Managing a full blown corporate crisis is one of the hardest things a communicator will ever have to do. Of course, it’s always been vitally important to protect the profitability and reputation of your organization, but as scrutiny of corporate practice rises, so too does the importance attached to effective crisis management.

Failure to prevent or manage an incident can lead to a loss of your organization’s ‘license to operate’. Interestingly, your own personal brand can also be impacted by your response to a crisis – for instance, we’ve heard from several members that successfully managing a crisis instantly makes a communicator more employable, having navigated a course through heavy fire.

So, both for your organization and for you personally, a crisis raises the stakes like nothing else. With this in mind, CEC spent the last few months learning how the best organizations prevent, prepare for, and respond to major crises. CEC members can check out our new topic center for more detailed guidance, or call our advisory team to discuss your crisis planning.

1. Build a Preventative Culture

Most companies have a contingency plan of some description should something go wrong. But actually using that crisis response plan is a bit like shutting the stable door after the horse has bolted – by then, the damage is already done, and you’re playing a game of damage limitation instead of damage prevention.

What the best do: Employees often have the most practical understanding of the risks that the company faces by virtue of their day-to-day business activities.  Instead of simply telling them how to behave and what to do, try to tap into their knowledge to identify and mitigate risks.

Featured Resource: Caterpillar seeks to identify barriers to risk-free behavior by asking their employees simple questions such as ‘What prevents you from working safely’. In doing so, they make their employees active participants in risk management, rather than simply the objects of communication related to risks.

2. Prepare the Enterprise for Crises

We heard stories of crisis plans which might have been better described as crisis encyclopedias! Under duress, human decision making is simplified. Lengthy documents will be ignored, at best, or hinder action, at worst. Keep crisis planning simple and action-orientated.

What the best do: Create dynamic crisis systems that provide critical information and enable decision making in the moment and at speed. Any information provided to employees should be instructional, and help them take action.

Featured Resource: Timkin provides their employees with a clear framework that enables employees to assess the criticality of an incident, and escalate it to the right people.

3. Respond to Corporate Crises

Don’t fall into a state of paralysis or wait for unnecessary details before communicating. If you wait too long, you leave your critics the opportunity to set the agenda in discussing the event. The 24-hour news cycle often demands instant updates, as soon as possible.

What the best do: Remember that corporate messaging may not be stakeholders’ only (or even preferred!) source of information during a crisis. Find out where key conversations are taking place, and look for opportunities to influence stakeholders on their own terms.

Featured Resource: We canvassed a whole host of members to get their top tips for navigating a crisis, and compiled their collective expertise onto a single page: Guidance for Responding to Crises

Share your experiences

Have you managed a major crisis? What did you find most difficult? What did you learn? We’d love to hear from you!

“Hope for the best – plan for the worst.”  I’ve heard this saying many times in my life, used in a wide range of contexts.  Most recently, it came up in a conversation with a CEC member in the Financial Services industry who was referring to his company’s approach to crisis communications.  He emphasized how little room for error there seemed to be these days, mentioning that, despite prudent business practices over the past few years, the public still considered his company “guilty by association,” simply due to a general loss of confidence in the industry.  Trust had eroded and scrutiny was on the rise.

Data from CEC’s sister program, the Corporate Ethics & Leadership Council (CELC), confirms that this is not an isolated perspective.  A recent study of corporate leaders reveals that 77% believe media scrutiny has increased, while 82% report a proliferation of new risk types.  These developments combined with the continued rise in citizen journalism and fluid information flow are making communicators feel more vulnerable to crises.

Faced with such a risky environment, it might seem difficult to truly “plan for the worst.” After all, this assumes that your company can create a comprehensive list of potential crises as respective plans.  And while I won’t recommend that you don’t plan for individual scenarios or try to prevent crises from happening (check out our latest resources on avoiding crisis), I do think there are some things that companies should do to ensure that they are prepared to respond effectively when a crisis hits.

(1)     Assess and address the crisis quickly – If there is one thing that all crisis managers know, it’s that you have to act quickly.  The best practitioners embed incident assessment guides and escalation protocols into the business to make sure that, when a potential crisis occurs, employees can quickly determine its severity and outline the critical information to gather.  The criteria (e.g., financial impact, degree of public concern, operational impact, intensity of media scrutiny) will be unique to each institution.  The important thing is that you establish protocols that are clear and allow you to act fast.

