One thing is certain in business: things will go wrong. So when you first start up a business, one of your priorities should be emergency planning.
Put a disaster plan in place that fits your situation: in case supply lines are cut, a hurricane hits or other natural catastrophe looms. Because if disaster strikes, a lot of people are going to be looking to you for answers.
On Feb. 23, 2007, at around 8:15 p.m., one of Virgin Trains’ new Pendolino tilting trains jumped over a set of points in Cumbria in the northwest of England, on a remote part of the West Coast Main Line. Margaret Masson, an elderly woman travelling to her home in Cardonald, was thrown around in the coach as the train slid along the railbed and then careered down a steep embankment.
For 10 years, Virgin Trains had been safely carrying millions of passengers all over Britain. Virgin Atlantic, meanwhile, had flown millions of customers around the globe without injury. That night, life changed for all of us at Virgin. Margaret Masson was dead. Several other people were seriously hurt.
When I arrived in Manchester that morning, the BBC was reporting that the train was intact, and that had helped to save many lives. That was heartening: all our new trains had been built like tanks for this very reason. A later report, which was confirmed, suggested that a track failure was responsible for the accident. Twenty-four people needed to be taken to hospital.
I met Margaret Masson’s family at the Royal Preston Hospital in Lancashire. They were clearly devastated, and I offered them my condolences. We found ourselves hugging each other.
Soon I was facing TV cameras and journalists who wanted answers. At the time, I couldn’t say much. I expressed my gratitude to the train operator, Iain Black, who stayed in his seat at the front of the train as it crashed, doing everything he could to save his passengers, and in the process sustained serious injuries. Our other employees on board had all behaved in an exemplary fashion, ignoring their own minor injuries in order to lead customers to safety.
Why were we able to react so quickly? When Virgin Trains was putting its emergency procedures in place, we had analyzed a number of serious rail incidents, and had been appalled by the length of time that usually passed before anyone in charge started speaking to the press. Confusion and then blame set in quickly as anxious people waited to find out what had happened and why.
So our disaster planning had prepared us to accomplish three main goals: get to the scene fast; be efficient in dealing with the passengers, staff and media; and be honest about what was happening. We knew that those first steps would get communications established so that everyone — passengers, staff, the media — would be able to obtain the information they needed.
Beyond disasters and accidents, as you forge a new path, finding growth areas and innovative solutions to your clients’ problems, it’s inevitable that you and your team will make mistakes. It is important to recognize this and ensure that everyone in the company is prepared.
This is one of the reasons you should be keeping the press up to date on what you’re doing. Aside from maintaining a high profile for your company, it may someday help journalists put any bad news in context.
Which brings me to the difficult balance that all entrepreneurs and CEOs need to learn how to maintain: always protect your reputation, yet don’t be afraid of making mistakes. These rules ought not to contradict each other, but they often do. I’ve known plenty of talented and trustworthy people whose careers have been damaged by the shadows of past errors, and who have suffered professionally as a result. If you or someone in your company has made a serious mistake, don’t be afraid to ask the senior figures in your circle for advice and help. Distinguished people are often generous and understanding, to a fault (they’ve been through the mill). They will advocate for you, and their reputations will help yours to recover.
Investigate the matter thoroughly; if you can, try to pinpoint where your internal processes failed. During this period, communicate openly with the press and keep them up to date.
Next, apologize. Explain what happened, express your regret, and describe what steps you have taken to correct the situation. While some may suggest that you resign, I do not think a CEO is always obliged to fall on his sword in these cases. Most times, managers should stay and sort the mess out. It’s what they’re paid for, after all.
Eventually people will realize that yours is a company that knows how to deal with its problems, and then you will have their trust.
Richard Branson is a philanthropist, entrepreneur and founder of the Virgin Group.