Today’s episode - Crisis Management Masterclass

• Please support our sponsor. They provide valuable information for you and me. 

• If you enjoy this newsletter, please consider sharing it with your friends and business contacts by clicking the button below. ⬇️ 

  Share the newsletter

Good Morning! ✋ 

Imagine a software update, a seemingly minor configuration change, causing a global outage, affecting millions of systems, and halting business operations worldwide. This was the crisis CrowdStrike faced on July 19th. A masterclass in damage control, transparency, and customer-centric leadership followed. This is the story of how CrowdStrike, led by George Kurtz, survived and thrived, turning a potential disaster into a testament to their resilience and commitment.

Before we dive in, consider our Premium membership.

Don't let another day go by without taking control of your financial destiny. Subscribe to Investing Wise Academy's premium membership today and unlock a world of benefits designed to empower you on your investment journey.

Why Subscribe?

• Masterclass Content: Dive deep into advanced investment strategies and gain invaluable insights from industry experts through our exclusive masterclass series.

• Master the Market: Our comprehensive resources will help you gain the skills and confidence to navigate the market's complexities.

• Unveil Your Financial Journey: Discover the secrets to building a secure and prosperous financial future through personalized guidance and expert strategies.

• Win the Long Game by Managing Risk: Use effective risk management techniques to protect your investments and maximize your returns.

• And Much More! Access a wealth of additional resources, tools, and community support to help you achieve your financial goals.

Our premium membership is your key to unlocking a world of financial opportunities. Don't miss out – subscribe today and start building your desired future!

Limited Trial Ongoing!

Paying the bills

Our newsletter is powered by #beehiiv, which partners with trustworthy and high-quality advertisers. When you click, not only do you have the opportunity to benefit from the ads, but you also help support our efforts to improve our newsletter for you as our readers or listeners. All profits are reinvested into growing our newsletter to provide more excellent value. Your genuine engagement with the ads would mean a lot to us.

Today’s partners …

This episode is also sponsored by DeFi Technologies.

DeFi Technologies's financial performance - Valour achieved its highest monthly net inflows of 2024, recording C$14.1 million (US$10.4 million) in August. This milestone highlights strong investor confidence and the growing demand for Valour's product suite.

Valour is part of the asset management business line of DeFi Technologies Inc.

This video was conducted on behalf of DeFi Technologies Inc, and was funded by Gold Standard Media LLC and/or affiliates. For our full disclaimer, please visit https://portal.goldstandardir.com/disclaimer/DEFTF-303

https://defi.tech/ - CBOE: DEFI | OTC: DEFTF

In the fast-moving world of cybersecurity, things can change in an instant. A botched software update can bring down millions of systems, as happened to CrowdStrike on July 19th. The company, known for its cutting-edge cybersecurity solutions, made headlines for all the wrong reasons when a widespread technical issue impacted businesses globally.

The immediate reaction from the public and industry insiders was to assume this would be disastrous for CrowdStrike's future. Yet, against all odds, the company came back stronger, reporting exceptional sales numbers and excellent customer retention in its next earnings report. 

The Incident: A Global Shutdown

On July 19th, a simple configuration change in CrowdStrike's software triggered massive outages worldwide. These tech issues had a ripple effect, shutting down millions of systems, causing immense disruptions for businesses, and raising questions about the company’s reliability. Customers from various industries, including government agencies and major corporations, were affected. Many people feared that the damage would be irreversible.

• What Happened?

  • A misconfigured software update led to widespread outages.

  • Systems globally were affected, causing major disruptions for companies.

CrowdStrike knew they had to act fast. The company, under George Kurtz’s leadership, decided to face the situation head-on, communicating openly about the issue from day one.

A Masterclass in Damage Control: CrowdStrike's Response

When faced with a crisis of this magnitude, many companies might have hesitated or tried to downplay the situation. But George Kurtz had a different approach—he took full responsibility.

"We wanted to be as transparent as possible," Kurtz explained. From the moment the issue occurred, he was personally on the phone with key stakeholders, from CEOs of major corporations to government agencies, ensuring they knew exactly what had happened. This direct, no-holds-barred approach was crucial in maintaining trust with their customers.

• Key Actions:

  • Personal Calls: Kurtz personally contacted the CEOs of affected companies, showing that CrowdStrike took the issue seriously.

