you uh realize uh some kind of return on that

[1:11] investment, shall we say. And I I I'm uh pleased to uh mention that um this this show, Business Lessons from the Military, is sponsored by the Beverly Hills Council of the Navy League of the United States. And this is a an organization where civilians and military people can come together uh for the overall betterment of of the sea services and uh our country. I'll talk more about that um uh partway through the show. So, today uh I've been

[1:50] promoting this uh this show um as battle stations. Um in in the Navy, the United States Navy, um we have something called General Quarters. And I'm going to play a a clip from one of my favorite movies that shows you what general quarters is. But um just in in in short, it's it's what a ship does when um there's an emergency, when there's a crisis. And uh uh um so for example um when I was with

[2:25] the uh with submarine squadron 11 subron 11 down in PointLoma I was underway on a submarine um and all of a sudden the general quarters alarm went off. Um I was in my rack that's navy for for bed at the time and being that I was I was I was a chaplain in the Navy. So on a submarine, I didn't have a general quarter statement, so my job was to stay in my rack and keep out of the way. Uh, and what had happened was there was a fire uh in the nuclear reactor space, if

[3:02] you can imagine, right? And we're underwater, I I should add, we're not on the surface, right? And so the damage control team responded and within a few minutes they they they got the the fire under control and uh shortly thereafter the executive officer uh came over the 1MC that's the um uh sort of the public address system on a ship and let us all know that the the crisis was over. It had been handled and and and basically stand down from general quarters. So, in a ship's context, that's an emergency.

[3:38] In in our businesses and professions, uh hopefully our crises are not so dire. They're not, you know, um a risk to life, although sometimes they could be. Um I I I um I want to mention two that have happened um rather recently. Um, one is, uh, what happened to, uh, Boeing, uh, last year in 2024. Um, it lost a door plug. Well, one of its planes, um, flown by Alaska Airlines

[4:13] lost a door plug and it blew out this door. Um, and and the the plane had to make an emergency landing, right? Um, and of course, anytime something like that happens to an airline, uh, it's it's a major, uh, it it makes major news. Um, one of the reasons that I think it makes major news is these things actually don't happen very often. Flying is is so safe. It's safer than, you know, driving riding in a car. Um and and and for Boeing, this was one in

[4:49] a a string of incidents that had happened over several years. Um that was kind of the the latest one. And and all of a sudden, once again, Boeing had a crisis on its hands. Uh it also faced a a labor strike in uh se September of 2024. Uh 33,000 machinists uh went on a month-long strike. um they rejected a contract offer and Boeing subsequently uh uh announced plans to cut 17,000 jobs, about 10% of its global workforce. It reported a $6

[5:26] billion loss in the quarter. um and and it required that it um uh raise additional funds um in in in this case was $19 billion from investors in order to stay uh as as a viable company. So, you know, the first one is more of a um uh a safety crisis, if you will. The second one was a financial crisis. Okay? And then Delta Airlines in July of 2024, it experienced a major operational

[6:02] disruption due to a computer system failure. It was linked to the Crowd Strike incident, if you recall, and this led to the cancellation of over 7,000 flights over five days, and it affected uh over a million passengers. Um and of course the US Department of Transportation initiated a an investigation into Delta for among other things potential violation of consumer rights and and and the airline uh now faces a class action lawsuit um from passengers who were stranded. So again um in in in Delta Airlines case, this is

[6:37] a financial crisis um as well as a um um a public relations crisis, right? Um Delta builds their image as a reliable um airline that's going to get you where you want to go. And here it is, you know. Um and and and uh in in in all these cases, um these were not exactly self-inflicted uh wounds, so to speak. Um I mean I suppose you could make the case they didn't have enough u you know safety uh or backup systems in place but you know

[7:12] many times um these the you know a crisis a crisis is arising um in a business due to some um unanticipated and probably very difficult if not impossible to in to anticipate situation that then impacts our business. And so, you know, what are we going to do, right? Um so, um the what you're going to do or hopefully what you will do after watching this show is you will develop a a battle stations or what we again what we call in the Navy a general

[7:49] quarters plan. So, I'm going to I'm going to share it's a short clip about uh uh two minutes long. Um, and it's from um one of my uh favorite favorite movies. Um, it's a movie called um In Harm's Way. Um, it it stars virtually every popular male actor of the day. John Wayne, um, uh, um, um, Douglas, uh, Kirk Douglas, um, Burgess Meredith, um, Henry Fonda, um, and and

