Crisis management

A good crisis never discriminates

januari 31st, 2017 Posted by communication, leadership, management No Comment yet

This means that every company will deal with crises in their lifetime. Dealing with these crises effectively as a company requires both organisation and preparation. Crisis management done off-the-cuff is highly damaging. When properly prepared, your crisis team will guide your company through the crisis in the best possible way.

We wrote about reaction strategies to issues in the umfeld of organisations last week, focussed on tackling trends before they evolve. But what if your strategy didn’t have the desired result? What if you failed to respond on time or what if you are taken by complete surprise? It may and will happen to every single one of us.

Crisis management

The definition of a crisis in a business context is:

An event or situation that is directly threatening to a company, its people, property or its immediate surroundings and needs to be handled in an appropriate and timely manner for it will severely interrupt business otherwise.

A well-calculated process precedes good management during crises. For instance, an important condition for effective communication in times of crises is having a strong network in place that enables you to reach both your internal and external stakeholders and interest groups in a timely manner. The importance of this network is based on the existing relation between the possible reputational damage, the strategy’s chance of success and the time needed to spread your message. To state the obvious, the longer it takes you to reach your target audiences, the more damage a crisis will usually cause.

The terms and conditions for managing your crisis effectively  

A multidisciplinary crisis team

As is only natural, a crisis team is required. The profiles of this team can solely consist out of professionals within the domain of communication but we would advise against it. By bringing experts together with varied backgrounds, you will diminish the risk of tunnel vision and unrealistic concept development. Communication, Legal, Public Relations, Finance, HR and Operations are usually the departments that have the expertise needed to tackle a crisis. Their combined knowledge will enable them to take quick and well-founded measures. These multidisciplinary teams are ideally led by the CEO of the company, reducing the organisational layers a team has to go through when preventive measures need to be taken.

It is up to the crisis team to decide which approach to take and to create the much-needed support amongst the key influencers within the company and amongst external influencers (it must be said that creating support is, in fact, a continuous process that requires continuity). While some of the team members should be skilled networkers, other team members need to have a highly developed sense of empathy and compassion. These skills will help them guide other employees and team members successfully during crises.

The crisis team won’t have an absolute monopoly on wisdom. Therefore, they will require access to specialised knowledge. It is important to draw up a list with specific experts which advice can be requested quickly in times of need ( when a company gets hacked, the crisis team will need an IT-expert. When a natural disaster occurs, having a Risk Manager under speed dial will be of an immense value). These specialists can be assigned to the crisis team on a temporary basis if the team requests. It is important to note that these specialists should never be selected based on their ranks within the company but are always purely selected based on their profound knowledge.

The power of repetition

A crisis team is not (like the name would suspect) supposed to be a team that only takes action when the cat is out of the bag. By meeting each other at regular intervals, team members will learn to play each other’s strengths and cover each other’s weaknesses. This will thus lead to more rapid interventions. Secondly, the team will help the company with strengthening their issue management by exchanging their perspective on issues and by mapping possible threats to the company. Thirdly, good preparation accounts for half the work: your team will construct scenarios per potential crisis and those will ensure quick response processes in times of real crises, resulting in much lesser damage. Another important benefit of creating scenarios is that team members aren’t under the extreme pressure they would be under during crises. This enables them to develop possible reaction strategies more objectively and to revise them regularly.

Vulnerability Audits

We touched upon this point before, auditing to discover where the ‘risks’ are and determining which risks are acceptable and which are not are risk mitigation measures. These audits are focussed on the umfeld of the company, the instrumentation a company has at its disposal during times of crises and their functioning.

In order to recognise and categorise risks, several models are available that will provide support and will also guide your strategy. The starting point of an audit is discussing possible areas at risk with employees (these conversations would be entirely confidential) and the team (but not limited to):

External forces that can simply occur:

  • Environmental factors like natural catastrophes;
  • Political factors like wars, coups and riots;
  • Financial factors like the devaluation of a currency or bankruptcy of a trusted supplier.

