Ron Smith's Teaching Notes on ...

Crisis Communication

Problems are irritating annoyances that are commonplace in all organizations. Problems often focus on individual and on interpersonal conflict. Don't confuse problems with crises, which are full-blown interruptions in an organization's routine that can negatively and severely impact its success and its reputation.

Updated Summer 2011 as a supplement to Prof. Smith's textbooks,
Strategic Planning for Public Relations and Becoming a Public Relations Writer, (Routledge/Taylor and Francis).

A crisis is ...
... a major, negative, public, sudden, and unpredicted event
that can seriously disrupt an organization's activity
and potentially hurt its "bottom line" or mission

Because a crisis occurs in a public environment, even private businesses and nonprofit organizations cannot shield themselves from the expectation of being accountable. By its nature, a crisis invites outside scrutiny and jeopardizes the organization's reputation.

An organization may find itself either in the role of either culprit or victim in a crisis situation. Regardless of the cause, if a crisis is handled properly, it offers the organization with an opportunity to create a positive impression on its key publics.

 


Types of Crises

Disaster (Violent)
Natural occurrence such as earthquake, flood, etc.
Immediate damage

Disaster (Nonviolent)
Natural occurrence such as drought, epidemic, etc.
Delayed damage

Accident (Violent)
Mishap involving people or equipment
Immediate damage

Legal/Ethical Failing (Nonviolent)
Unfortunate personal action violating legal/ethical/moral standard
Immediate or delayed damage

Mismanagement (Nonviolent)
Bad professional judgment impacting on an organization's operations and procedures
Immediate or delayed damage

Opposition (Violent)
Negative impact by outside forces, including product tampering, terrorism, etc.
Immediate damage

Opposition (Nonviolent)
Negative impact by outside forces, including competition, erosion of public trust, protests, recalls, lawsuits, new regulations, etc.
Delayed damage

 

Another way of categorizing crises is sudden v/ smoldering.
Sudden crises
burst upon the scene without warning. But this is seldom the case.
Smoldering crises
are much more common.

Case 1. Consider Hurricane Katrina in 2005 and the tragedy in New Orleans. The devastation was sudden in the sense of the details of the storm. But for years, there had been warning of potential weaknesses in the levies, inadequacy of evacuation plans, flaws in the emergency communication systems, and politicization of the Federal Emergency Management Agency. Three years later when Hurricane Gustav hit the same area, some of the levies had been improved, evacuation plans were in place, the communication system had been shored up and FEMA operated more effectively.

Case 2. Consider any number of accidents, from radiation leaks in nuclear power plants to coal mine cave-ins, from bridge collapses to sinking ships. The headlines frequently tell of unexpected accidents that ultimately turn out to have been anticipated, with warning unheeded. Collapsed bridges have inadequate inspection records. Crashed airplanes have maintenance records that were ignored. Often it is human error, sometimes outright mismanagement, that is a contributor to an accident.

Lesson to be learned: Even natural disasters and accidents often have a trail of clues and predictions that were unheeded. The crisis smoldered long before it burst forth. During the smoldering period, if the organization had implemented a program of monitoring the internal and external environments, steps could have been taken to prevent or significantly minimize the eventual damage.

 


Stages of Crisis Management

Pre-Crisis (Prodromal Stage, earliest symptoms)
Anticipation & Prevention

· Crisis Forecasting (worst-case scenario)

· Vulnerability Audit (warning signs)

· Crisis Planning, w/ message & messenger

· Media Training

 

Crisis (Acute Stage)

Effective Response

· Containment

· Involvement of regulators & outside authorities

· Investigation

· Confirmation

 

Continuing Crisis (Chronic Stage)
Management
· Ongoing containment

 

Post-Crisis (Resolution Stage)

Recovery

· Return to normal

· Assessment

· Preventative Planning

 


Crisis and Reputation

A crisis shows what an organization is made of, by making visible under adverse situations its values, priorities and commitments.
It brings out the best ... or the worst.

Reputation is the external and public perception of an organization's values, principles, quality and practices. It is the sum of the organization's intentional or unintentional presentations through visual, verbal and behavioral means. Reputation is the most important element of crisis communication because it is so valuable to an organization with impact on its consumers, donors/investors, suppliers, employees, etc. Reputation takes years to build up, but poor handling in a crisis situation can destroy it overnight. Link to Teaching Notes on Reputation.