  • Transparency: The company didn’t try to hide the mistake; they explained what went wrong and what they were doing to fix it.

  • Team Effort: Kurtz and his team worked non-stop to resolve the issue, dividing tasks and working round the clock.

Customer Loyalty was put to the test during this crisis, but CrowdStrike’s handling of the situation strengthened relationships. Customers appreciated the openness, and, rather than walking away, many stayed and even closed new deals with the company. 

Customer Trust: The Key to Survival

A major concern after the incident was whether CrowdStrike would lose customers, freeze ongoing deals, or halt new ones. Surprisingly, the opposite happened.

CrowdStrike closed major deals in the same quarter despite the incident. Their customers not only appreciated the transparency but also the speed with which the company worked to resolve the issue. 

• Key Factors in Retaining Customers:

  • Open Communication: Explaining the problem and being honest about the challenges earned respect.

  • Proactive Problem-Solving: The company quickly addressed the technical issues and focused on restoring customer systems as fast as possible.

  • Partnership Approach: Long-term customers understood that issues happen, and they valued CrowdStrike’s commitment to helping them recover.

Addressing Concerns: The Delta Lawsuit

However, not everything went smoothly. One outlier in this story was Delta Airlines, which considered legal action over the fallout from the outage. When asked about this, Kurtz acknowledged the situation, expressing regret over how the matter was handled.

While most customers were satisfied with the company’s efforts to resolve the issue, Delta was not. Kurtz made it clear that CrowdStrike was willing to sit down and resolve the issue, saying, “We’d love to work with Delta, find a resolution, and move forward constructively.”

Learning from Mistakes: Improving for the Future

The incident was a learning moment for CrowdStrike. Kurtz was transparent about what went wrong, describing it as a “configuration change that had been running for months without issues, but uncovered a bug in the validation process.”

• What Went Wrong?

  • A bug in the validation process caused the issue.

  • The update had been running for months before this error occurred.

Kurtz and his team made it clear that they had identified and corrected the problem. They focused on improving their quality assurance (Q.A.) processes to ensure such an issue wouldn't happen again. This commitment to improvement reassured customers that CrowdStrike was dedicated to delivering a reliable service.

Moving Forward: The Customer Commitment Package

To further restore trust and build stronger relationships with their clients, CrowdStrike introduced a Customer Commitment Package. Kurtz explained that this package wasn't just about offering discounts or rebates—it was about showing true partnership.

The package provided:

• Flexible Licensing: Giving customers more control and flexibility in how they use CrowdStrike's services.

• Added Value: Offering additional services or extending contracts to help make up for the disruption.

• Business Solutions: Sitting down with customers to identify their specific needs and finding ways to meet those through enhanced services.

Leadership Under Pressure: George Kurtz’s Philosophy

Throughout this ordeal, one thing remained clear: Kurtz’s leadership philosophy played a huge role in CrowdStrike’s response. He emphasized the importance of “endurance, focusing on outcomes, and teamwork.”

• Endurance and Focus: Kurtz likened the situation to racing cars, where “every detail counts and the goal is always on winning the race, no matter the obstacles.”

• Customer-Centric Leadership: By putting customers first, he turned a potentially disastrous situation into an opportunity to showcase the company’s commitment to its clients.

Final Thoughts: Turning a Crisis Into an Opportunity

While CrowdStrike’s July 19th incident could have been catastrophic, the company's transparent and proactive approach allowed it to bounce back. 

This story will likely be studied in business schools and journalism classes as a textbook example of handling a corporate crisis.

In a world where mistakes are inevitable, the real test of a company is how it responds. CrowdStrike passed this test with flying colors.

That’s it for this episode!

Thank you so much for reading today’s email! Your support is the only way I can write this email for free daily.

Kindly give us feedback in the poll below and share the newsletter with other investors if you find it valuable!

Remember: Investing is a journey, not a destination. It's about making informed decisions, managing risk, and staying committed to your long-term goals. So, take the time to research, experiment, and find the perfect recipe for your balanced portfolio.

Cheers to wealth, wisdom, and a dash of madness!

The Investing Wise Academy Team

Disclaimer: This newsletter is for informational purposes only and should not be considered financial advice. Please consult with a financial advisor before making any investment decisions.