Tao Te Ching and Wuwei Management

Chapter 43 4 "Governance Before Chaos": If the speed cannot be outrun, the crisis is a catastrophe

Once it's really messed up, it can't be cured.

Rule it out of chaos.

—— "Tao Te Ching" Chapter 64
As an entrepreneur, we must "prevent the crisis before it happens", fully understand the crisis, accurately predict the crisis, and calmly deal with the crisis.Every company will experience crises, big or small, just as everyone will get sick accidentally.However, if you don't react fast enough when a crisis comes, it is likely to be a disaster.As the saying goes: "If you are in panic, you will not choose the road, if you are hungry, you will not choose food, and if you are cold, you will not choose clothing." Entrepreneurs must be prepared to deal with crises and be able to act immediately instead of waiting for the crisis to come.

During the Spring and Autumn Period and the Warring States Period, King Wen of Wei asked the famous doctor Bian Que: "The three brothers in your family are all good at medical skills. Who is the better medical skill?" Bian Que replied: "The elder brother is the best, the second brother is the second, and I am the best Poor." King Wen asked again strangely: "Then, why are you the most famous?" Bian Que replied: "My elder brother cures diseases before the disease breaks out. Since most people don't know that he can eradicate the disease in advance, so he Only people in our family know. My second elder brother treats illnesses at the beginning of the disease. Therefore, most people think that he can only cure minor illnesses. Therefore, his fame only extends to this In the countryside. And I treat diseases when they are serious. Most people will think that my medical skills are superb when they see me piercing needles on the meridians to let blood, and doing some major operations on the skin. The whole country."

This story tells us that control after the event is not as good as control during the event, and control during the event is not as good as control before the event.However, a survey conducted by an international consulting organization shows that 80% of enterprise managers in China have not been trained in crisis management, let alone establish crisis management procedures within the enterprise.As a result, when a crisis occurs in an enterprise, many managers are often helpless and often miss the best time to deal with the crisis.In this regard, Sanzhu Group has taught us a profound lesson.

The famous three companies once created the first growth rate of Chinese health care products, and once had a bright future.However, no one expected that an unexpected crisis in 1998 would almost push this star enterprise into the abyss of bankruptcy. This was the "Changde Incident".

The direct "perpetrator" of the incident was only a 77-year-old "deceased" in Changde, Hunan, who was suffering from various serious diseases.His son claimed that his father died two months after taking the three strains of oral liquid caused by high protein reaction in June 1996, so he claimed 6 million yuan from the three strains.When the "Changde Murder Case" happened, Sanzhu's branch in Changde reported the matter to the headquarters, and the headquarters sent a deputy manager to visit the deceased's home.Sanzhu believed that the other party insisted on asking Sanzhu to bear the responsibility for death without evidence, which was unacceptable to them.They gave up "spending money to eliminate disasters" and rashly chose court settlement.

Even if the incident turned into a legal dispute, the leaders of the three companies still have insufficient understanding of the complexity of the case.They believed in their products, so they never thought of the possibility of losing the lawsuit.They stand completely on their own standpoint, without taking into account the attitude of the media and the public at all.It was not until the day of the sentencing, when the three plants found that the court was crowded with media reporters, that the leaders of the three plants realized the seriousness of the situation.Soon, a result that Sanzhu could not have dreamed of occurred: the Changde Court actually ruled that Sanzhu lost the lawsuit!A verdict completely drove the confident three people into the abyss.

Since then, the situation has taken a turn for the worse, and the media has exaggerated it, and it is almost out of control.What is even more incredible is that the district court took the initiative to send the verdict to the media.And when the three strains, full of grievances, intend to seek innocence through the "organization", the "appraisal results" of some authoritative departments are even worse!
This incident caused the sales of Sanzhu to fall from more than 70 billion yuan to more than 10 billion yuan, with a direct economic loss of 40 billion yuan and a loss of 7 million yuan in bank deposits.What is especially fatal is the collapse of the corporate social image and the disintegration of the entire marketing system.These two aspects directly led to the backlog of products caused by unsalable products and a large number of returns. Even the dealers "take advantage of the fire" at this time and refuse to pay back.As a result, the factory was completely shut down, and 15 employees were laid off, and 13 were laid off!The backbone left behind was also seriously lost due to low morale.The rumors about Sanzhu in the society made Wu Bingxin, the chairman of Sanzhu, who was physically and mentally exhausted, hard to argue.

Although one year after the judgment of the first trial, after the unremitting efforts of the three plants, the law finally gave the three plants their due innocence, but it was too late... Although the three plants survived tenaciously, today's three plants and It was simply different back then.

Different from other companies, the troubles of the three companies are not due to their own problems, but completely caused by the misjudgment of the crisis by the leaders.If at the beginning of the incident, Sanzhu could take the initiative to make economic compensation and eliminate the problem in the bud, then the subsequent crisis would not happen; even if the adjustment fails, if the judicial investigation can be intervened in time to obtain evidence, then the situation will not Too bad; even if the judicial investigation fails, if we can effectively communicate with the media and obtain the understanding of government departments and the public, then things will not be out of hand.In the end, although the three plants won the lawsuit, they lost their image and market.At any stage of the whole incident, if the leaders of the three strains can have sufficient judgment on the seriousness of the incident itself, then this incident will have another ending.

However, history cannot be repeated, and the educational significance of this incident is very important. The three plants seemed to be knocked down by some accidental factors, but in essence they were pushed into the abyss by inevitable factors.If entrepreneurs cannot fully estimate and predict the crisis, they will not be able to pay enough attention to the problem, let alone prevent the crisis.Once a crisis occurs, no matter what the reason is, the enterprise must first consider the social interests and the interests of customers first.Generally speaking, when many companies encounter a crisis, it is easiest to clarify their responsibilities first, and they are eager to explain the ins and outs of the matter to the public or refute it, but they end up giving the public a bad impression. The fall of the three companies is a clear example.In fact, the public cares more about the responsible attitude of enterprises than the facts themselves.

Heng Yuanxiang has also encountered the same crisis.Due to a false report by a newspaper reporter, a large number of national media reprinted "Heng Yuanxiang's underwear is poisonous".Within a week of the incident, Hengyuanxiang underwear was besieged on all sides, the market was unsalable, and customers were furious.Different from the three companies, Hengyuanxiang Group immediately launched the crisis public relations procedure, communicated with the China Consumers Association, announced the comparative experiment data of the China Consumers Association's underwear to the public, and issued a letter of notification to the local industrial and commercial departments to appease the dealers.Liu Ruiqi, chairman of Hengyuanxiang Co., Ltd., was based in Shanghai and personally directed the handling of the crisis. He finally recovered within a month. Not only did Hengyuanxiang’s corporate image not suffer the slightest damage, but because of the publicity of the experimental data, it gained greater trust from consumers.

When an enterprise faces a crisis, its reaction speed should be faster than that of putting out the fire, and it should take measures to kill the crisis in its infancy.Because this is more dangerous than a fire burning down a company's factory buildings. What the crisis is devouring is the reputation of the company and the brand.Speed ​​is the first rule in dealing with crises.If the Sanzhu Group had dealt with the crisis more quickly, swiftly, and effectively, it would definitely not have such a sad ending.

(End of this chapter)