CEC members can read an example from TD Bank which shows how to accurately gauge a crisis’ severity, and promptly report it to Communications.

(2)    Manage the ongoing debate – Once word of a crisis is out to the public, it has the potential to spread like wildfire.  Gone are the days when Communications could control the messages that circulate (that is if there truly ever was “control”) — conversations will evolve quickly as information becomes available.  So, in order to manage the ongoing debate, companies must align efforts to closely listen to/monitor sentiment to determine where stakeholders are going for their information and which messages and voices are particularly influential.

CEC members can access the Stakeholder Listening and Understanding Topic Center to learn what drives stakeholder opinion and determine which conversations to participate in.

(3)    Enable employees to have conversation with stakeholders – While some might want Communications to screen every external conversation related to a crisis, the reality is that there simply aren’t the resources.  Comms budgets are flat so communicators who are already spread thin as it is will be further stretched during a crisis.  One thing that organizations can do is to help managers effectively engage directly with external stakeholders.  After all, when a crisis hits, your external business partners, customers, and other key stakeholders are going to pick up the phone and call their contacts at your organization.  In terms of “planning for the worst,” one of the best things that communicators can do is give employees the tools to have appropriately aligned conversations with external parties.

CEC members can take a look at Alcoa’s Stakeholder Relationships Playbook for equipping managers with the tools to engage with stakeholders.

CEC Related Resources:

• Crisis Management: Our Latest Observations
• Building a Crisis Communication System
• Crisis Communication Tools

CEC Related Blogs:

• What’s Worse than a Crisis?
• Discussions Spotlight: Crisis Alert Systems
• 4 Lessons on How to Manage a Crisis (and it’s not how NewsCorp did it)

• They could all have been prevented
• They did significant damage each company’s reputation, and to their financial performance

With the stakes higher than ever before, CEC is updating its existing work on crisis management. And, with the above in mind, we’re looking at two different angles.

1. Building a Preventative Culture

In spite of the best efforts of companies to apply processes, rules, and expectations, this isn’t always enough to drive behavior change – we’ve all seen rules bent or broken to “get the job done”. And yet, we are reliant upon employees maintaining standards to maintain product quality, information security, legal and ethical compliance, and personal or public safety – if they fail to do so, the consequences for the organization can be disastrous.

Communications Challenges

CEC is looking at some of the reasons that employees don’t always act in accordance with the standards required by their organization, its regulators, and other crucial stakeholder groups. Our conversations indicate that many communicators spend a disproportionate amount of time building employee awareness without addressing the personal and systemic barriers to desired behavior. Indeed, research shows that only 6% of employee-observed misconduct is escalated to business leadership, preventing the business from responding to rectify the problem. We’ve thought about what prevents employees from acting in a way that prevents crises. Here’s our first shot, below:

Questions for you:
We’d love to hear your reaction to this brainstorm.  

• Which of these challenges do you struggle with most?
• How do you raise employee awareness of expected standards?
• How do you bring employee voice to leaders, to avoid potential crises?

 

Join us for a webinar on 29 September to learn how to avoid crises by creating a preventative safety culture.

2. Responding to Crises

Of course, some organizations will experience occasions where attempts at prevention fail. In these instances, as communicators seek to mitigate the damage done to their reputation, the increasingly networked online environment has decreased the amount of control communicators possess of their message.

3 Phases of Response

Conversations with members indicate that there’s only so much that you can plan for in a crisis situation. Under duress, 100-page crisis manuals, however ‘perfect’, will likely be ignored. Leading companies have told us that rather than fight fires, it’s vital to plan your response strategically. In the past, we’ve explored how the best companies build crisis communication systems that are able to respond quickly. In response to a crisis we think that there are three distinct phases:

1. Assess the Situation to determine the scope of the issue; get up to speed quickly
2. Coordinate Response to contain the damage caused by the event
3. Manage the Ongoing Debate to protect your company’s reputation

In each phase communicators face distinct challenges. Visit our latest observations on the website to learn more about how we plan to uncover effective ways to overcoming these crisis response challenges.