[8:25] and and a number of lesserk known um, uh, male male a male actors, that's redundant actors, um, and and a number of well-known female actress, a number of well-known actresses, including one of my favorite, um, Paul Apprentice. So, um, this clip of, so, so the movie In harm's way, um, begins essentially on December 7th, 1941, known now as Pearl Harbor Day, the the Imperial Japanese attack on Pearl Harbor. And so, yeah, the clip is about

[9:00] a minute and a half long, and you and this is this is a a crisis leading to the call for general quarters. Let's just watch this so you can see how this works in the Navy. is on a submarine contact inside the defensive sea area. Some poor Joe's really got it in the ringer now. Attacking one of our own subs. Better commence evasive zigzag pattern. Commander, set extra lookouts. I sir. Morning, Captain. Good morning,

[9:35] Commander Eddington. And how are you this fine day? Ah, splendid. Thank you, sir. What's the alert? Oh, the picket destroyer war has dropped some death charges on what they think is a sub about 15 miles from here near the sea boy. And another poor whale lost his brother. Sir, yes. Are we just looking for subs or planes, too? Anything, son? Well, there's a large formation of planes orbiting north of the island, sir. Well, looks like they got the pilots up early for squadron exercises. Strange place to rende. Why aren't they over Diamond Head where they belong? Sir, there's a formation off Diamond

[10:11] Head, too. I don't like it, Paul. It's on General's quarters. It's making no drill. Yes, sir. This is not a drill. This is not a drill. General. So there you see

[10:49] uh about the uh the video continued on. So, you know, what you saw there is um uh John Wayne is the captain of of an old cruiser. Uh it was a um medium to largesiz naval vessel at at that time. Um a a submarine had uh launched I mean a destroy a United States Navy destroyer had dropped depth charges on what it thought was a Japanese submarine. um which uh there were uh many many

[11:26] Japanese submarines that did um get into Pearl Harbor on on December 7th, 1941. A and um and so uh um John Wayne calls for uh additional lookouts, puts the ship on kind of on alert, if you will, and then ne the next thing they noticed is there's planes, a group of planes in a location where they're not expected to be. and and he, you know, John Wayne rightly uh realizes that that something bad is going on and he calls General Quarters and you saw the trumpeter uh

[12:03] blows the blows the call and then the uh the sailor behind him who was I I suspect was a Bzan um calls General Quarter. This is not a drill. This is not a drill. General quarters, right? And all of the sailors come pouring out of the ship. You saw they were holding on to their life vests. um and and their helmets and they take their various general quarter stations, whether it's as gunners, whether it's um in in a damage control station if the ship is damaged and something needs to be fixed. A as the movie continues. Um, in fact, the the John Wayne ship gets uh hit by a

[12:41] torpedo um and and they send a damage control uh crew down to stop the water coming into the ship um under the direction of of uh Kirk Douglas. He's the executive officer for for the ship and and eventually um the destroyer, which is where the action starts. um uh they rigged to tow the the the cruiser back back into uh Pearl Harbor. So, so the idea here is while the scene we saw in this movie clip was was not a

[13:17] drill during you know normal ship's operation periodically they would have general quarters drills so that every single sailor and officer on that ship knew what to do if general quarters was called and the ship faced some kind of crisis. Now, it's interesting to note if we keep in mind historically and and of course this is a movie so it it you know what happens in the movie didn't literally actually happen but it's very true to life for the Navy. So um

[13:53] although we were not the the US Navy and the United States were not at war um you know in 1941 until December se until December 8th 1941 um all ships practice going to general quarters they drill on this so that it's it so that any given sailors or officers actions are essentially automatic. So when they hear that call of general quarters, general quarters, they know exactly where to go, exactly what they may be called upon to do. So I'll I'll from my uh from my time in the Navy, um

[14:29] when I when I was with carrier airwing 14, so when we were embarked on on on our ship, the USS Ronald Reagan, a nuclear aircraft carrier, like every other member of the ship's company, I had a general quarter station. And so when General Quarters was called, I had to go to uh it was it was actually in the in the uh uh the the tower for the for the carrier um into an area where wounded would be brought um you know in in and and and taken care