External forces that are created intentionally by an actor in order to damage a company:

  • Crises caused by rumours spread by suppliers or former employees;
  • Financial factors like hostile take-overs or dumping shares causing the share price to plummet;
  • Political factors in which a company is banned or excluded due to their dominant position within a country or region.

Internal forces that create crises without intent:

  • Unethical behaviour like fraud or briberies caused by employees;
  • Financial factors like declining turnover or loss of an important client;
  • Technological factors like a platform that fails to function after an update;
  • Disruptive behaviour like physical or sexual abuse of an employee.

Internal forces that are created intentionally despite the potential risks involved:

  • Mismanagement, when unethical decisions are made by management intentionally;
  • Disruptive behaviour, like physical abuse or creating a culture resulting in extreme pressure to deliver results;
  • Crises that occur based on rumours which are spread intentionally by employees resulting in reputational damage.

Reaction plans

After the landscape of risks has been assessed, the crisis teams’ next job is to link reaction strategies to that landscape. This should result in a reaction plan per potential crisis. Based on the evaluation the team did during the vulnerability audit, the team will decide which course of action will be most fitting for each crisis individually.

There are six general reaction strategies a company can pursue in times of crises:

  • The strategy of denial: meaning you could simply deny the existence of a crisis or give out a more extensive statement in which you explain why the events shouldn’t be seen as a crisis per se. There is also the option to “attack” groups that accused your company of being in crisis by confronting them with irrefutable arguments or by taking (or threatening with) legal action.
  • Distancing strategy: you would acknowledge the existence of a crisis but persuade stakeholders and interest groups that this crisis is meaningless or small. The other option within this reaction strategy is that you would put the blame on others and therewith reject any responsibility yourself.
  • Decoy strategy: averting attention by focussing on (past or current) positive traits of the company or by refocussing on the higher purpose of the company (ideology from a social perspective). The goal is to create a more positive balance within the news and to reduce any negative sentiment.
  • Victim strategy: portraying the company as a victim of certain circumstances in order to trigger sympathy amongst the public.
  • Acceptance strategy: you acknowledge your responsibility for the crisis to the desired extent. This varies from offering your apologies or offering compensation to people who were affected by the crisis up to falling on your knees and begging for forgiveness.
  • Adjustment strategy: changing operations or policies in order to prevent similar crises from happening in the future and communicating these actions with the public.

It should be rather easy to distance yourself from a crisis when the crisis itself is caused by external factors as long as these strategies are also in accordance with the public opinion and/or the opinion of stakeholders. Rejecting ownership or denying the existence of a crisis in the first place are other possibilities when crises, caused by external forces, occur. Obviously though, when the general belief is that a company has a certain responsibility within that domain, these distancing strategies aren’t going to present a viable solution.

Modular action blocks

Additional actions are to be taken in most crises and one should keep in mind that crises don’t generally follow the rules we bestow on them. That is why every organisation should be able to draw elements from other constructed scenario’s, thereby creating the need for modularly constructed action plans. This need translates into action blocks, where every action is divided and described in a separate step-by-step plan. For example, you would write an action block about the steps that need to be taken when a plant is to be closed down, another for the evacuation of the plant and another for stakeholder communications regarding the proceedings during the crisis.

In order to keep matters neat, companies can use flow charts that will show employees which modules will be set into action and in which sequence these modules should be continued. Do not only describe the phases from ‘operation as usual’ to a crisis but also describe how the company should return to ‘business as usual’.

Trained professionals

By organising simulations with regular intervals, companies ensure themselves that all employees will be aware of the steps they need to go through when a crisis presents itself. This is extremely important, employees often lose the ability to act rationally when in crisis. Secondly, any additional time needed to determine the course of action will be a waste of valuable time and because of that, lead to even more damage. By organising simulations you will strengthen the chances of success and at the same time, signal and eliminate the weak spots within each module. The following evaluative list can be used to serve this very purpose:

Checklist for crisis managers

Other questions to include (amongst others) in your checklist are:

  • Crisis team: are your team members and spokespersons properly trained to interact with media and stakeholders?
  • Crisis planning: do we have a flow chart for each scenario?
  • Crisis organisation: have we set up a crisis centre and do we have a fall-out base in case it is needed?
  • Crisis organisation: do we have the proper communication channels set in place and do we have the needed facilities to manage a crisis?
  • Crisis evaluation and control: do we monitor our umfeld?
  • Crisis evaluation: do we review our action plans and scenario’s on an annual basis?

