When Systems Fail: Putting Customers First with Gemba and Omnichannel Communication

The recent CrowdStrike outage, which according to Microsoft affected 8.5 million Windows devices (less than 1% of all Windows machines), has underscored the far-reaching consequences of even minor system failures in today's interconnected world. While the percentage of affected devices may seem small, the outage's impact on critical services across various industries highlights the vulnerability of our digital infrastructure.

In the face of system failures, customers are often the ones who bear the brunt of the disruption. It’s imperative that organizations shift their focus from internal damage control to customer care. Here’s how:

The Customer is King, Even in Crisis:

• Empathy is Key: Understand that your customers are facing frustration and potential losses. Acknowledge their pain and communicate that their experience is a priority.
• Transparent Communication: Be open and honest about the situation. Provide regular updates, even if there's no new information to share. Avoid making promises you can't keep.
• Swift Action: Prioritize restoring normal operations as quickly as possible. Communicate a clear timeline and stick to it as closely as possible.
• Mitigate Damages: Offer practical support to help customers recover. This might include technical assistance, financial compensation, or alternative solutions.
• Learn and Improve: Use the experience to enhance your systems and processes. Demonstrate a commitment to preventing similar issues in the future.

Building trust for the long haul

How an organization responds to a crisis can significantly impact its reputation and customer loyalty. By prioritizing customer needs and demonstrating a genuine commitment to making things right, you can turn a negative situation into an opportunity to strengthen relationships.

Remember, while system failures are inevitable, how you handle them defines your organization's character.

To ensure effective communication during a crisis, it's essential to leverage all available channels. This includes email, phone, social media, and in-app messaging. Consistent messaging across all platforms is crucial to maintain customer trust.

Additionally, practicing Gemba, a Lean management principle of going to the source to understand a situation, can provide invaluable insights into the customer experience during a crisis. By directly engaging with affected customers, organizations can gather real-time feedback, identify pain points, and implement immediate solutions. Gemba helps bridge the gap between frontline staff and leadership, fostering a culture of rapid response and problem-solving.

The Financial Fallout

CrowdStrike's market capitalization has plummeted by 20% in the aftermath of the outage, according to a report by Reuters (Source: CrowdStrike in cursed grip of corporate klutz club | Reuters). This reflects a broader trend, with a study by Australian consultant Senate SHJ finding an average stock-price drop of 12% for companies experiencing crises (Source: CrowdStrike in cursed grip of corporate klutz club | Reuters). The severity of the impact depends on the industry and the specific nature of the crisis.

The Cost to Businesses

The outage has had a significant financial impact beyond CrowdStrike's own losses. Parametrix, a provider of cloud monitoring and insurance services, estimates insured losses for Fortune 500 companies alone to be between $540 million and $1.08 billion (Source: Reuters). Jonatan Hatzor, CEO of Parametrix, believes the global financial toll could reach $15 billion, with insured losses potentially reaching $1.5-3 billion (Source: Reuters).

Following the incident, Malaysia's digital minister called on Microsoft and CrowdStrike to consider compensating affected businesses (Source: Reuters).

Picture source:Malaysia asks Microsoft, CrowdStrike to consider covering losses from global outage (yahoo.com)