What to do when you discover crisis brewing?

Inspite of the best risk management plan that you and your team would have come up with, many small but important ones still slip through the gaps and raise their ugly head during the execution phase of the project. Whenever there is any risk foreseen, it is best to intimate the stake holders about the same so that they also adjust their view about the project. Some project managers think that they still have time to correct their course and wait and watch. They believe that if others come to know about the brewing crisis, it will portray a bad self-image. But later on when the crisis snowballs, and goes out of control, everyone comes to know about it anyway.

Here is what I think the PM should do. 

Intimate the stake holders on:

1.                  What is the situation

2.                  What could be the possible outcome of the same

3.                  What are the corrective actions that are being planned for it

Also it is good to ask for suggestions from the stakeholders.