CRISIS COMMUNICATION AND REPUTATION MANAGEMENT

Crisis management is a critical organizational function.  Failure can result in serious harm to stakeholders, losses for an organization, or end its very existence. Few circumstances test a company’s reputation or competency as severely as a crisis. Whether the impact is immediate or sustained over months and years, a crisis affects stakeholders within and outside of a company. Customers cancel orders. Employees raise questions. Directors are questioned. Shareholders get antsy. Competitors sense opportunity. Governments and regulators come knocking. Interest groups smell blood. Lawyers are not far behind.

A crisis is the ultimate unplanned activity and the ultimate test for managers. In a time of crisis, conventional management practices are inadequate and ways of responding usually insufficient. A crisis is defined here as a significant threat to operations that can have negative consequences if not handled properly.  In crisis management, the threat is the potential damage a crisis can inflict on an organization, its stakeholders, and an industry.  

A crisis can create three related threats:

• public safety
• financial loss
• reputation loss

Some crises, such as industrial accidents and product harm, can result in injuries and even loss of lives.  Crises can create financial loss by disrupting operations, creating a loss of market share/purchase intentions, or spawning lawsuits related to the crisis.  

A crisis reflects poorly on an organization and will damage a reputation to some degree.  Clearly these three threats are interrelated.  Injuries or deaths will result in financial and reputation loss while reputations have a financial impact on organizations.

Crisis management is a process designed to prevent or lessen the damage a crisis can inflict on an organization and its stakeholders.  As a process, crisis management is not just one thing.  Crisis management can be divided into three phases: 

• Pre-crisis (prepare)
• Crisis event/response (execute)
• Post-crisis (recover)

1.    Pre-Crisis Phase

Prevention involves seeking to reduce known risks that could lead to a crisis.  This is part of an organization’s risk management program.  Preparation involves creating the crisis management plan, selecting and training the crisis management team, and conducting exercises to test the crisis management plan and crisis management team. Organizations are better able to handle crises when they:

• have a crisis management plan that is updated at least annually
• have a designated crisis management team
• conduct exercises to test the plans and teams at least annually
• pre-draft some crisis messages

The planning and preparation allow crisis teams to react faster and to make more effective decisions. 

A crisis can take on many forms, including natural or man-made disasters, environmental spills, product tampering or recalls, labor disruptions or criminal acts, to name a few. What makes them a crisis is the fact that they are the focus of intense media scrutiny.

Although some risks are beyond a company’s control, others can be foreseen. Research shows that the vast majority of crises arise when companies fail to identify a potentially contentious issue at an earlier, more benign, stage, and to develop a plan of action to manage the issue before the issue manages them.

Creating a crisis communications plan

The issues audit becomes the front end of a company’s crisis communications plan, and arguably, the most important document in the plan. As a complement to a company’s emergency procedures, the crisis plan should contain detailed communications response procedures in the event that any of the potential crises identified in the communications audit, or unforeseen external events, come to pass.

The following is a checklist of the contents of a good crisis communications plan:

• Names and contact information of the crisis team/ spokespeople. People need to know who holds responsibility for leading the organization through the crisis.

• Crisis triage. Understanding what level of “crisis” you’re facing. Establishing criteria to decide when a minor incident has the potential to become a national crisis can be a challenge.

• ” First response. What information has top priority? How will you initially respond to media?

• Alert/ notification procedures. Who needs to get information, and in what order of priority? PR, by phone, e-mail, social media?

• Situation room. Assess the physical space that will be the nerve center for managing the crisis, including the required hardware and software, staffing, location and layout.

• Stakeholder communications. How do you plan to communicate with customers, shareholders, employees, government and the media?

• Contact lists. Include the “inputs (which media and Internet message boards should be monitored, which opinion leaders should be kept track of, etc.) and “outputs” (which journalists should be contacted, which newspapers and television programs should be approached, which media need to hear your story).

• Template responses. Standardized format, language and protocol for all communications.

• Is this a crisis, or is it simply a continuing business problem coming to the surface?

• Is it confined to a local area, or does it have the potential to become a situation of national or international importance?

• Has someone verified the incident or crisis?

• What are the legal implications?

• What level of resources will be required to manage it?

Access to the crisis plan is essential. Many companies now maintain both print and electronic versions for ease of access and remote retrieval.

