On Crisis Communications and “What if We Didn’t Own the Company?”

August 31, 2006

The past 48 hours have been intense. Last night we got some rest and now we are beginning to reflect on our trials and tribulations.

If you’re a FreshBooks customer, you know that as an acknowledgement of our recent troubles, we decided to upgrade every FreshBooks account – even those unaffected by the issues.

Now, I’m a numbers guy. When I can, I like to make decisions based on numbers, carefully considering how things will affect the bottom line. When we decided to upgrade everyone’s account. I didn’t run the numbers. We just did it, because we felt it was the right thing to do.

Consider another scenario. One where we did not own the company and outsiders did. How would our decision to upgrade everyone’s account have played out in that context? We made the decision at approximately 2:00 AM. The process was simple: I asked Joe and Daniel if we should do it. They said yes. We did it.

In a larger company, or at a company owned by outsiders, I suspect this decision might have been much more challenging. At the very least, I suspect that more people would have had to have been consulted. That would have taken time. In times of trouble I believe that being able to communicate quickly and clearly is essential. The notice on our home page and the corresponding blog post were huge assets yesterday.

There is a long history of businesses responding to challenging times in much the same way we did yesterday. The classic example is Johnsons and Johnsons Tylenol recall. In that case the problem with the tampered Tylenol bottles was isolated. Yet despite that, Chairman James Burke swiftly decided to recall all the bottles across the nation. And there are other examples, countless in fact.

So in trying to learn from this episode – a process I am sure will go on for weeks to come – so far I can tell you this:

Communicate early.
Communicate often.
Communicate honestly.

I heard Yung Wu speak last year and he said, “In tough times, over communicate.” (tip #11). To be honest I think this whole episode may have been driven by that advice.

about the author

Co-Founder & CEO, FreshBooks Mike is the co-founder and CEO of FreshBooks, the world’s #1 cloud accounting software for self-employed professionals. Built in 2003 after he accidentally saved over an invoice, Mike spent 3.5 years growing FreshBooks from his parents’ basement. Since then, over 10 million people have used FreshBooks to save time billing, and collect billions of dollars. A lover of the outdoors, Mike has been bitten so many times it’s rumored he’s the first human to have developed immunity to mosquitoes.