By Katrina Olson
No business owner or CEO expects a crisis to occur. But what constitutes a crisis? Certainly a faulty product that leads to injury or death is a crisis. An inappropriate tweet or suspicion of financial wrongdoing can also negatively impact a company’s reputation and ultimately its bottom line. And these types of crises are becoming more common as companies become more active on social media. The fact is that history books are rife with examples of mishandled crises that have led to many of today’s best practices in crisis management. Shining examples, however, are harder to find—because they were handled so well that the broader public often never hears about them.
One of the best examples to date is JetBlue Airways’s actions following a weeklong shutdown due to an East Coast ice storm in 2007. About 1,000 flights were canceled and thousands of customers were left stranded in airports. At the height of the crisis, nine airplanes full of angry passengers sat for six or more hours on the tarmac at JFK Airport in New York.
JetBlue Founder and CEO David Neeleman took responsibility for the problem, blaming his company’s weak management and insufficient communication and reservation systems. He appeared on several high-profile TV news programs, wrote a public letter apologizing to JetBlue customers, introduced a customer’s bill of rights, and financially compensated stranded fliers.
Most companies will never face a serious crisis like this, but every business owner, CEO, and PR professional should have at least a working knowledge of crisis communication.
Preparing for a Crisis
Careful preparation can reduce the life-span of a crisis, minimize losses, and protect a company’s reputation.
Monitor the media, both traditional and social. Careful monitoring can serve as an early warning system of a problem. By monitoring what the media, customers, competitors, and others are saying about the company, a crisis may be prevented.
Plan ahead. Why bother having a crisis plan? Because companies with crisis plans can minimize losses. Similar to a business, marketing, or PR plan, a crisis plan requires considerable time and thought. So it’s important to have a specific and actionable crisis communications response plan in place before it’s needed. This plan must consider potential crises, their impact, and possible responses; it also involves knowing the company’s audience, setting goals and objectives, establishing communication procedures, selecting both traditional and digital media, and crafting messages.
A good plan will also designate a specific spokesperson; list subject matter experts (both internal and external) who can assist in managing a crisis; outline procedures for controlling information flow; and include a current media list, a list of stakeholders, and a list of the company’s social media accounts and passwords.
Assemble a crisis team. If the worst happens, is there legal counsel in place? If computer files or digital resources are compromised, what firm would be called to help? If questionable accounting processes are uncovered, is there an external auditor to contact? And what about crisis communications? Does the company have the resources and expertise to effectively manage the communication process and craft appropriate messages?
A well-rounded crisis team may include experts in accounting, finance, investor relations, government relations, PR, crisis communications, law, digital communications, and human resources, as well as an executive team. Ideally, the crisis team will also help develop an effective crisis communications plan.
When the Worst Happens
Of course, simply having a crisis communication plan doesn’t mean the work is done. Should a crisis occur, the work is just beginning.
Call in the reinforcements. Depending on the nature of the crisis, it may be necessary to call in experts for advice. For example, an article in Bloomberg Businessweek confirmed that in the Target credit card breach of 2013, the company’s computer security firm flagged the presence of malware on Nov. 30 and Dec. 2, 2013—10 days before federal investigators warned Target of the massive data breach. Five days after the investigators’ warning, on Dec. 15, Target confirmed and eliminated the malware, but not before 40 million credit card numbers had been stolen.
If Target’s security team had responded to the earliest alerts, it could have intervened and prevented the loss of customers’ data. Even if Target didn’t have the expertise to deal with the threat, it could have certainly consulted with its security firm or hired specialists to address the issue.
Of course, an internal or external PR professional should also be consulted at the first sign of trouble to manage communications with the company’s various internal and external publics including employees, company executives, customers, vendors, suppliers, stockholders, regulators, and any other groups who will be affected by the issue at hand.
Assess the situation and define the magnitude of the problem. How big is the problem? Can it be handled by communicating with those directly affected, or should it be addressed publicly? How will the issue affect the company’s bottom line? Is it a short-term or a long-term problem? Answers to these questions will determine the nature and magnitude of the response.