[15:05] of. So I was there with uh people from medical division um and and other sailors who were there um perhaps for you know to bear stretchers those kind of things and I was if somebody was wounded I was there to give them you know render them comfort um I couldn't give them last rights because you I'm not a Catholic priest I'm a rabbi but at least give them some kind of comfort um in in in you know in their distress and and you know god forbid uh if if they were um you know going to die. So and we we had general

[15:41] quarters drills on a regular basis. I I don't recall exactly how often but I think at least a couple times a month um we we would practice this and you know we we had to make sure we had certain gear on. um our float coats, uh for example, because on on a when you're when you're on a an aircraft carrier, um if there's any chance that you're going to be on deck, you have to have a float coat on this. It's essentially a life vest, but it's a special life vest because among other things, when you hit the water, it causes a light to come on

[16:16] so that you can be seen in the dark, those kind of things. So, uh you know, this is something we we drilled and drilled and drilled. so that we would be able to execute um when the time came. Now underlying every general quarters drill or I I should say not every general quarters drill but underlying general quarters drills was an assessment of what kind of emergencies might we face. Okay. So, uh, nuclear aircraft carrier, right? Biggest

[16:52] ship in biggest naval ship in the world. Okay, not as big as some of the container ships and and oil tankers probably, but but still the largest combatant ship in the world. So, and and and also one of the fastest ships. Uh, we could sail faster than our escorts. Uh, we we usually had a cruiser in our task group and we might have some destroyers as well. So we we could sail faster than they could, right? So where is where is crisis going to come from? Well, uh, nonetheless, if especially if we were close enough to land, um, we,

[17:27] you know, in theory, we could be attacked by land-based aircraft, we could be attacked by other ships, we could be attacked by a submarine. Okay, th those would be the sort of, you know, co combat type uh, emergencies that we might face. Now um when I was in the Navy, we were involved with the global war on terrorism, but we weren't at war with any, you know, major naval plat major naval power. Um probably the biggest one com the biggest competitor to United States Navy is the is the um uh um communist Chinese um

[18:04] navy. It goes by the um it's like the army navy something or other. I forget the exact name but um so so you know the reality was our being attacked at sea was was was remote at most. Okay. Um but there could be um other uh other potential casualties. Um so for example um both of our if for you know some reason both of our nuclear reactors shut down now the ship is dead in the water. And if we had aircraft

[18:41] aloft, they would not have been able to land on the deck of a carrier. Um um I mean the the helicopters could have of course. Um but um neither the turborop nor the j aircraft can land on the deck of an aircraft carrier when it's not moving. Um they would overfly the deck. So um all of those aircraft would have had to have ditched um meaning they would have had to land in the water. Um the crewmen uh would have had the pilot and and if there were other crewmen would have had had to have gotten out. The helicopters would be

[19:16] launched to rescue them. The ship almost for sure would have gone to general quarters um to make sure that um number one everybody was on heightened alert. Number two, all what were called the battle um um I'm sorry, not the battle dress stations. uh um the the the um stations like the one I was at to handle uh wounded um were manned and so that so that people taken out of the water could be brought there um if necessary for triage before they were taken down to the medical spaces. Um, and if there

[19:51] were a lot of aircraft, a lot, it's not at all clear that there would have been enough space in the medical spaces to accommodate um, all of the, you know, crew members who who might potentially have been impacted to to land in the water. If the water is cold, they could have been suffering from hypothermia depending on how long they had been in the water. So these are the kinds of things that had to be uh thought about um and and that were at least in part anticipated in our general quarters drills. And so for our businesses um we need to be thinking about the same

[20:28] kinds of issues. So first of all, what kind of casualt casualties what kind well casualties is one category. What kind of crises might we face in our businesses? First of all, there are financial crises like the couple that I mentioned um with the airlines or well one was an airlines and one was an airline one was an airplane manufacturing company. Um so there are there are our business could face a financial crisis. we could lose a major client. Um I I I know when in when I had

[21:03] my real estate company, um foolishly, um I allowed my business um to get to a point where it was relying on one client for over 50% of its revenue. Um and then at one point, um that that client decided they didn't want to work with a small organization like mine anymore. And so they dropped me and all of a sudden, you know, bang, I lost, you know, essentially overnight 50% of my revenue. Um, now that was before I was in the Navy. I wish I had had the advice