Testing the plan

In order to ensure that the messages contained in the crisis plan are delivered effectively and with credibility, and that the plan can be carried out, it needs to be tested. This is where crisis training and simulations come in, as well as media training.

Crisis training is best delivered by outside trainers who take participants through crisis theory and its practical applications to their industry or company. The crisis plan is reviewed and implemented in a simulated crisis to assess the organization’s preparedness, and to identify areas that need improvement.

Crisis Management Team

The common members of the crisis team are public relations, legal, security, operations, finance, and human resources.  However, the composition will vary based on the nature of the crisis. Training is needed so that team members can practice making decisions in a crisis situation while CMP serves only as a rough guide. A key component of crisis team training is spokesperson training.

 

2.    Crisis Event/Response Phase “Plan for the worst; hope for the best”

Assessing a crisis

One of the most vital skills a company can possess is the ability to determine if, when and at what level of importance a crisis has struck. Despite the best planning and foresight, organizations inevitably find themselves in a crisis from time to time. The crisis response is what management does and says after the crisis hits.  Public relations plays a critical role in the crisis response by helping to develop the messages that are sent to various public.  A great deal of research has examined the crisis response.  That research has been divided into two sections:

• The initial crisis response
• Reputation repair and behavioral intentions

Initial Response

The initial crisis response guidelines focus on three points: 

• be quick
• be accurate
• be consistent

Be quick seems rather simple, provide a response in the first hour after the crisis occurs.  That puts a great deal of pressure on crisis managers to have a message ready in a short period of time.  When a crisis occurs, people want to know what happened. Crisis preparation will make it easier for crisis managers to respond quickly. Communicate with employees. Remember that employees are your front-line “ambassadors” in a crisis. Be sure they are aware of what the company is doing to deal with the situation.

Obviously accuracy is important anytime an organization communicates with public. People want accurate information about what happened and how that event might affect them.  Because of the time pressure in a crisis, there is a risk of inaccurate information.  If mistakes are made, they must be corrected. However, inaccuracies make an organization look inconsistent.  Incorrect statements must be corrected making an organization appear to be incompetent.  The philosophy of speaking with one voice in a crisis is a way to maintain accuracy.

The crisis team needs to share information so that different people can still convey a consistent message.  The spokespersons should be briefed on the same information and the key points the organization is trying to convey in the messages. 

Reputation Repair and Behavioral Intentions

Accommodate means that the response focuses more on helping the victims than on addressing organizational concerns.  The master list arranges the reputation repair strategies from the least to the most accommodating reputation repair strategies. It should be noted that reputation repair can be used in the crisis response phase, post-crisis phase, or both.  Not all crises need reputation repair efforts.  Frequently the instructing information and expressions of concern are enough to protect the reputation.  When a strong reputation repair effort is required, that effort will carry over into the post-crisis phase.  Or, crisis managers may feel more comfortable waiting until the post-crisis phase to address reputation concerns.

3.    Post-Crisis Phase

In the post-crisis phase, the organization is returning to business as usual.  The crisis is no longer the focal point of management’s attention but still requires some attention.  As mentioned before, reputation repair may be continued or initiated during this phase. There is important follow-up communication that is required.  First, crisis managers often promise to provide additional information during the crisis phase.  The crisis managers must deliver on those informational promises or risk losing the trust of public wanting the information.  

Second, the organization needs to release updates on the recovery process, corrective actions, and/or investigations of the crisis. 

Companies should consider a broad range of potential communication initiatives to restore trust and loyalty. Public opinion surveys can track changes in attitudes towards a company in the weeks and months after reputation-focused programs are launched.

A formal analysis of what was done right, what was done wrong, what could be done better next time and how to improve various elements of crisis preparedness is another must-do activity for any Crisis Communications team.  

Sources:

W. T. Coombs, 2012. Ongoing Crisis Communication

P. A. Argenti, 2009. Corporate communication

Jonathan Bernstein - The 10 Steps of Crisis Communications

http://bernsteincrisismanagement.com/the-10-steps-of-crisis-communications/

Timothy Coombs - Crisis Management and Communications 

http://www.instituteforpr.org/crisis-management-and-communications/

David Weiner - Crisis communications: managing corporate reputation in the court of public

http://iveybusinessjournal.com/publication/crisis-communications-managing-corporate-reputation-in-the-court-of-public-opinion/

Rick Kelly - What Is Crisis Communications?

https://www.youtube.com/watch?v=XXiVjjGjIFQ