Our initial conversations indicate that the most successful navigators of crises are those who go beyond simply seeking to “get our point of view across” and to have their message heard. Successful crisis managers seek to involve themselves in conversations and to enable favorable stakeholders, such as employees, to speak on behalf of the company.

Questions for You:

• Have you experienced a crisis at your organization?
• How did you gather information internally, and use this to formulate a response strategy?
• How have you planned to manage future crises?

Interested in Sharing Your Perspective?

CEC would love to learn from your experiences and involve your perspective in our research. Please email Dan O’Keeffe-O’Donovan,  to discuss crisis communication.

CEC Related Resources:

• Crisis Management: Our Latest Observations
• Avoiding Crises: How to Build a Preventative Safety Culture
• Building a Crisis Communication System
• Crisis Communication Tools
• Communicating through a Product Crisis
  

CEC Related Blogs:

• 4 Lessons on How to Manage a Crisis (and it’s not how NewsCorp did it)
• What’s Worse than a Crisis?
• Discussions Spotlight: Crisis Alert Systems
• 6 Steps to Facebook Reputation Management

So where did News Corp go wrong in their handling of the crisis?

1. The belief they could contain the crisis: Many analysts, and indeed Rupert Murdoch himself, believed that shutting down the News of the World (NoTW) would  limit the damage. As it only represented 1% of News Corp it seemed a worthy sacrifice.  They were wrong. Circulation of News International’s other titles (The Times and The Sun) have been at an all time low; the share price of News Corp has fallen by almost 20% since the scandal started meaning billions of dollars have been wiped off the company’s market value.

2. Leadership failure to take responsibility: Rupert Murdoch IS News Corp and its brands to the public– they were immediately looking to him for a response. He shunned accountability by saying that he could not possibly know what goes on in an invidvidual paper – a comment that made him and News International CEO Rebekah Brooks seem like either incompetent leaders or just acting in their own self interests. Angry staff even recorded and leaked her speech to Sky News.

3. Lack of a credible spokesperson: Initially the media spokesperson, Simon Greenberg, was left to handle the media alone, giving the impression that leadership weren’t taking the issue seriously themselves. He couldn’t respond directly to difficult questions being thrown at him, particularly when public sentiment suddenly turned viciously against them in light of the Milly Dowler and London bombing victim revelations.

There is nothing like having faced a crisis to understand what you would do differently next time. I’ve outlined below a few of the lessons we’ve learnt from speaking to companies across our network:

Lesson #1: Have a clear system for escalating issues to, and partnering with, central – never underestimate the ability of a seemingly local issue to spread.  With most companies having multiple divisions and geographies it’s essential that they have a clear understanding of what and when to escalate issues so other parts of the business aren’t blindsided.  Check out our new framework for global/local partnerships that helps people on the ground figure out when they should handle things alone and when (and how) they should escalate

Lesson #2: Stay ahead of stakeholder sentiment – with the wave of public sentiment about a crisis changing all the time it is critical for companies to stay ahead of the game.  Traditional monitoring of the media will leave you constantly being reactive. An integrated system to monitor across all digital media will enable you listen from the stakeholders perspective and pre-empt reaction to statements.  Check out how Monsanto’s integrated monitoring that keeps them one step ahead.

Lesson #3: Ensure that leaders take reputational, as well as business, fallout into account – share stakeholder sentiment with business leaders to make sure they are taking reputational risks into account when both making business decisions and communicating more broadly. Check out our podcast series with Richard Woods at Capital One where he shares his template for Reputation Risk Reporting.

Lesson #4: Empower staff to speak on your behalf– one thing is for certain in a public crisis: your employees will be asked by everyone they know (and often now the press as they are so easy to find on Facebook) to dish the dirt and share the inside scoop of what is really happening. This is perfectly natural and can’t really be controlled. Your best bet is to make sure employees feel they know what is going on and explaining what steps are in place so that when asked they at least feel informed.  Check out how Monsanto enable employees to participate

We’d love to hear any other tips or lessons you’ve learnt in how to prepare for and handle a crisis once it hits. Share your ideas below or get in touch with our research team who are currently working on a project in this field

Related CEC Resources:

Communicate About Challenging Issues Topic Center

The 5 T’s of Responding to Online Criticism

Integrate Your Listening Efforts

Reputation Management Topic Center

So it wasn’t until opening day that I realized the goal is similar to the efforts of advanced baseball statistics, which try to more completely capture a player’s value by comparing his contribution to a replacement. The only difference is that in baseball a replacement still generates some value whereas in communications the replacement actually reduces a company’s value by allowing negative coverage.  But while baseball statisticians can’t add up the hits of a replacement that doesn’t actually play any more that communicators can count the articles that were never written, they know they get pretty close by merely calculating the average or expected value of the replacement. So if communicators can focus on just an expected number of mentions, we can similarly develop a more accurate representation of our value.