[21:38] I'm giving you now back then. Um, so that I might have been better prepared to deal with with that crisis. Uh, so, you know, where where is your business financially vulnerable? um and and where where um do those vulnerabilities exist in a way that for example insurance won't help, right? So you can get things like business interruption insurance um and and it can pay some or at least some if not all of the costs of keeping your

[22:13] business operating. It probably won't replace uh lost revenue. Certainly not all the lost revenue, right? Um and and that may be by the way part of your general quarters plan is to have business interruption insurance if it's available for the type of business that that you have. Uh but um so but besides uh financial crisis, so if you live here in California, what what would happen if your um if there was an earthquake that significantly damaged your place of business or uh the equipment you need to

[22:51] run your business or maybe the vehicles that you need to operate your business? what would happen if the earthquake were so bad that you couldn't deliver your products? If that's if if if you're in some kind of product business. Um, and and by the way, I'm using California as an example, but uh in the Southeast, what would happen if there were a hurricane that caused the same kind of problem? Or if you're in the Midwest, what if there were a tornado caused the same kind of problems? What what would be your response? what how you know how would you deal with that crisis? So

[23:27] these are just a couple of theam examples of of the categories of crisis that uh businesses face, be they financial, be they physical, um be they reputational, right? Um if you recall, this is going back a while. this um but um um I think this is back in the I want to say the 1980s. So uh some lunatic basically um poisoned um some some containers of Tylenol and left them on

[24:02] the shelf in a drugstore. Um some customers bought them and they took the Tylenol and I I believe it killed several people. Um and all of a sudden Tylenol which was a uh a highly respected brand um I mean we refer to acetaphinamin as Tylenol because Tylenol was the original uh develop well Tylenol was the original brand under which acetaphinamin was uh was was sold. So all of a sudden Tylenol went from being a highly sought-after painkiller to

[24:39] nobody wanted to touch it, right? Um again, a tremendous crisis. This is reputational or uh you know public relations crisis however you want to you know whatever terms you want to use but but um you know what what would be if you have such a vulnerable vulnerability in your business what would you do in order to handle that crisis effectively and and my suggestion is you have a general quarters plan you send your people and maybe not literally But you have people take their battle stations

[25:16] uh to deal with the crisis. So before I map out a what what you need for a general quarters plan um I do want to um recognize our sponsor which is the uh Beverly Hills Council of the Navy League of the United States. So the the Navy League um has been around for over a hundred years and it is um it is an organization that supports what are known as the sea services which are the United States uh Marine Corps, the

[25:52] United States Navy, the United States Coast Guard and the United States Merchant Marine. All four of them together constitute what are known as the sea services because all of them go to sea. makes sense. And the uh the Navy League of the United States has a three-part mission and they spell out the acronym C, support, uh educate, and advocate. So, um uh in the um in the Beverly Hills Council, um we support a C service cadet unit. Uh we're looking to reach out to some junior

[26:29] naval return naval reserve officer training corps programs at high schools. Uh we we have historically supported the naval reserve officer training program at the University of California at Los Angeles. Uh so those are some of the support activities uh that uh the Beverly Hills Council of the United States Navy League um uh engages in. um education. We we educate people about what the sea services do so that they can better understand uh the the Marine

[27:05] Corps, Navy, Coast Guard, and and merchant marine and and its its part in our national defense plan. And then finally, advocate. So, we advocate on a nonpartisan basis for the sea services. So, um, most recently, um, a call went out from from the Navy League of the United States to the individual councils that there was a bill that had been sponsored in Congress to make sure that if the government shut down that uh, all service members um, would be considered

[27:40] essential personnel and they would continue to receive um, their their pay um, despite the government shutdown. Now, this is something near and dear to me because when I was with Subron 11, um it there was a government shutdown and although the Subron wanted me to stay on um because of how the shutdown happened, um they sent me home instead. Uh I was a reservist at the time on active duty and they they canled my active duty. So uh these are the kinds of activities in which uh the Navy League engages and if

