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Leadership Lessons We Can All Take From the Sudden, Messy Closure of Two Popular Chains Businesses fail for a variety of reasons, and it is up to executives to communicate effectively with employees and customers to avoid confusion, anger and ruined reputations.

By Christopher Salvi Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

In the wake of the sudden closure of Chicago's Foxtrot and Dom's Kitchen & Market (parent company Outfox Hospitality), the story of how it unfolded serves as a powerful lesson for executives on the importance of communication during a crisis. This scenario played out in real-time at Foxtrot, a company once buzzing with innovation and promise, having been recently infused with substantial investment and seemingly on a path to reshape the urban grocery landscape.

The executive team faced a critical juncture as the reality of closure set in. Their decision wasn't just about shutting down; it was about how to communicate this decision. The absence of direct communication from the top led to widespread confusion and distress among employees, many of whom learned of their job loss abruptly. This lack of communication may be the reason lawsuits are coming in. Is the parent company's brand tarnished? Have the reputations of the executives taken a hit?

Transparency and honesty in good times and bad

Let's envision a different approach, characterized by transparency and regular updates. Instead of a sudden blackout, if Foxtrot's leadership had engaged with employees and customers early and openly, sharing the challenges and exploring all possible options, the narrative could have fostered a sense of unity and mutual respect, even in the face of closure.

Related: Don't Let Crisis Control You: 5 Expert Tips on Effective Communication

Moreover, in this alternative story, the executives lead with visibility. They organize town hall meetings, issue regular communications, and are present on the ground, demonstrating their commitment to their teams. They explain the economic or operational pressures that led to this hard decision, and they outline the support systems put in place for those impacted. This approach not only softens the blow but also upholds the dignity of all parties involved, reinforcing the leaders' reputation as both compassionate and principled.

Protecting your personal reputation

This crisis also underscores the importance of the personal brand of each executive involved. In an era where social media and public perception can significantly impact career trajectories, how an executive communicates during a crisis can profoundly influence their future opportunities. An executive known for handling tough situations with grace, openness, and a clear plan can enhance their reputation, becoming a trusted leader in their industry and among their workforce.

As the dust settles, these executives would continue to reflect on the crisis communication, learning and adapting from feedback to enhance their strategies. This continual improvement demonstrates a commitment to excellence and ethical leadership, reinforcing trust with current and future stakeholders and setting a precedent for handling crises with integrity.

Related: A Four-Point Checklist For Effective Brand Crisis Communication

The story of Foxtrot, with its abrupt end, thus transforms from a tale of caution to one of understanding, illustrating how critical the role of communication is in leadership. The contrast between what happened and what could have been offers a stark lesson: in times of crisis, how executives communicate can either compound the tragedy or become a pivotal point for leadership excellence, shaping both the brand's and their own personal reputations in the business community.

Christopher Salvi

Entrepreneur Leadership Network® VIP

CEO of Salvi

Christopher Salvi is CEO of Salvi, an executive communications and content agency. His main roles include advising clients in executive communications and leading the team to execute at the highest level. Salvi is also the executive producer of The CEO Series, facilitating guests and partnerships.

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