The goal of the process below is to articulate a defensible determination of the expected number of negative mentions without Communications staff and add it to the positive ones we already take credit for:

Step 1: Count the number of specific interventions you made that stopped a story from appearing. Ensure credibility by documenting “situation action result” just as you would for any proactively positive effort you track.

Step 2: Determine the ratio of total negative media mentions to the number of specific events that generated them. So for example, 100 negative mentions stemming from ten separate events or stories would yield a ratio of 10:1.

Step 3: Apply that ratio to your number of interventions that prevented coverage to determine the expected number of mentions prevented. So, in the example above, if you stopped 3 stories, you likely prevented 30 mentions by applying the 10:1 ratio.

Step 4: Add those mentions to the number of mentions you reported as positive and (assuming that the value of a positive story is the exact inverse of a negative one) you have a more accurate description of your value.

Step 5: If you further articulate the value of media mentions (for instance, by paid media equivalent or as a boost to a reputation metric), then determine the contribution of one positive mention and multiply that by the total number of negative mentions. So, if the same company above determined that they had 500 positive mentions worth a paid equivalent $1000, then the additional 30 mentions prevented would be worth an additional $60.

Now, obviously I haven’t achieved the impossible any more than the Cubs will win it all this year. Numerous assumptions erode the accuracy of this process – perhaps most significantly the assumed equivalency between the value of negative and positive stories. But as the Cubs keep trying (for at least another month), so should we chase the impossible dream for communicators. What do you do to ensure your team gets credit for all the stories that you prevent?

Related CEC Research

• Measurement and Reporting Topic Center
• Effective PR Metrics Programs
• Capital One’s Reputation Risk Report

By Kirsten Robinson

Graphic and disturbing footage of Japan’s earthquake and ensuing tsunami serve as a solemn reminder that large-scale crises can—and will—occur at any time. In the aftermath, tens of thousands of stranded office workers wandered the streets of Tokyo, searching for transportation and a way to contact relatives.

Good communication is absolutely critical in a crisis situation. Not only as a means for people to speak to loved ones, but to also enable them to get critical information when it’s needed most. In the wake of recent natural disasters, communicators must ask themselves—are we well-equipped to communicate with employees in a time of crisis? An executive in our Employee Communications Forum recently posed a similar question, spurring a collective of insights from other members.

Here are a few takeaways from the discussion about how other member companies utilize crisis alert systems:

• Mass Broadcast. Sending text messages, pages, e-mails and automated phone calls to pre-set distribution lists, “robo call” systems cover multiple bases with one tool. One executive’s company uses a mass broadcast notification system provided by Everbridge, which enables companies to set up user profiles specifying how individuals prefer to be contacted.  A PA system, while only useful during business hours, lets Communications reach out to the entire organization in a location at one time.
• New Media. In 140 characters or less, one Tweet can instantaneously disseminate information to employees using Twitter. Or, post news to your company’s Facebook page. And, all of the mobile apps available for these platforms make it easier for Communications to publish information to a mass audience even when away from their computers.
• Employee Hotline. Rather than pushing information to employees, hotlines provide an option for employees to seek it out. Be sure to prominently display the hotline number on your company’s Intranet, or send it to all employees.
• Intranet Bulletin. Social media works well for publishing news publicly, but Intranets are effective for posting sensitive information to the Web that your company doesn’t want made available beyond the network. One member incorporated a “Breaking News” bulletin on their site that is frequently updated for employees.

CEC members, see what other members had to say and join the discussion on Crisis Alert Systems and submit your own ideas. Also, be sure to view additional resources on Building a Crisis Communications System.

Strong communication is at the center of all this. While specific responses will vary by organization, it’s vital that we share ideas and best practices to serve societal (and business) interests. I’ve started to collect a few of these priorities and ideas – please help others by sharing what you’re doing.  And let us know what questions you have for your peers. 