Self-perception is the reality that an organization knows about its values, principles, quality and practices. This may compare favorably or unfaborably with its reputation. The extent to which reputation and self-perception are out of harmony constitute a public relations problem, either because the reality is better than the perception, or because it is worse. Either way, adjustments are needed.

Visibility is the extent to which an organization is seen and known by its publics and what the publics know about its values, principles, quality, and practices. Problems of visibility may be misdiagnosed as problems of reputation.

- A strategic plan for public relations and marketing communication seeks to build and maintain an organization's reputation.
- A
crisis plan seeks to defend that reputation in adverse situations.

 


Crisis Planning & Reputation Management

Crisis management is both a proactive and reactive process of planning strategically to anticipate crises and to handle them effectively at each stage: detection, prevention or preparation, response, and recovery.

Issues Management
Part of the on-going public relations research program of any organization is the anticipation of important issues and problems – internal or external – before they burst onto the scene. This allows an organization to prevent problems or minimize their impact by being prepared to deal with them.

Crisis Management Team
Every organization should identify a small group of senior and strategic managers to serve as a Crisis Management Team. This group should initiate and supervise issues management, develop a crisis plan, see that appropriate training and resourcing is available, and continually press the issue of crisis preparedness and management.

Crisis Plan
Every organization should have an up-to-date crisis plan to anticipate problems, identify and provide resources to Crisis Management Team, and prepared to handle crises as they occur. For this to be effective, it must be tailored to the specific needs of an organization.

Worse-Case Scenario Drills
Organizational leaders and/or public relations managers should regularly consider what could go wrong (plausible crisis), how the organization would deal with such a crisis, how severe its impact might be, and how it might have been prevented.

Training of Spokesperson
One task of public relations is to provide training for organizational leaders in how to handle themselves in their role as spokespersons in situations such as media interviews, news conferences, consumer meetings, stockholder meetings, and other public presentations. This often is a task for an outside consultant/trainer experienced in three areas: journalism, public relations and training.

 


Principles for Crisis Communication

Crises are inevitable with every organization. You can minimize their occurrence, but you can't prevent them entirely. Rather, you try to exercise control in the way you manage the crisis, impacting on whether the outcome is positive or negative. Here are several principles for crisis communication.

Principle of Existing Relationships
In crisis, communicate with employees, volunteers, stockholders, donors, and other constituent groups, as well as with colleagues. Minimally, keep them informed, because their continued support will be important in your rebuilding process following the crisis. Ideally, use them during the crisis to communicate credibly and effectively.

Principle of Media-as-Ally
In crisis situations, organizations are best advised to treat the news media as allies that provide opportunities for the organization to communicate with its key publics and constituents. In situations in which the media are intrusive and/or hostile to the organization, this often is because the organization has not been forthcoming in providing legitimate information to the media and its other publics. A good existing program of media relations and a positive reputation can minimize media hostility.

Principle of Reputational Priority
Your top priority after safety issues is to shore up your own reputation. Remembering this can help you focus on doing what's best for your customers, employees, and other key publics. Set objectives that deal with maintaining (or if necessary, restoring) your credibility. Use the crisis as an opportunity to enhance your reputation for social responsibility with your various publics

Principle of Quick Response
Become accessible to your publics as quickly as possible. The one-hour rule applies here: Within one hour of learning about a crisis, the organization should have its first message available to its publics, particular the media, which generally is the most significant public in the early stages of a crisis.

Principle of One Voice
A single spokesperson should be designated to represent the organization to the media. If multiple spokespersons are needed, each should be aware of what the others are saying, and all should work from the same set of facts and the same (or at least a coordinated) message.

Principle of Disclosure
Silence is not an acceptable response during a crisis. On the other hand, full disclosure may not be strategically warranted or legally possible. Disclosure is not an all-or-nothing situation. The approach to disclosure should be made on the presumption that everything the organization knows should be available to the public, subject to specific justification for not releasing certain information. Without admitting fault, the organization should provide as much information as possible, particularly to safeguard public welfare or minimize additional damage.

Principle of Message Framing
Framing the message (or managing the agenda) means that the organization maintains some level of control
over the way the unfolding story is told. This can be accomplished by seizing an opportunity, in the early hours of a crisis, by being accessible and providing information that sets the tone for subsequent reporting. The premise is that, if the organization does not tell its own story, its story will be told by others, by people who probably have less knowledge of the facts and certainly less knowledge of the organization itself. Link to Teaching Notes on Framing.

 


Crisis Objectives

During a crisis, organizations seldom have time to develop detailed strategies. However, the following objectives should be kept in mind during any crisis situation.