Both senior management and spokespersons need to be trained on a regular basis. It requires vast amounts of training to handle the press, interest groups and stakeholders correctly in times of crises. Crisis communication is an entirely different discipline than PR and different skills are needed (communicating proactively versus reactively). Which means that a very talented and skilled PR-specialist can still fail when communicating in crises. Amongst others because small differences, nuances even, can lead to enormous differences in perception amongst the public and stakeholders. These subjects are often emotionally charged and these conversations are much more fickle.

For each purpose and even for each channel, the company should decide who would be the most capable person for representing the company adequately and at the same time bring the company’s message across successfully.

Systems to monitor reactions and sentiment within the public domain

It is almost self-evident these days: monitoring and analysing what is being said about your brand(s) on social media, near the coffee machine, in newspapers and magazines and by other influencers. Monitoring associations with your brand amongst the public is not only a way to prevent crises but can also help altering reaction strategies when the public doesn’t respond as planned or hoped. The company needs to determine who will be responsible for this task, who will analyse the findings and who will determine their relevance.

Basic statements

You can do the preliminary works on some parts of your reaction plan. This goes for your initial statement, the first reaction you will give out when a crisis occurs. An initial statement will win you some time to set plans in motion and to analyse the situation. Your initial statement can’t be anything more than a basic reaction because most facts will still be unknown at that time. Don’t worry, the media is aware of this fact and is used to wait for a more substantive response at a later stage. Your initial statement could be something down the line like:

On XX XX, we learned that our last shipment contained a series of defect products which meant that our suppliers were unable to deliver the product to the end customer as expected. Primary research indicates that these defects were caused by a heavy storm at sea during the transfer of our products. We are currently researching how we can prevent such situations from happening in the future with our transport partners. We are also contacting all of our affected suppliers to make sure we will be able to meet the demands of their customers as soon as possible.

Besides your initial statement to the press, informing your clients is a top priority. Draft a statement for them and give this statement a more personal tone-of-voice. Do keep in mind that such statements can always be leaked to the press, therefore, the contents should remain to be press appropriate.

A crisis centre

There will be a lot of debate, conferences and other forms of communication during crises. That is why having a crisis centre with facilities already set in place is such an asset. In these centres, contacting interest groups is a central objective. Your crisis team will need a variety of communication options at their disposal. Consider a crisis line via the telephone for alarmed stakeholders, a social media centre in order to respond to the online public and to monitor sentiment, a conference room for meetings and a press room in order to brief the media away from all the turmoil.

Preparation is half the work

Anyone can get hit by a crisis. Grey hear, pit stains and a raising heartbeat will have their effect on you while you try to control the damage a crisis does. You can reduce the stress levels of most people involved in making sure everyone is prepared to deal with a crisis. Preparation will also keep your crisis team focussed, which will lower the risk of actually having to deal with crises in the first place.

In the end, a good preparation can make the difference between defeat and conquer. The question is: what side will you be on when the crisis hits?

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Maike
Marketing and Communication Specialist at TAS - Tells a Story
Maike van Oyen is a mother, friend, sister, daughter and dedicated communications and marketing specialist on the side. She has written many articles for several websites in both Dutch and English about Corporate Communications, Marketing, Change Management and HR.

Maike loves to sink her teeth into complex projects of change and has a good knowledge of communication on a strategical, tactical and an operational level. She is trained to work in hectic environments (she manages to write blogs while also doing the housework, watching 4 misguided missiles and working for TAS at the same time). And is used to finding creative solutions for every challenge.
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