Sooner or later, bad stuff happens. A critical member of your executive team might depart unexpectedly, leaving a significant void. Or, you might discover that a trusted employee stole $1.3 million (as was the unfortunate situation recently at Crotched Mountain Rehabilitation Center in New Hampshire). Unfortunately, the question is not "if" trouble will occur, but rather "when."

Knowing in advance what steps to take when things go wrong, and in what order, can ease the pain when bad things happen to good hospitals.

Here are some steps you can take to ease the impact of your next crisis:

First, cultivate as much composure and balance as possible, while getting all the information you can about the matter at hand. Inevitably, with any size crisis there will be much rumor, speculation and conjecture. Maintaining a sense of calm as you separate the facts from fiction is critical.

Second, find out what the real problem is. Often the aftereffects are worse than the pivotal event. For example, if a critical member of your management team dies suddenly in an accident, that is certainly going to have a devastating impact on the group. However, if she dies taking a huge piece of the knowledge base with her, you will be dealing with that loss for a very long time.

Third, identify the best person to handle the situation - it might not be you. As CEO, your message and actions will set the tone for others in the organization during a time of adversity. Other members of the senior management team, however, might be better suited to handle the requirements of the particular situation, and the day-to-day maneuverings. In the case of a financial-related event, it may be that the Chief Financial Officer is in a better position to deal with authorities, the press, etc.

Fourth, keep everyone informed. This is the time to be as straightforward and truthful as possible with those in your organization. Making sure accurate information is disseminated to all levels will keep the rumor mill from working overtime. You may wish to employ the services of a public relations firm should your situation prove to be particularly newsworthy.

Finally, remember that drama is a magnifier. Stress, emotion and anxiety can distort facts, serving only to make a bad situation worse. Approaching your problem with strength and a level head will encourage those on your team to do so as well.

Proper planning can significantly ease the challenges of a problem situation, whether it's a mild crisis or a full-blown catastrophe. Leadership can play a proactive role, rather than just react when disaster strikes, by candidly discussing worst-case scenarios, developing contingency plans, and reviewing both on at least an annual basis.

"A disaster can be a crippling blow to an organization because so much is lost in terms of customer contact, good will, and the ability to deliver services," says Michael Wallace, Vice President of Application Engineering at Result Data, a business intelligence-consulting firm in Columbus, Ohio. "Research shows that half of all organizations which lack disaster recovery plans go out of business within three years of a disaster."

Wallace, who has several healthcare clients, emphasizes that successful crisis management must be built on a foundation of executive support. "If the executive team is not fully behind the idea of a disaster recovery plan, it's not going to happen. And, in many organizations, it doesn't happen. The executive team either doesn't do it at all or they pay it lip service."

To develop a disaster recovery plan, or to assess if your current plan covers all the bases, here is what Wallace recommends:

1. Get commitment from management to develop a disaster recovery plan
   
   
2. Form a crisis management committee with representatives from all major departments.
   
   
3. Identify the possible risks, and rank accordingly using the following factors:
   
   a) Impact - how much will it cost to recover?
   
   b) Likelihood - what are the odds it will happen?
   
   c) Restoration time - how long to recover?
   
   
4. Ensure that your plan answers the following questions:
   
   a) Who will be in charge? A single voice to the outside world is critical.
   
   b) What will we say to patients, vendors, employees, and the community, and how will we communicate the message?
   
   c) What will we do to get back to at least a minimum service level?
   
   
5. Test the plan. Without testing ahead of time, you may find that your plan is worthless.
   
   
6. Update the plan at least once a year.

Summary: Putting out fires, literally and figuratively, is a high-risk proposition. It's invariably much easier to prevent and/or contain them in the first place.