[28:18] you are interested in in helping I I'm the president of the Beverly Hills uh Council. If you are helping uh interested in helping us meet our mission, I encourage you to go to navyleague.org and join our organization. Make sure you designate that your council is the Beverly Hills Council. So, you'll be included in our roster and you'll get information about all the various activities. All right. So, going back to our show then, this is Business Lessons from the Military with uh I'm your host Kevin Bemel and we're talking about uh

[28:53] what how to deal with a crisis in your business or professional practice. And I I mention uh some types of crises uh financial, physical, uh reputational or public relations crisis. And the the the the solution based on what I learned in the military is to have a general quarters plan, which is uh a a a a plan about what each person in your organization needs to do at the time of crisis. So um I've got seven points that I want to go over um to help you develop

[29:30] such a plan. So first of all you each person in your organization needs to have a clear role and responsibility uh during the you know once general quarters is called. So once once a crisis um has develop once a crisis has occurred so you have a a crisis response team. Okay. and that each member of that team should have a clearly defined role whether it's communications, whether it's operations, whether it's finance, whether it's legal, whether it's information technology. Okay, each

[30:06] person on the crisis management team should know immediately what what their role is. So the the moment they are notified, you know, uh launch crisis response team, call the general quarters, right? like we would in the Navy. Each person immediately knows, okay, when there's a crisis, this is what I need to do. Now, by the way, it may not require every person who works for your organization to be a part of that crisis response team. So for for some of the people in your organization when general quarters is called what they know is you know their their job

[30:42] may be just stay out of the crisis response team's uh way let them deal with it but beyond that you know keep out of it right don't be talking to the press don't be talking you know don't be calling up customers if you know if a customer calls upset um maybe their sole job uh you know of of someone who's not on the crisis support team or crisis response team is to pass them along to a member of of that team. So um you know not everyone may be actively involved in

[31:18] dealing with the crisis. Some people some people may even their job may be just go home right if there's physical damage so that the the the organization can't operate perhaps the best thing for some of the people is just to to go home be out of the way be out of potential danger and just wait to you know for updates and and and and wait to be recalled back to the business. Okay. So number one clear ro roles and responsibilities. Number two, rapid mobilization and coordination. So, every

[31:54] member of your crisis response team should be thoroughly briefed on the crisis response plan, and they should know who to contact, what steps to take as as soon as as a crisis arises, and what designated communication channels to use. So, should they use email? Should they use some kind of messaging apps? Should they use telephone right now? If maybe your IT system is down. Okay. So, you're not going to be able to use

[32:29] email or uh messaging apps on your computer. So, maybe they have to fall back on cell phones. Now, for for a small business, um maybe they don't issue uh company cell phones to every employee. So then maybe there's an expectation that the employees will use their personal cell phones. You know, make sure there's no um uh you know uh employment laws that you know you're violating or something like that. I mean I I can imagine especially like in a state like California requiring employees to use their personal cell

[33:04] phones for business could be potentially be problematic. So look into uh how are we going to be able to communicate? Now the reverse might be that let's say there's an earthquake and cell towers have been destroyed and so cell service is interrupted. Okay. Uh so we we may not be able to communicate by voice because it takes too much bandwidth but we may be able you may be able to communicate through text messages which don't take as much bandwidth. Now, do you want to use text messages which maybe can be

[33:40] intercepted or do you want to use some kind of encrypted communication system to make sure that uh you you know your messages aren't getting out to the press or to the public in a way that you don't want them to be, right? The recent uh incident with um with um members of the Trump administration using Signal, right? And and ending up having somebody in their group that shouldn't have been, right? So, what are you going to do to make sure that people with whom you're communicating are members of the crisis response team and and and other people who shouldn't be in on there have not

[34:16] inadvertently been included or haven't um somehow gotten into your private group. Okay. So, so again, um members of the crisis response team, they should know uh who to contact, what steps to take initially until they get further direction and through what communication through what channels uh communication um you know should should occur depending on the various uh depending on what the situation is and and and what what channels may be available. Okay.