1)    Get informed – In this time of crisis, there is rapidly evolving, occasionally conflicting information on a complicated set of issues.  Communications’ ability to provide a measured report on facts and probabilities will support operational decision-making and soothe a broader set of employees.

2)    Ensure continued communication with affected employees, customers, and suppliers – No matter the scope of your global operations, it’s important to establish multiple outlets/channels for affected stakeholders to give and receive information.  To whatever extent possible establish an on-the-ground network, in addition to mass digital channels in case infrastructure worsens.

3)    Inform and prepare to discuss your response – Our information and crisis expertise may inform decisions ranging from feasibility of local operations to optimal employee donation programs from distant regions.  All companies can expect media outlets to inquire about their response and our effectiveness at telling a clear and compelling narrative is critical to our reputation and signals the state of current threat levels and responses to a mass audience.

4)    Mobilize employee support – Provide an outlet for employees to donate.  Articulate your positoin on any matching gifts or corporate efforts.  Keep people informed of affected parts of the business and invite people to reach out to their colleagues if possible.  This is our opportunity to be human in all of this.

5)    Examine policy implications – Hearings are already being held in Congress about the future of nuclear investments, but this crisis will undoubtedly launch discussions on a variety of issues that may affect your business.  The timing and nature of participation may vary, but it’s probably not bad to begin talking (or at minimum, listening) now.

Hopefully, this post and subsequent discussion forums within the CEC can allow communicators to share what else they’re doing, what’s working, and how others are viewing the responsibility of employers in these situations. Is there a right level of transportation, housing, or financial support that we should provide employees and the broader population?  Is there anything commonly done that’s counterproductive?

No matter what the response, all of us have been distressed by the news.  By beginning this dialogue, we at the CEC hope we can surface productive solutions and ideas for communicators on the frontline.

Reporters on the scene witnessed the larger story behind the footage.  For a great account, check out LA Times coverage: http://articles.latimes.com/2011/feb/06/world/la-fg-egypt-army-scene-20110205

When Gen. Ruwaini first faced the clamoring crowds of Tahrir Square, he had the presence to wait out the onslaught of verbal attacks for a chance to address the younger protesters who had started the revolution.  He first applauded them for their courage and expressed his affection for them as youth of Egypt, assuring them that he had no intention of turning military force against them.  He then called them out for certain hooligan behaviors, and warned them to be careful not to become pawns of the political parties.  Next came perhaps his most glorious moment—he sat on the roof of his car and simply listened while the crowd passed around his microphone and protesters vented all their anger and frustration.  When they’d finally simmered down a bit, he and his soldiers pressed their way past the protester-constructed barriers around Tahrir Square and entered the crowd to continue his listening campaign and establish the military presence as a peacekeeping force rather than a threat.

Whether Gen. Ruwaini had been reading the CEC web page or not, I can’t verify.  But his actions are a great example of best practice for communicating with stakeholders in a time of uncertainty or crisis.

1) Get your leaders out there, in front of people, in person if possible.

2) Listen.  Listen.  Listen.

3) Make sure people know there will be no punishment for speaking out (especially your employees!).

4) Know that you will hear things you don’t like.  The fact that you let people vent will get you brownie points you can’t get any other way.

5) Talk to stakeholders on their terms, in language they understand, in a way that’s relevant to them.

6) The fact that you’re listening and establishing that relationship of trust means that you’ll be able to boldly say and do things that they may or may not agree with.

7) Make sure your efforts get a little positive media coverage

How did Egypt rid itself of a dictator with minimal bloodshed?  Certainly a lot of factors.  But as I think of Gen. Ruwaini patiently listening to frustrated protesters, I have to think he played a big part.

We live in a world that expects open communications. This means that as communicators, we constantly face the tough balancing act of: communicating the truth, communicating what is most relevant to stakeholders, AND knowing when to communicate at all.

For example: How often do the following words come into a consumer’s mind when they are shopping in a retail store? 

Floods. Labor markets. Paksitan. China. Supply chains.

