Have you suddenly been hit by a lawsuit or had an argumentative client on the other end of the phone? Relax, take a deep breath, and plan your response carefully to minimize the damage.

One of the most critical days in your business life may occur unexpectedly without warning or any premonition. It may start with a phone call, a legal summons, or a message from one of your employees. That day is when a high profile job has turned into a disaster, an employee has made a big mistake, and you have a legal problem, or wind up on the front page of the newspaper.

The steps you take initially will often determine the cost to you in dollars as well as your reputation. Here are some real-life examples of significant problems and how they were handled:

An employee installer inadvertently created an unsafe job condition while performing work and a client’s employee slipped and fell. An attorney ignored several verbal warnings and walked through freshly applied adhesive for a direct glue-down carpet installation at a law firm. He got about three strides into the area and then slipped and fell on his back. His head, suit, and shoes were covered in glue. His embarrassment was enhanced by the laughter of the crew who had warned him to stop.  

As it turned out, the crew chief had failed to mark the area with yellow caution tape, even though access was blocked by equipment. When confronted with “What are you going to do about this?” by the attorney, the flooring company’s executive responded with, “What can we do to make amends?” rather than arguing about the attorney’s stupidity in walking through the area.

When the attorney asked for a new suit and pair of shoes to replace what was covered by glue, and said he’d be satisfied by that, the executive said, “I’ll have you a check by the end of the day. Okay?” While the attorney was at fault and ignored verbal warnings, visual warnings had not been posted, and the last thing one needs is an angry attorney. It was much better to settle than battle over responsibility.

In another example, a company received notice of a lawsuit being filed for several million dollars that alleged that products used on their job causes significant physical harm. The basis of the suit was that during installation, a bucket of solvent-based contact cement was left open while some repairs were being done. Toxic fumes had caused an employee to feel ill, who was then sent home by the client; the employee was off from work for an extended period and claimed permanent physical harm.  

Upon investigation, there were no other complaints from personnel in the area; the client’s HR manager did not find any credible basis for the extended absence; there were no doctor’s reports of actual physical problems. Apparently, the employee hoped for a financial settlement, and the attorney’s advice was to see if the filing resulted in a court date being set. If not, the attorney explained, just ignore it. They did and the filing time limit expired without any further contact. This was a case where inactivity was the best option after the initial investigation.

Here’s another situation: A project performed three years ago is now failing and the owner is threatening to take legal action unless the company replaces the job in its entirety. Products were being sold and installed with the same management company that represented the owner, and the owner was facing unexpected expense in repairs.

The story unfolded: Four floors of corridor space where carpet had been installed by direct glue-down were coming up after having been professionally cleaned. A sea of ripples was fast becoming a trip hazard. A senior project manager and the installation manager were sent to inspect the areas. An experienced flooring inspector was also contacted for a written opinion of cause in case the owner’s threat became fact.  

The consensus was that while aggressive hot water cleaning contributed to the problem, the wrong notch trowel size was used and the adhesive used was an inexpensive standard grade. The owner was given the choice of complete replacement at a reduced price; however, he opted to avoid that expense. The solution agreed to after several rounds of discussion was to replace several high-profile areas and reinstall the balance of the area. While some fault accrued to the dealer, the solution was seen to be less costly to their reputation than an extended battle with the owner.

Another potential nightmare that was solved with quick action: The company vice president was notified that there was a product failure on a job for which the company provided materials, but no installation. The potential damage could be well over $1 million due to the size of the job. This was complicated by the fact that the sale had been done under a large government contract.  

Within hours of the phone call, the company personnel looked at the job; while there did not appear to be product defects, there were visible problems throughout the area. Seams were peaking and the product did not seem to be well adhered to the raised access floor. Product samples were taken, submitted to a testing lab, and a third-party expert was brought in for an inspection.  

In addition, the product manufacturer inspected the area, performed field testing, and also completed an independent inspection. In the interim, the client was notified in writing of every step being taken and given a report of test results. While the client continued to insist there was a product defect, lab tests showed that product samples actually exceeded test requirements in all respects.  

Unfortunately for the client, the problem experienced was caused by their installation company. They had used the wrong adhesive to adhere the product to the substrate.

The dealer and the manufacturer declined to share in the replacement cost, and the client reluctantly agreed. The ability to stay out of court was principally due to quick action to find the cause, keeping the end-user informed of all progress, and keeping the government contracting officer in the loop.

Here are some suggestions: When you get that phone call, and before you spring into action, take a few minutes, let your blood pressure settle down, and think about the steps you need to take. Is this something that you need to handle yourself, or is it best left to someone else? They may have called for you, but that doesn’t mean you’re the right person. Similar to an unexpected call from a news reporter asking for an interview, you don’t want to do this “off the cuff.” You may find you are your own worst enemy.

Think about news stories you’ve seen where the chief executive was caught unaware by a television reporter. The ceo didn’t come across as being prepared, or caring, or even understanding the situation. From an ego standpoint, every ceo wants to be in charge; however, are you qualified to be the “face” of your company?

Have you had training to fulfill this role, or do you have another person with an appropriate title that is photogenic and is comfortable in front of the camera? How you act, and your delivery of information, can be more important than what is actually stated. In a case where there is great potential for financial harm or legal liability, perhaps your attorney is the right person as your spokesperson. A well-chosen “No comment” may be just the correct approach and give you time to decide exactly how to handle the disaster confronting you.

However, if it is big news and a front page story, you should be prepared with a genuine smile, a caring attitude, and a “No comment” or a short statement of regret for the problem. “We regret what has happened and are working on a solution; beyond that, I have no other comment at this time.”  

This is not the time to vent your frustration, justify mistakes, or try and answer a bunch of questions. You need to pick the time and venue for statements. If you are unsure exactly what is needed, form an internal working group for brainstorming. Some of the best ideas come from non-management personnel. Be sure you’ve identified the problem and ask for ideas on what should be done, how it should be accomplished, and how quickly it may be completed.

Of course, you need to make the solution a priority. The more quickly you can fix the problem (especially if emotions are running hot) and are seen to be taking quick, decisive action, the better off you and your company will be. When disaster happens, take a deep breath, plan your response, and think about how you would like to be treated. Make the solution a priority.

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