Looking after the likes of Union Pacific, Waste Management and former D.C. mayor Marion Barry has taught Judy Smith a thing or two.
FORTUNE — Judy Smith, former deputy press secretary to George H.W. Bush, has run interference on some of the country’s highest-profile scandals. She worked for Monica Lewinsky after her affair with Bill Clinton and helped the World Health Organization respond to the SARS outbreak. Clients of her firm, Smith & Co., have included Wal-Mart WMT , United Healthcare, and AIG AIG . Smith, who usually avoids the spotlight, took her crisis-management message public this year with a new book, Good Self, Bad Self: Transforming Your Worst Qualities Into Your Biggest Assets. Her career is also the inspiration for the ABC drama Scandal, which just began its second season. A seasoned voice of reason for troubled times, she shares a few tips with Fortune’s Anne VanderMey:
Plan for the worst-case scenario
One thing I tell every executive is that they should imagine the absolute worst possible crisis and then make a detailed response plan. Actually write it down. When you do that, every other crisis will be somewhere down on the scale in terms of magnitude, but parts of the strategy will still apply. You want to make a decision for the corporation that is consistent with its mission and objectives. It’s important not to get so close to the situation that you lose all perspective.
Stand up to your boss
I’ve seen crises escalate because people have let executives run wild. Say one woman doesn’t speak up about inappropriate sexual conduct. It could have been addressed, but because everyone looked the other way, instead of one woman complaining, it’s 10. Taking a stand initially makes you feel less popular, but you’ll get more respect. And maybe more important, that voice of dissent could be critical to the survival of the company.
The truth always comes out. It’s just a question of when. People make the mistake of being driven by denial and fear. Take Arnold Schwarzenegger. Think about how long he kept it a secret that he had a son with the housekeeper — 13 years. But it came out. Or look at Anthony Weiner or Bill Clinton. People have heard this before, but God, it’s so true: The cover-up is worse than the crime. Always.
Never waste a good crisis
People usually don’t understand that a crisis can be an opportunity, providing the momentum to address real problems in your organization. Years ago a discrimination suit spurred Texaco to take on systemic racism in its ranks. The way Johnson & Johnson JNJ dealt with the poisoned-Tylenol incident actually strengthened customers’ trust, and the packaging it introduced is now the industry standard. A lot of important reforms were touched off by a catastrophe.
This story is from the October 29, 2012 issue of Fortune.