Maintain (or restore) credibility
- with the media
- with employees and volunteers
- with investors and donors
- with government and professional authorities

Maintain (or restore) your reliability
- with consumers

Maintain (or restore) your reputation for social responsibility
- with employees
- with volunteers
- with the wider community

 


Lessons Learned from Past Crises

4 Tylenol (Johnson & Johnson, 1982)

Cause: 7 Chicago residents died & 250 got sick after ingesting cyanide-laced Tylenol capsules, which has been tampered with on the store shelves

Immediate Response: J&J warned consumers not to use product; recalled 31 million bottles (value $100 million); worked closely with FDA & FBI; immediate stock loss of $1 billion

Follow-up: J&J offered consumer incentives such as free replacements & coupons; toll-free info hotline, full-page newspaper ads, many media interviews; communicated with physicians/employees/consumer groups/government; repackaged & reintroduced product.

Outcome: Within a few months regained market share of 35%, surpassed own sales forecasts by 50%; earned public sympathy, set new industry standards for consumer safety; value of good reputation

Public Relations Lessons: Quick action; proactive & transparent communication; action rather than excuses; priority of consumer over profits

 

8 Exxon Valdez (Exxon Oil Company, 1989)

Cause: 11 million gallons of oil spilled into Prince William Sound, Alaska; calm seas; captain drunk/resting; uncertified 3rd mate at helm; dead animals included 500,000 birds (150 bald eagles), 4,500 sea otters, 14 killer whales; toll on fishing & tourism

Immediate Response: Low-profile company suspicious of media; lower-ranking executives sent to Alaska; CEO uncomfortable with public role, first public comment after 6 days, not on site for 3 weeks; no designated spokesperson; blamed media for making big deal; stock dropped $3 billion; newspaper apology ads 10 days later; no outside PR counsel; ignored public criticism; dismissed environmental interests; on legal advice, refused to acknowledge extent of problem; two-week delay before cleanup; refused cleanup assistance of local residents; fear appeal (predict increase in gas prices because of cleanup); shifted blame (accused Coast Guard & Alaskan officials of delaying cleanup)

Costs to Exxon:

· Criminal Restitution (clean-up): $100 million

· Criminal Plea Agreement: $150 million fine (largest ever for environmental crime) (later reduced to $25 million w/ half for North Am Wetlands Conservation Fund & half to Victims of Crime Fund

· Civil Settlement: $900 million over 10 years to restore environmental resources

· Punitive Damages: $5 billion (largest punitive fines ever for corporate irresponsibility); Exxon still appealing

· Reputational Outcome: Exxon lost market share, slipped from largest to third-largest oil company; target of consumer boycott. Eventually recovered financially

· Lingering Legal Cst: In 2000, Alabama jury assessed Exxon $3.5 billion for defrauding state on gas royalties; jury said Exxon synonymous w/ corporate arrogance & shirking responsibility; verdict set aside; on re-trial, jury awarded $11.9 billion

· Corporate Outcome: Merger w/ Mobil Oil

· Hazelwood immediately fired; tried & convicted of misdemeanor for negligent discharge of oil; worked as SUNY Maritime instructor, lobster fisherman, boat transporter, claims adjustor for his lawyer, 1,000 hours of community service in Alaska

· CEO Rawl resigned in 1993, still earning $1.3 million salary (plus benefits)

· Exxon Shipping Exec Iarossi quit a year later to become president of American Bureau of Shipping

· Exxon Valdez repaired for 11 months, $30 million; renamed SeaRiver Mediterranean; legally banned from Alaskan waters

· Regulatory Outcome: 1990 Oil Pollution Act requires double-hull tankers, escort tugs, other safety measures; includes financial/civil/criminal provisions, including fines and prison terms; created national Oil Spill Liability Trust Fund

· Environmental Outcome: continuing environmental monitoring; only 2 of 28 species affected "fully recovered" (bald eagle & river otter)

Lessons: Slow action; silence; priority of profits over consumer; arrogance; blaming others; lingering legal cost

3 American Trader (British Petroleum, 1990)

Cause: 400,000 gallons of oil spilled off Long Beach CA

Immediate response: Within hours, BP implemented crisis plan; company officials w/ cell phones went to oil-soaked beach where media gathered, gave interviews; BP provided TV footage of underwater ruptured hull of tanker; dead animals included 2 seals, 2 sea lions, 48 birds (BP said only 43, plus caring for another 126); BP sent 415 cleanup workers

Follow-up: Received media praise for good PR; praised also for helping local economy by buying from local oil-cleanup suppliers; participated in $35 million cleanup; paid $2.9 million for wildlife restoration & cleanup claims settlements; earned $1.1 billion profits in first 6 months after oil spill

Lessons: Quick response; media as ally; accept responsibility; avoid blame

 

7 Benzene (Perrier, 1990)

Cause: Trace amounts of cancer-cauzing benzene found in bottled water, first in North Carolina, later in Europe.

