Learning objectives (LO):
1. How to prepare for a crisis?
- Can a company prepare for a crisis?
- Which are the recognizable signs of a crisis?
2. Crisis communication
- What kind of crisises are there? (big vs. small) What are the different levels of crisis?
- How to manage communication (internal and external) during a crisis
3. Effects of the crisis and how to recover from it
- How to hold up the internal and external reputation post crisis
Keywords: external, internal, crisis communication, reputation
LO1: How to prepare for a crisis?
What is a crisis?
- Some breakdown in a system that creates shared stress (R.W. Perry 2007)
- A crisis can create three related threats: (1) public safety, (2) financial loss, and (3) 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. Dilenschneider (2000) - The Corporate Communications Bible
-All crises threaten to tarnish an organization’s reputation. 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.
What is crisis management?
A set of factors designed to combat crisis and to lessen the actual damage inflicted. It seeks to prevent or lessen the negative outcomes of a crisis and thereby protect the organization, stakeholders and industry from harm.
1.1 Can a company prepare for a crisis?
- Crisis management is a challenge in any organization. If it fails the stakeholders and the organization suffer.
- Each organization should be prepared for a crisis. Management in general must recognize the value of strategic crisis communication throughout the crisis management process. Many people think crisis management means having a crisis management plan or responding when a crisis hits. This is a very reactive and rather limited way to approach crisis management. A richer more proactive approach to crisis management explores the entire process.
- SWOT is very important: through crisis management organizations identify their weaknesses and threats and prepare for crises. Strength are the elements of crisis management an organization does well. Opportunities are the resources an organization can acces, before, during and after the crisis. Threats are factors that can evolve into crises => a crisis swot analysis will awaken management => they will see that crisis management and communication is very important
Comprehensive crisis management plan (CCMP)
- Requires integration of knowledge from diverse areas: decision makers, media relations, environmental scanning, risk assessment, crisis communication, crisis plan development, evaluation methods, disaster sociology, reputation management, ...
- CCMP should cover every stage and substage of the crisis management process
Different approaches to crisis management: 3 different models
- Fink (1986) four stage model
- Four stages in the crisis life cycle
1. Prodromal: clues or hints of a potential crisis begin to emerge
2. Crisis breakout or acute: a triggering event occurs along with the attendant damage
3. Chronic: the effects of the crisis linger as efforts to clean up the crisis progress
4. Resolution: there is some clear signal that the crisis is no longer a concert to stakeholders (it is over)
- One of the first to treat a crisis as an extended event => managers have to read the warning signs of a crisis coming => they need to be proactive, not reactive when the crisis hits
- Crisis managers should identify and resolve situations that could become or lead to a crisis
- Fink divides crisis into three stages => as an evolution => different stages require different actions
- Sturge (1994) elaborated on Fink's model => different types of communication during different phases:
- Acute phase => eruption of the crisis => stakeholders require information about how the crisis affects them, what they should do eg. Do we need to evacuate?
- Resolution stage sees the end of the crisis => stakeholders are receptive to reputation building messages
- Mitroff (1994) five stage model
- Divides crisis management into five phases:
1. Signal detection: crisis warning signs should be identified and acted upon to prevent a crisis
2. Probing and prevention: organization members search known crisis risk factors and work to reduce their potential for harm
3. Damage containment: a crisis hits and organization members try to prevent the damage from spreading into uncontaminated parts of the organization or its environment
4. Recovery: organization members work to return to normal business operations as soon as possible
5. learning: organization members review and critique their crisis management efforts thereby adding to the organizations memory
=> Difference between to models => Fink's model implies that crisis can be prevented, Mitrof's model actively identifies them, seeking to prevent them. Also Fink says that a crisis is over when there is a resolution. While Mitroff's model is a cycle. He learns from the faults made and than he goes back to the first step. Crisis management efforts are reviewed and critiqued to find ways to improve the system.
- Basis three-stage model
- No clearly identifiable create but recommended by Birch, Guth, Mitchell, ...
- 1. Precisis or predisaster phase: warning signs appear and people try to eliminate the risk
2. Crisis impact or rescue phase: the crisis hits and support is provided for those involved in it
3. Recovery or demise phase: stakeholder confidence is restored
=> those are the three macrostages that contain different substages
Closer look to the precrisis => how to prepare for a crisis
- Precrisis stage => all actions to be performed before a crisis is encountered, but not all crises can be prevented so organization members must prepare for crisis as well.