Very rarely. These are not typical thoughts in a shopper’s mind when they are searching for a good deal on the latest trendy sweater, cute T, or pair of athletic socks. But for a large number of retailers, the 15-year high in the price of cotton due to abnormal floods and droughts in Asia is no longer a bearable dent in their supply chain costs. As prices for 2011 are set, many retailers are preparing for shoppers who will see a small to mid-sized price increase in clothing. In speaking with communicators facing this situation we are hearing valid questions like, “Is this something they need to know?” or “Would we be better off if we don’t draw attention to the situation?”

I’d say this is the $100 million question (second only to “what is the ROI of our activities?”) for many communicators today. As with many similar situations, it comes down to a balancing act. So, let’s look at some of the pros and cons of communicating this situation (I’m sure there are MANY others, so feel free to share your thoughts):

Pros:

• If your CSR strategy is profitable for both your business and society, it would be smart to also link it to your supply chain. For example, communication about the cotton crisis could provide an opportunity to highlight activities your organization is doing to better support the communities affected by the agricultural production of cotton.
• If you’re not communicating about the issue, employees may feel ill-equipped to discuss the price increases with other stakeholders. 
• And, obviously investors likely want to hear about shifts in pricing being made to maintain the same level of profits.

Cons:

• Consumers may not care about the reason; they just see the price increase.
• Consumers may not be especially price sensitive on a certain item — communicating about it may draw unnecessary attention.
• Not communicating about it may look like you are dishonest or have something to “hide” and could be damaging to your company’s reputation.

So, share with us: Would your team communicate about the reason behind the price increase? Would you try to target specific audiences with that message? And what criteria do you use in your own “balancing act” to determine when it has become necessary to respond?

Consider the following three profiles that emerged from the chief executives of New Jersey, New York City, and Newark as you think about directing your leaders in a crisis plan. 

The Absent Father
Chris Christie, Governor of New Jersey:  “I would have been doing the same thing here as I would have been there (Disney World)”   

The response:
Initially, Christie said there was nothing he could do in Trenton that he couldn’t do in Disney World.  He later claimed that it was impossible to return due to the very weather conditions he was seeking to address.  Lastly, he explained that his foremost obligation is to be a good father to his children and no duty in the state was important than that.  Unfortunately for Christie, criticism mounted as it became apparent that the Lt. Governor was on a planned trip to Mexico to be with her ailing father, and reports, however isolated, of babies born in stuck cars and unplowed state roads captured the media’s attention.   

The lesson:
Get your top executives onsite at a crisis.  If obligations preclude a physical presence, identify opportunities to embed their virtual presence while ensuring a clearly visible second-in-command is capable of administrating any duties. 

The Out-of-Touch Elitist
Mike Bloomberg, Mayor of New York City:  “The city is going fine. Broadway shows were full last night”

The response:
At first Bloomberg indicated that city life continued with minimal disruption; however, as more harrowing accounts emerged from outer boroughs, he went to defense then conciliation.  The transition provided painful for the consummate manager at one point retorting: “I’m angry too but yelling and complaining doesn’t help.”    

The lesson:
Don’t declare success until you’re sure that the crisis is over.  When confronted with short comings, find empathy for those affected quickly and without qualification. 

The Man of the People
Corey Booker, Mayor of Newark, NJ:  “I’m on my way to Treamont Ave now to help dig your mom out” (Via Twitter)

The response:
Mayor Booker took a hands-on approach appearing all over his city – shovel in hand – to personally clean cars and deliver diapers.  His response was also incredibly public as he chronicled his activities in detail on Twitter and responded to individual resident concerns.  

The lesson:
At least look busy.  Put a human face on the crisis and response.  And use social media to engage individuals not just blast out information. 

———————————————————–
Of course, the reality is that there are some crises where there’s little a chief executive can do, but Bloomberg and Christie faced a round of underwhelming polling while Time Magazine lauded Booker as a “blizzard superhero.”   Undoubtedly some simply wanted to vent at the combative budget slashing governor or prickly three-term mayor, but the recent storms remind us all of the importance of optics in directing executives in your crisis plans. 

But I’m still not sure what to make of this…

The Loose Cannon, Retiring CEO?
Ed Rendell, Outgoing Governor of Pennsylvania: “If this was in China do you think the Chinese would have called off the game?  People would have been marching down to the stadium. They would have walked and they would have been doing calculus on the way down.”   

So, what executives do you think have been best (or worst) in a crisis?