How Does a Good Leader React to Crisis?

1) Remain calm. Running around frantically or reacting to excited or worried people creates the image that things are much worse. Remaining calm has a calming effect on others and demonstrates that you are in charge of your emotions. Along with this, when sending out emails, avoid emotionally charged words and stick to facts:

Good example: "Today, we were informed that our margins have become razor thin and we are surviving by borrowing money to help us through this difficult time."

Bad example: "As you may have noticed, we bleeding money and our profitability is in the tank. We are going through some rough times and we see no end in sight so we are forced to go to bank to keep us afloat."

2) Find solutions to your crisis and focus on those. Avoid blaming people. Even though some people or divisions may have not been generating revenue for a while, they are generally trying to do so and blaming them reduces morale throughout the company. Some people may have actively torpedoed the company but instead of pointing the finger, focus on solutions. If you need to call out someone who deliberately hurt the company, call him/her out deliberately, calmly, and then explain how you are going to fix the problem; do not spend time talking about this person which detracts from your solutions.

3) Put together a fire-fighting team. These people will have one job and that is to implement your solutions or possibly to find solutions. Do not use the regular employees since they may have been part of the problem to begin with and they presumably already have other jobs; you need to find someone that will not affect the company too much if s/he is distracted with other work. These fire-fighters must be people that others trust and they must have a lot of authority over budgets, the ability to move people around, recommend removal of people (no firing authority), and absolute visibility to the entire company including you. They must also have flexibility to modify your plan if they think that it isn't working or won't work. Also, give these people a deadline, say three months, and a firm goal (or ten) like cut budget overruns by 70%. 

Good leaders do not react -- they respond!