Alf's Articles

Handling A Crisis Could Make Or Break You

by Alf Nucifora

The recent catastrophes that have befallen a number of America's leading-citizen companies, such as Firestone and Arthur Andersen, very clearly point to the need for crisis planning if a business wants to preserve its reputation and insure its continued operation.

What Constitutes A Crisis?

There is a significant difference between a business crisis and a business emergency. A crisis is an emergency that gets carried to a wide audience with or without the media fanning the flames. And, it should be treated with the same degree of care and trepidation as one would apply to an Anthrax scare or a nuclear meltdown. It's not a question of good or bad; it's the difference between bad and worse.

An acknowledged expert on the subject is Andrew Gilman, President of the New York-based CommCore Consulting Group, advisors on crisis management, message development and effective representation. Gilman, an ex-trade reporter and correspondent for National Public Radio, witnessed crisis management at its best when he coached Jim Burke, the then CEO of Johnson & Johnson, who was the company helmsman during first Tylenol scare. Crisis management professionals still point to this case as the best practice in the field.

Crises can take a variety of forms. According to Gilman, the more common occurrences fall within clearly-defined categories:

Product: Bad press, recalls
Personnel: Labor conflict, racial/sexual suits
Financial: Sales failure, theft
Natural Disasters: Floods, earthquakes
Legal: Litigation, regulatory action
Violence: Terrorism, sabotage, kidnapping, workplace
Accidents: Employee, customer, executives

It's A Logical Process

Gilman suggests that crisis management is a clearly-defined process that serves the purpose of preparing the company for the unexpected and mitigating risks once the unexpected actually happens. The implementation sequence looks like this:

• Gain buy-in from senior management on the need to complete the crisis plan.
• Undertake appropriate interviews and fact-finding for development of the plan.
  
• Gain agreement on additional inputs and key elements.
  
• Develop a crisis database of updated contacts (media, political, employees).
  
• Agree on appropriate reporting channels during the crisis.
  
• Compile a resource directory, e.g., handbook or intranet delivery.
  
• Conduct drills/simulations.
  
• Appoint and equip a communications team for the crisis.
  
• Prepare the corporate website for crisis response.

Gilman notes that there are three stages to the management of a crisis. The "Before" stage, which focuses on readiness, calls for the homework being done…anticipation, diagnosis, development of the plan, and training. The "During" stage is consumed with getting back to normal as quickly as possible and calls for intensive coordination, communication, reaction, and monitoring. The "After" stage addresses damage assessment and future prevention, and involves anticipation, continued communication, analysis, learning from the mistakes and refocus.

Gilman emphasizes the utility and power of the corporate website to disseminate information very quickly. In crisis situations, management cannot afford to wait for media deadlines or let media define the rules of play. He recommends blank pages on an existing website where fresh material and quick updates can be quickly inserted. Alaska Airlines used this protocol very effectively during its most recent crisis. The website can also be used for the ongoing dissemination of information to the public long after the press has lost interest and the subject has turned cold.

Media Do's And Don'ts

Most corporate management fears the media and, yet, professional courtesy and respect can quite often help generate favorable treatment from the fourth estate. Again, Gilman prescribes a very explicit course of action:

• Show concern.
• Stay calm and courteous at all times.
• Set up a central communications center.
  
• Be a listener…ask questions of the media.
  
• Use your website.
  
• Monitor news coverage.
  
• Use layman's terminology.
  
• Communicate with employees directly.
  
• Never say, "No comment."
  
• Avoid using or repeating "negatives."
  
• Don't speculate…never say more than you know or can confirm.
  
• Don't discuss cause or fault.
  
• Don't allow interviews in emergency or crisis areas.
  
• Remember that media lives for a crisis. They will want to keep it going. Try to make it a one-day story.

Food For Thought

The vast majority of companies choose to ignore the subject. It's a combination of wishful thinking, "it can't happen to me" and/or playing second fiddle to more important priorities. Unquestionably, recent crises, particularly those caused by the 9/11 tragedy, have forced corporate management and business owners to confront the issue. Smart management will be proactive not reactive on the subject. It demands forward thinking and investment. As Gilman notes, "There can be a 100-year flood or an earthquake." Avoid the mirror principle, i.e., it can't happen to me. Therefore, review current plans, documents and procedures, even insurance policies and existing file and data backup systems. Actually, ask yourself a question, "What could constitute a crisis for my company?" The simple process of posing the question may unearth a need… that gains attention… that generates a plan… that saves the company, down the road.

If your company ever suffers the misfortune of experiencing a crisis, always show concern for those affected, including staff and customers. This was a lesson that neither Union Carbide nor Exxon were able to grasp during the infamous tragedies that occurred on their watch. Notes Gilman, "Don't let the lawyers prevent this from happening. After all, there is a difference between blame and sorrow." And, finally, there is the issue of communication. Do it freely and do it often to those affected, including employees, stockholders and customers. Be willing to spend the money on advertising, direct response, website, notice boards, etc…whatever it takes.