[34:51] Number three, chain of command and decisionmaking. So on a ship, there's a very strict chain of command. So my commanding officer was a Navy captain. He was he was known as KAG, which is short for commander air groupoup. That's actually an old term that comes from World War II. Um he's not officially a KAG anymore. There's a he's the commanding officer of the airwing. Uh but but in any event, even the CAG reports in in to the captain of the ship. So the captain of the ship unless

[35:27] unless the strike group commander is on board, the captain of the ship is the most senior member of the ship's company. And so whatever whatever decisions need to be made, they flow from the captain down. Now the captain will oftentimes delegate decision-making authority. Um, so for example, when it comes to dealing with the nuclear reactor on the ship, he's probably going to delegate a lot of authority to the uh nuclear uh propulsion officer who's a commander of um an '05 uh because he's

[36:04] an expert in that with the expectation that that officer is going to be communicating with the captain and keeping him informed of what's going on, what may need to be done, the decisions he's making, etc. ETA okay so the same thing is true in a crisis for a business there should be one person who's designated captain if you will of the crisis response team and that person has the ultimate responsibility for h for how the crisis is going to be handled. Having said that, part of your general

[36:39] part of your uh crisis response plan should be should be uh what authority is going to be delegated to whom so that each member of the crisis response team knows what their responsibilities are, what the the extent of their authority is and they can start exercising it as quickly as possible to deal with the crisis at hand. Okay. So there should be a leadership structure that's in place that all the members of the crisis team know about.

[37:16] Okay? And this will enable them to quickly make authoritative decisions in order to deal with the crisis. Even the member even the people in your organization who are not members of the crisis uh response team should understand what the leadership structure is so that if they see something that they think is not right or if they hear about something they know to whom this information should be reported so that

[37:51] it can be dealt with by the crisis response team. Okay. So, as I mentioned a minute ago, although not everybody in your organization may be a formal member of the crisis response team, you want to have everybody in your organization, they should know how to deal with any aspect of the crisis that may come across their their desk or come within their knowledge to make sure that, you know, information is gathered properly, distributed and and and therefore the crisis can be dealt with as effectively as possible. Now, in

[38:29] general, in a crisis, you probably want to have fairly centralized decision-making authority um to make sure that everything is being wellcoordinated and and and the crisis is being dealt with in the proper focused way. However, as I mentioned with the the nuclear reactor or reactors actually on on a nuclear aircraft carrier, you're you're there's going to be specialized needs in the crisis response depending on what the crisis is. And so some of the decision making may need

[39:04] to be delegated to specialists. So uh if there if there was a collapse in um in in um computer systems. Okay. So whoever is the senior IT person on the crisis response team probably needs to have a fairly high level of authority delegated to him in order to quickly and effectively deal with that crisis. Okay. Uh and and now you might think, well, what about public relations? Do the PR people get u authority delegated to

[39:41] them? Well, perhaps they do, but um probably not as much as someone with a technical specialty like it. Um because uh in the end the the senior member of the crisis response team is ultimately responsible for the reputation of the company. He's probably not going to want to delegate that ultimate authority. So he may only delegate some authority to the person in charge of public relations so that they can you know issue uh in um

[40:21] messages of um um shoot I'm I'm going up on the word but they they can sort of calm uh concerns about the company messages of reassurance is the word I was looking for. Okay. But uh they may not have uh uh control over the ultimate message. Um that would be something they would probably develop with the most senior members of the crisis response team. Okay. So number three, chain of command and decision-making. Number four, containment and damage control. So

[40:57] as I mentioned in the film clip um at the beginning of of of the show, so uh John Wayne's uh cruiser gets hit by a torpedo. Water is flowing in, right? And um so in the Navy, we we have a saying, ship shipmates self. In other words, if the ship is in danger, everything else takes second place because if the ship is going to sink, you know, and nothing else really matters. Everybody's going to be in the water and in trouble, right? So, when there's water flowing

[41:32] in, that is the number one crisis to be dealt with, right? And so when a crisis happens um at at you know god forbid at your company or your professional practice so someone and it's probably going to be the the the this senior member of the crisis response team is going to have to make a decision about uh kind of on a triage basis what is going to get uh priority in terms of damage control. Okay. and and so through

[42:07] through his through the other members of the crisis uh response team through the subordinate members they they need to and and this should all be part of their uh part of their uh trained job. They need to know as quickly as possible. They need to funnel to the senior decision maker an assessment of the damage and what containment steps may may need to be taken for their area of specialty. Okay. So whether it's finances, whether it's physical loss,