For example, assume the problem affects only a handful of customers. By dealing with those customers directly and honestly, negative publicity may be reduced. However, if the problem is widespread, it’s best to address it publicly.
Look at it from the customers’ perspective. While it’s important in a crisis to deal with the situation at hand, customers can’t be ignored. Often, it’s as simple as thanking them for their past business, explaining the issue, and telling them how important they are to the business. They should also be told what is being done to fix the situation.
Respond immediately and transparently. Twenty years ago, companies could wait one to three days to respond publicly to a crisis. With the widespread use of social media, that response time has been reduced to hours, if not minutes. Take control of the information flow by telling what is known, when it is known. Don’t wait to get all the facts; inaccuracies can be corrected later. By telling the company’s side of the story first, the story can be framed in its best possible light.
Craft a message to mitigate the situation. Remember in 2009 when a photo surfaced of Olympic swimmer Michael Phelps inhaling from a marijuana pipe? No? Then join the crowd: Most people don’t remember because the crisis was handled swiftly and honestly. The day after the photo of Phelps was published, he issued the following statement: “I engaged in behavior that was regrettable and demonstrated bad judgment. I’m 23 years old and despite the successes I’ve had in the pool, I acted in a youthful and inappropriate way, not in a manner people have come to expect from me. For this, I am sorry. I promise my fans and the public it will not happen again.”
Phelps was suspended from competing for three months by U.S. swimming officials and lost an endorsement deal with Kellogg’s, but overall, the negative impact on his image and income was relatively minimal. (On Sept. 30 Phelps was arrested in Maryland on a DUI charge. As this is his second DUI since 2004, his public and sponsors may be less forgiving.)
Much like Phelps’s statement above, an appropriate and effective response should address most or all of the following: Admit what happened, acknowledge that it was wrong, apologize for the mistake (if appropriate), express concern for those affected, explain why it happened (don’t defend or argue), share what is being done to prevent it from happening again, and reiterate concern for those affected and apologize again.
Distribute this message using all available communication channels: mass media; speaking directly to publics through the company website; email; and social media platforms such as Facebook, Twitter, and YouTube.
Corporate attorneys may recommend not responding at all or responding by saying, “No comment.” While this seems like sound legal advice, it’s not necessarily good PR advice as it’s often interpreted as an admission of guilt.
Designate a qualified spokesperson. Ideally, one person should speak on behalf of the organization. If the owner, president, or CEO is charismatic, well spoken, trustworthy, and believable, he or she should be the spokesperson. However, if this isn’t the case, consider another high-level executive or a PR professional. If the crisis involves a highly technical issue and the CEO isn’t qualified or informed enough to speak authoritatively, consider making the chief information officer the spokesperson.
Organizations with several locations throughout the country or the world may need several spokespeople. This is a viable option, as long as all spokespeople are in constant contact and their messages consistently represent the company.
Keep internal publics informed. Employees, stockholders, etc., should be kept informed as often and as thoroughly as customers and the media. For better or worse, employees are often de facto spokespeople. Their friends, relatives, and neighbors will ask them about the crisis, so be sure to prepare them with the official message.
Back the apology or official statement with real action. To mitigate the effects of a crisis, it’s often necessary to make real changes in the way the company does business. For example, in the early 1990s, Denny’s restaurant was the subject of several lawsuits claiming racial discrimination.
In addition to paying $54 million in court-ordered restitution, Denny’s voluntarily formed relationships with the NAACP, eliminated its prepayment policy, implemented a diversity training program for all employees, and established a toll-free number for those who experienced discrimination at a Denny’s restaurant. Denny’s also introduced special loan programs to increase minority ownership of Denny’s franchises.
Do the right thing. Contrary to what’s portrayed in movies and TV shows, the role of PR is not to cover up wrongdoing or spin the truth. PR professionals are often the conscience of the organization, encouraging lawsuit-wary executives to tell as much of the truth as possible, as soon as possible, and to take the corrective action necessary to prevent future problems.
Katrina Olson is a strategic communications consultant and freelance writer. Reach her at email@example.com.Tagged with tED