- Three substages:
1. Signal detection: crisis managers should be aware of early warning signs, if early action is taken crises can be avoided. Crisis managers must identify sources for warning signs, collect information related to them and analyze the information. Eg. A pattern in customer complaints could identify a product defect. Reporting the complaints to the appropriate manufacturing sector of the organization could result in corrective action beingg taken. That action could prevent further complaints and the potential of highly visible recall, battle with customers., ...
2. Prevention => crisis managers should develop a system for detecting potential crises and respond to them. Once the potential is detected actions must be taken to prevent the crisis. Preventative measures all into three categories: issue management (taking steps to prevent a problem from maturing into a crisis), risk management (eliminates or lowers risk levels) and reputation management (seeks to resolve problems in the stakeholder-organization relationship that could escalate and damage the company's reputation).
3. Crisis preparation => crisis managers should be prepared for a crisis happening => identifying crisis vulnerabilities, creating crisis teams, selecting spokespersons, drafting CMP's, developing crisis portfolio's (list of the most likely crisis to befall an organization) and structuring the crisis communication system.
Source: ongoing crisis communication - Timothy Coombs: https://books.google.be/books?hl=nl&lr=&id=CkkXBAAAQBAJ&oi=fnd&pg=PR1&dq=crisis+communication&ots=NGy94ldi6h&sig=Ojx-cB2UDqqKE5dTXk7497O7-7E#v=onepage&q=crisis%20communication&f=false
What can a company do to prepare for a crisis? - pre-crisis phase
- Prevention: seeking to reduce known risks that could lead to a crisis => part of an organization’s risk management program.
- 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 that is properly trained (to make fast and effective decisions)
- conduct exercises to test the plans and teams at least annually to test the crisis management plan and team
- pre-draft some crisis messages including content for dark web sites and templates for crisis statements. Have the legal department review and pre-approve these messages.
Barton - crisis in organizations II (2001) and Coombs - Code red in the boardroom (2006)
- Crisis Management Plan (CMP)
- A reference tool, not a blueprint. Not a step by step guide how to manage a crisis. It provides lists of key contact information, reminders of what typically should be done in a crisis, and forms to be used to document the crisis response.
- Time can be saved during a crisis by pre-assigning some tasks (crisis team that know what tasks and responsibilities they have during a crisis), pre-collecting information and serving as a reference source
- Crisis Management Team
- Common members of the crisis team: public relations, legal, security, operations, finance, and human resources => composition will vary based on the nature of the crisis. Eg. IT is required if the crisis involves a computer system
- Plans and teams are of little value if they are never tested. Members should practice making decisions in a crisis situation. Each crisis is unique demanding that crisis teams make decisions.
- Spokesperson
- Organizational members must be prepared to talk to the news media during a crisis. Media training should be provided before a crisis hits.
- Pre-draft Messages
- Crisis managers create templates for crisis messages.
- Templates include statements by top management, news releases, and dark web sites. They leave blank spots where key information is inserted once it is known.
- Public relations personnel can help to draft these messages. The legal department can then pre-approve the use of the messages. Time is saved during a crisis as specific information is simply inserted and messages sent and/or made available on a web site.
- Communication Channels
- An organization may create a separate web site for the crisis or designate a section of its current web site for the crisis. Having a crisis website is a best practice for using Internet during a crisis.
- This requires the crisis team to anticipate the types of crises an organization will face and the types of information needed for the web site.
- Eg. Product recall: a crisis web site designed to help people identify if their product is part of the recall and how the recall will be handled. Stakeholders, including the news media, will turn to the Internet during a crisis. Crisis managers should utilize some form of web-based response or risk appearing to be ineffective. A good example is Taco Bell’s E. coli outbreak in 2006. The company was criticized in the media for being slow to place crisis-related information on its web site.
- Not placing information on the web site can be strategic. An organization may not want to publicize the crisis by placing information about it on the web site. This assumes the crisis is very small and that stakeholders are unlikely to hear about it from another source. Be careful because we live in a world where everybody knows everything faster and faster.