[42:43] PR, um IT, whatever that is, they need to assess that so so the leader of the crisis response team can make a decision. Okay, where do we need con to contain uh dam where do we need to contain the situation? Where do we need to send or focus on damage control? Okay, and that way uh decisions can be made that will hopefully globally limit the amount of damage that happens to the company. Okay. So, so for for example, let's

[43:18] let's take the the case of of of Delta where they got um they got hit by the um what was it? The crowd crowd uh yeah, crowd strike incident. Okay. So, they had to cancel all these flights, right? One would assume that knowing it was essentially an IT crisis that turned into a public relation crisis, a public relations crisis, that damage control, damage control was first of all focused on fixing the the the I the computer

[43:53] systems um that had been damaged by the Crowd Strike incident to get those computers back online and working properly. That would have been number one. And number two was dealing with the public relations fallout of cancing all those thousands of flights and having you know over a million uh passengers uh had their having their plans disrupted. So um step number you know number two in terms of containment and damage control would be you know how are we going to deal with all of these uh passengers who are not going to be able to fly right

[44:30] and and one would imagine they would have set up uh phone lines and and other means of communication monitoring social media so that anytime someone um you know a passenger was identified whose flight had been cancelled they reach reached out to them to say, "We're here. Contact us at this number. We will do our best to get you rebooked as quickly as possible." And and all of that should have been, one would hope, um although I don't think it was the case, all of that should have been part of Delta's crisis plan. Okay. Um and in the end um one of

[45:07] the keys to containment is to communicate as quickly and as effectively as possible to uh those people who are impacted uh by the crisis whether it's customers, clients, employees, suppliers, um maybe even um people at government agencies, right? Um, it's always better to be proactive than it is to sit back and let all of this fall on your head, right? And and if you're being proactive, then to a to a certain

[45:42] extent, you control the messaging, you know, the so-called narrative, right? And and that's that that can help uh contain damage as well. Okay. So, number four, containment and damage control. Number five, drills and preparedness. So you can have the most amazing crisis response plan on the planet, but if your people do not drill in it, they do not practice it, it's not going to do you any good because they're not going to be able to quickly and effectively

[46:18] implement it when it's cold. So just like on a ship where we had general quarters drills and we had them on a regular basis and we practice doing the various things that we would be called upon to do in a real emergency. So too in a business there should be per a periodic simulation of crisis scenario of crisis scenarios so that the members of the crisis response team can practice responding to that crisis.

[46:53] Okay. Now you say, "Oh my gosh, that's so disruptive to to regular operations." Well, um, you know, yes, it it it it might be, but the, you know, two or three hours you might take once a month or twice a month to practice crisis response, okay, could potentially save you hundreds of thousands, thousands of dollars, hundreds of thousands, millions, tens of millions of dollars or more in financial loss. Uh it could it could save you a tremendous amount in

[47:29] loss of goodwill and it also will show your your people that you are very serious about helping them be able to respond well to a crisis and and that alone as a as a uh a measure of morale um is very very important. Now, by the way, you don't necessarily have to do them the way we did them on a ship, which is we would call general quarters and the entire ship would respond, right? You could do, you know, department by department uh drilling and

[48:05] preparedness. Um or maybe just, you know, have two or three departments uh practicing on on a particular day so that the entire business isn't interrupted. Uh just certain certain departments. Or maybe you want to pay people some overtime, have them come in after hours in an evening or on a weekend to practice. That's an opportunity as well. And the investment is is likely to pay off. Now, of course, you're in the best position to assess just how uh likely a a crisis is to hit your company uh and and so how much you

[48:42] want to invest in having a general quarters plan. But there's no point in having one that is not drilled and and and that's and that staff don't have a time to prepare to use. Okay. So number five, drills and preparedness. Number six, communications and morale. So we might call this actually leadership during a crisis. the the senior leadership whether it's uh you know the the CEO or whether it's department heads they need to be able to issue calm clear

[49:20] instructions okay they need to not panic okay so and and this is why drilling and preparedness is so important because if if if people are well prepared they're more they're better able able to remain calm and project uh a sense of the you know we've got the situation under control everybody knows what they need to do there's no reason to panic. Okay. So uh you know in a company especially with

[49:57] the employees in addition to projecting that calm under control um you know face we also want you also want to make sure that uh especially members of the crisis response team they know what's going on um you know throughout the the the the crisis in all areas of the crisis. Um, you want to communicate to employees, to customers, clients, again, to government agencies if they're relevant. You want to have a plan to calmly communicate to

