A crisis is a critical incident or situation that can potentially damage your company's reputation, put executives' integrity on the line, impact your stock price, even threaten your company's existence.
We think of a crisis as a dramatic event, like an earthquake, a bankruptcy filing or a product recall. But there are other less spectacular occurrences that can create crises. Executives trade barbs publicly in the midst of a merger. Back orders and bad service cause a public outcry. A company reorganization makes investors nervous.
Even the worst public relations nightmare can be neutralized by a swift, decisive, sincere response. In recent years, the Odwalla product failure resulted in a tragic loss of life and yet Odwalla emerged as a caring and responsive corporation due to their rapid and appropriate response to the public health threat. Odwalla's timely, factual communication with victims' families, the public and the media literally saved their company from extinction.
What's on the Line
Every organization is vulnerable to reputation-shattering situations. This isn't just about toxic spills and defective products. A crisis is anything that could lead the public to lose confidence in your company or your leadership.
"It won't happen to us."
Denial is a powerful force. Many executives want to believe that they can dodge the bullet. While highly publicized disasters in recent years have helped drive the development of crisis communication planning in many organizations, most companies still either don't have a plan or don't practice the plan they have.
Small companies and consultants aren't immune to crisis either. With small profit margins and big personal responsibilities, sole owners and family businesses can't afford a crisis that jeopardizes the company's good name. A lapse in good customer service practices or a project gone wrong can wipe out everything you've worked for.
Disaster Management 101
Be prepared. According to an industry study, only one in five companies is prepared for a crisis. Don't wait until a crisis occurs to think about a crisis plan. If your organization doesn't include experienced crisis planners, hire a crisis communications consulting firm like The Kennedy Group to help you assess your risks. Starting at the top of your organization, form a crisis communication team to develop an action plan.
Take stock before drafting a plan. To help you identify strengths and weaknesses, conduct an inventory of resources and communications channels already in place. Look at everything from the employee directory to the availability of extra manpower in emergency situations.
Don't spare resources when a crisis occurs. Get the right people involved as soon as possible.
Get help now. Most corporate communications professionals wear many hats - usually marketing, public relations and more - and most aren't trained to handle crisis communications. You'll need help immediately from specialists who are qualified to help you evaluate and respond effectively.
Train employees. A crisis communication plan is only as good as the training that accompanies it. According to a University of Kansas study, only one in three organizations with crisis communication plans have practiced or conducted crisis training during the previous 24 months.
During a crisis every employee in your organization should be kept informed as the situation develops and should know what to do even if his or her role is to simply keep working as usual.
Take action. A crisis is a situation that is out of control. Get control and keep it by making sound decisions, taking corrective action and facilitating open and honest communications.
Know your audience. Your plan should include a detailed list of audiences as well as notification procedures. Don't wait for a crisis to cultivate relationships with important audience influencers.
In many cases, the media is key to successful crisis communication. Their power to make or break a company during crisis cannot be denied. If your company does not maintain contact with media personnel and outlets, don't count on establishing relationships in the heat of a crisis. To ensure access to the media and control of the story, crisis communications specialists who have well-established media relationships should be part of your team.
Communicate with integrity. If you do nothing else to prepare for crisis, prepare your spokespeople. Work with your executive team and subject matter experts to develop consistent messages that demonstrate the company's responsibility and good corporate citizenship.
Be proactive. Your spokesperson is someone who is empowered to act on behalf of the company ¾ immediately. Bring on the president or the appropriate subject matter expert. If the company is to blame, take responsibility. Don't hide behind your attorneys and don't designate an attorney as your only spokesperson unless your company is a law firm.
If you want control of the message, put your information in the pipeline and keep it coming.
The Exxon Valdez tragedy is practically synonymous with the word "disaster". That's because Exxon didn't take swift, decisive and positive action in the hours immediately following the accident. The CEO was unavailable for several days after the accident and when the national press interviewed him, he was defensive and unprepared to explain what happened. The public relations and financial consequences were devastating and Exxon's public relations recovery took years.