- Intranet sites can also be used during a crisis. To inform employees Eg. American Airlines’ uses its Intranet system as an effective way to communicate with its employees following the 9/11 tragedy.
- The communication value of an Intranet site is increased when used in conjunction with mass notification systems designed to reach employees and other key stakeholders. With a mass notification system, contact information (phones numbers, e-mail, etc.) are programmed in prior to a crisis. Contacts can be any group that can be affected by the crisis including employees, customers, and community members living near a facility. Crisis managers can enter short messages into the system then tell the mass notification system who should receive which messages and which channel or channels to use for the delivery. The mass notification system provides a mechanism for people to respond to messages as well. The response feature is critical when crisis managers want to verify that the target has received the message.
Source: http://www.instituteforpr.org/crisis-management-and-communications/
Risk management cycle By Howard Harris, EdD and Mayer Nudell
Source: http://www.speconsult.com/services/planning.html
1.2 Which are the recognizable signs of a crisis?
- Not all crises are “bad”. “Good” things, such as a sudden overwhelming upsurge in sales, can potentially be just as disruptive to your operations and destructive to your reputation.
- Goal: to end the crisis as quickly as possible and return to usual business. How quickly an event is identified as a crisis and the speed with which your crisis response plans are enacted make the critical difference.
One way to recognize a crisis is to ask yourself the following four questions:
1. Is there a good chance that this situation will, if left unattended, escalate in intensity?
2. Might this situation foster unwanted attention by outsiders, such as the news media or some regulatory agency?
3. Is it likely that the situation might interfere with normal business operations in some manner?
4. Could it make your company “look bad” or cause people (the public at large or investors) to lose confidence?
=> answer to any of these questions is yes, you have a crisis unfolding => enact your Crisis Communications Plan.
Source: Crisis Management: Planning for the Inevitable by Steven Fink.
- Seven warning signs of a crisis:
1. Matters that attract unwanted media attention or give rise to a dramatically increased level of activity, attention or commentary on the internet
2. Incidents that involve serious personal injury, death or jeopardize public safety
3. Activities that have or may cause law enforcement or regulatory involvement
4. Matters that result in significant work stoppages or production delays
5. Behavior by managers or employees that reflects badly on your company’s reputation
6. Actions by competitors or others — including rumors — that threaten financial performance or customer or investor confidence
7. Be especially alert to “Smoldering Crises”. Some indicators: dropping share price, sudden sales losses, employee exodus, pending lawsuits, government investigations, negative shift in media portrayals with company portrayed as villain, buzzing grapevine, rumors. Heed these early warnings.
- Smoldering crises => often self-inflicted => consolidations, restructurings => firing employees, facility closures => potentially volatile situations that can and should be properly anticipated. A management failure to plan accordingly, not the event, is what can cause the most damage to your reputation.
- When a company takes drastic action to survive in poor economic conditions, the public is not surprised. Instead, how management communicates its actions is remembered long after the action itself has faded from memory. Loss of control of the situation due to rumors must be avoided, as they lead to a demoralized workforce, edgy customers, nervous shareholders and often, an exaggerated view of the situation.
Source: http://www.mower.com/knowledge/how-to-identify-a-crisis/
LO2: Crisis communication
2.1 What kind of crisises are there? (big vs. small) What are the different levels of crisis?
Basic crisis types by Cooms and Holladay (2002)
- Crisis managers consider how the news media and other stakeholders are defining the crisis. Crisis types based on attributions of crisis responsibility. Basic crisis types and their reputational threat.
- Victim crises: Minimal Crisis Responsibility
- Natural disasters: acts of nature such as tornadoes or earthquakes.
- Rumors: false and damaging information being circulated about you organization.
- Workplace violence: attack by former or current employee on current employees on-site.
- Product Tampering/Malevolence: external agent causes damage to the organization.
- Accident crisis: low crisis responsibility
- Challenges: stakeholder claim that the organization is operating in an inappropriate manner.
- Technical error accidents: equipment or technology failure that cause an industrial accident.
- Technical error product harm: equipment or technology failure that cause a product to be defective or potentially harmful.
- Preventable Crises: Strong Crisis Responsibility
- Human-error accidents: industrial accident caused by human error.