[50:33] them and let them know, keep them keep them apprised of progress being made and dealing with the crisis so that they don't get spun up and and panic um because of what's going on. Okay. So again, leadership and paying attention to morale very very important. So that's number six. Okay. And finally, um number seven, this is this doesn't happen during the handling of the crisis itself, but it is absolute an absolutely

[51:09] crucial step in the in in do dealing with crises and having a general quarters plan. And that is after each drill, each training, each preparedness event, and certainly after um dealing with an actual crisis. Okay? You want to take time post crisis or post drill to review what happened and do what's called a hot wash. Now I talk I talk about a hot wash in a I think it

[51:46] was last year um pardon me um and and it's basically an afteraction report. So everybody who was involved in responding to the crisis should sit down with the, you know, the leader of their department or their division, whatever it is, and talk about what happened, how did we respond, how did that response, how well did that response work, and what could be done better next time. And then those those postcrisis

[52:22] reviews need to be collated and the plan may need to be revised based on that input. And in that way the drilling and the actual crisis response can be used in order to respond better next time. Right? And so this again when we did general quarters drills this was always after after uh we were call after secure from dr secure from general quarters was called right. So that meant okay the the crisis is

[52:58] over or the drill is over and and we would take a few minutes to discuss okay how did it go? What could have been done better? And then the the team leader um in our particular um you know place that we went to when when general quarters was called they would be responsible for providing that feedback to you know higher echelons so that if changes needed to be made they could be okay so uh postcrisis recovery and review is is the crucial last step. So, so real quickly reviewing uh the the seven uh

[53:33] aspects of a general quarters plan, a crisis a crisis uh response plan. Number one, have clear roles and responsibilities. Number two, uh make facilitate ma rapid mobilization and coordination. Number three, have a chair a clear chain of command so that decision making can happen approply and appropriately. Number four, you want to deal with containment and damage control on a triaged basis. Number five, drill your plan and and increase your

[54:08] preparedness. Number six, be mindful of how leadership needs to act in order to sustain morale, good morale. And finally, number seven, have a postreovery and review session after every drill and every actual crisis in order to improve future responses. So, this is what the United States Navy has to uh to teach us about dealing with a crisis in our business. And uh all all this information I'll I'll put some of

[54:45] this I'll put the key points in the show notes so that they're there for you. I encourage you to watch this uh the show maybe a second or third time to review some of the points a as you develop your your own uh crisis response plan and and and be aware that I you know businesses do face crisis. You need to figure out what those may be so that you can develop a proper response and ensure that your business can best survive uh an emergency or or you know some kind of of

[55:21] crisis that otherwise could potentially put you out of business. So I thank you very much for joining me today, especially my live viewers. Always a treat to to know that you're you're watching. Tomorrow at 10:00 a.m. Pacific time is my show uh people making money and maybe strange for a a USC grad, a Trojan like me. Um my topic is going to be the wisdom of John Wooden, one of the greatest coaches of all time. He of

[55:56] course at UCLA, our big cross town rival to USC. I I had the honor to hear John Wooden speak live um many years ago. Never forgotten that that that speech. He's an amazing man and I want to share some of his wisdom as it applies uh to running our businesses, uh running our professional practices, handling our financial lives. So, I hope you'll tune in tomorrow, Wednesday at 10:00 a.m. Pacific time. And then next week on

[56:32] Monday at 10:00 a.m. Pacific time is my show Trusts and Estates Weekly. My guest is Timothy uh I'm sorry, Tiffany Ballinger Floyd, and she's going to be talking about asset protection planning, a crucial part of proper estate planning. So, I hope you'll tune in 10:00 a.m. Monday for my conversation with Tiffany. And then one week from today will be the next episode of Business Lessons from the Military. So again, thanks so much for watching and thanks also to um my my SP

[57:11] our sponsor uh the Beverly Hills Council of the Navy League of the United States. Again, go to please go to navyleague.org if you're interested in knowing more about it and potentially becoming a member and helping us with our work. So that only remains for me to wish you a wonderful rest of the day and signing off as I always do. Marie darling, you are my bell. Courage at all times, my friends.