Immediate response: Perrier acknowledged problem through spokerson, but CEO refused to hold news conference or give interviews; meanwhile, company announced world-wide recall; explained that benzene is naturally present in carbon diozide used to make the drink bubbly and was not properly filtered out.

Follow-up: FDA forced Perrier to drop "Naturally Sparkling" from label because it used articifial bubbles; within 5 years sales dropped to half; company divested & today owns 7 of top 10 US brands of bottled water, but Perrier brand not among the best-selling products

 

2 Syringe Hoax (Pepsi, 1993)

Cause: Seattle TV report about syringe in can of Diet Pepsi; FDA issues regional advisory; within 24 hour, similar reports around the country

Immediate response: With no reasonable production explanation possible, Pepsi concluded that it was a hoax; engaged its crisis planning team (which had benchmarked other companies' crisis response, including Johnson & Johnson); used open/transparent communication; granted on-site interviews at Seattle plant; videotaped high-speed canning process; communicated with employees/media/government/bottling subsidiaries; distributed 4 VNRs of canning process (seen by 500 million viewers)

Follow-up: Declared 'hoax' by FDA; survey showed that 94% believed Pepsi acted responsibly, 75% said they felt better about Pepsi products because of PR response; lauded in US House of Representatives for quick & decisive action to end national scare

Lessons: Media as ally; quick response

Cost to Pepsi: $500,000; quarter sales highest ever

 

1 Team Crash (King Air, 2001)

Cause: Plane carrying 10 members of Oklahoma State Univ basketball team/staff crashed, killing all; crash 500 miles from campus on weekend night; university crisis plan not developed for long-range tragedy

Immediate response: OSU news bureau one of first notified; crisis plan guided by principle 'do what is right'; news bureau had difficulty getting info because of distance & time; airport news conference by OSU president; frequent followup briefings; put privacy needs of family first, while responding to media; set up website; created task force to investigate travel policy

Follow-up: Held memorial service on Day 3; memorial scholarship fund in name of victims; built memorial to victims at crash site

Lessons: Built on existing relationships with police/media; single spokesperson & project manager; drill for emergency scenarios & practice plan; focus on priorities

 

5 Silicone Breast Implants (Dow Corning, late 1980s)

Cause: Company became aware of medical problems with silicone breast implants; accused of knowingly manufacturing & marketing products; thousands of lawsuits

Immediate response: DC made rational decision to rely on scientific evidence of no link between implants & illness; public response not rational & disbelieved scientific evidence; company crisis plan to be open & honest 'overwhelmed' by public disbelief; company statements made by various officials (no single designated as spokesperson); apparent lack of sympathy for victims; failed to cooperate with FDA, instead attacked FDA publicly; refused to provide media with info or interviews

Follow-up: Several years after initial problems, DC brought in independent investigator & set up consumer hotline, but this backfired when FDA shut it down for giving misleading info; DC reacted with more denial & attacks against FDA. Over time, DC accepted some responsibility for problems with silicone implants & took correction action, but did not admit what implants were unsafe. DC eventually quit the breast-implant business

Lessons: Liability of existing poor reputation (Agent Orange); misreading publics; relying on reason without understanding emotion (with 'junk science' winning); too little, too late

Cost to Dow Corning: DC quit breast-implant business; in 1999, DC declared bankruptcy

 


Crisis Message Strategy

Your friends and supporters can tolerate error, but they will not tolerate being lied to or being treated arrogantly. Your crisis communication must show that your value their support and that you will communicate with them honestly and respectfully. In addition to specific facts and attention to legal concerns, keep the following message points in mind.

Identify your top objectives: maintain trust, restore confidence, guard reputation

Gain control of situation within first 24 hours

Identify a single corporate spokesperson

Reassure publics about key points, including safety and security, as well as likelihood of recurrence

Don't attempt to shift blame

Show concern and compassion for injury, death, other loss

Stick to the facts; avoid speculation

Be candid and honest

"No comment" isn't an option; if you can't comment, indicate why silence is necessary at this time and when you expect to have a comment

Balance the data content of your message with its symbolism