- Human-error product harm: product is defective or potentially harmful because of human error.
- Organizational misdeed: management actions that put stakeholders at risk and/or violate the law.
Source: http://www.instituteforpr.org/crisis-management-and-communications/
3 Levels of crisis... and how to handle them by Andrew Harvey (ex BBC news anchor and now media trainer)
- 1. Major disaster
- Major disaster affecting your organization = big news.
- Can be outside your control => natural disaster or it could be death or injury caused by one of your products.
- Media wants to hear you => most effective crisis response must be quick and it must be open => as soon as the story has broken you must get out there and respond. If you keep quiet while others are talking about the story, the assumption will be that you don’t care or you have something to hide. Being open and honest will show that you truly understand the scale of the problem, that the victims are your first priority and that you are trying to put things right. Do not, under any circumstances, try to “spin” things in a positive light. Show that you are doing everything you can to fix it.
- 2. Poor company performance
- Company performs badly: falling profits, firing staff, closing stores or withdrawing products => media will be interested => be open and honest.
- Employees and customers are affected? => address this first. Talk about it in plain language, not management jargon like “headcount reductions.” => show that you understand the problem and take full responsibility for its human consequences. By doing this first, you are effectively dealing with all the negative questions the media may ask. Once you’ve done this, you are only then in a position to start speaking in positive terms.
- Talk about the steps you are taking to improve the situation and to stop it from happening again. Show that you have learned from what went wrong and that you will now focus on making things better for your company, your employees and your customers.
- 3. Personal error
- You have made a big mistake or you are having to take the blame for your department’s failure. Media’s attention is on you personally. Your instinct may be to deny the problem or to blame someone else to get the focus off you.The more you try to run or hide, the more the media will push you.
- Take responsibility for your own actions. Right approach is honesty. Own up to what has happened and don’t try to downplay it. If you don’t take it seriously enough, then you can be sure the media will…and you will look like the bad guy.
- Say sorry. We’re all human, and you’ll be forgiven far more quickly if you show your human side. Promise to put things right. If you’ve been honest from the beginning, people are more likely to believe you’ll do what you say.
- What to remember in any crisis situation
- Take control. Decide what you are going to do to fix the problem, and communicate your plan clearly and calmly.
Source: http://www.adweek.com/prnewser/3-levels-of-crisis-and-how-to-handle-them/116028
2.2 How to manage communication (internal and external) during a crisis
- I have covered most of this topic in the previous learning objectives but below you can find a few interesting youtube video's that I found about the subject.
Simplifying internal crisis communications by mission mode
Source: https://www.youtube.com/watch?v=WjBOoGpHan0
Bijhorende slideshare presentatie
Source: http://www.slideshare.net/missionmode/simplifying-internal-crisis-communications?qid=4d73f694-c322-41db-80d8-082d750c15e1&v=qf1&b=&from_search=3
Interesting image from Ogilvy PR international
This image show how quickly we have to respond as a company and which channels we have to monitor.
Source: http://www.businessinsider.com/pr-disasters-crisis-management-2011-5?op=1&IR=T
3.1 How to hold up the internal and external reputation post crisis
- Post-crisis phase => returning to business as usual.
- Crisis is no longer the focal point of management’s attention but still requires some attention. Follow-up communication important to repair reputation.
1. 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 publics wanting the information.
2. Keep stakeholders updated on the progression of recovery efforts including any corrective measures being taken and the progress of investigations.
- Amount of follow-up communication required depends on the amount of information promised during the crisis and the length of time it takes to complete the recovery process. If you promised a reporter a damage estimate, for example, be sure to deliver that estimate when it is ready. Eg. West Pharmaceuticals provided recovery updates for over a year because that is how long it took to build a new facility to replace the one destroyed in an explosion.
- Intranets are an excellent way to keep employees updated, mass notification systems can be used as well to deliver update messages to employees and other publics via phones, text messages, voice messages, and e-mail. Personal e-mails and phone calls can be used too.
- A crisis should be a learning experience => crisis management effort needs to be evaluated to see what is working and what needs improvement. The organization should seek ways to improve prevention, preparation, and/or the response.
Source: http://www.instituteforpr.org/crisis-management-and-communications/
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