Tag Archives: crisis advice

Crisis wisdom from Richard Nixon

Dartmouth professor of corporate communications, Paul Argenti, wrote an interesting and useful blog on Harvard’s HBR Blog on crisis communication. Specifically, it looks at GM’s CEO Mary Barra and how she is dealing with the inherited crisis of the current ignition switch recalls.

This is a concise and very useful summary of the key crisis communication principles–some of which I saw put to use to very good effect recently on a situation where I was a close observer.

At the very end, Professor Argenti quotes Richard Nixon from his famous Checkers Speech.  Nixon:

 “The easiest period in a crisis situation is actually the battle itself. The most difficult is the period of indecision—whether to fight or run away. And the most dangerous period is the aftermath.  It is then, with all his resources spent and his guard down, that an individual must watch out.”

Not sure truer words about crises have been spoken.

 

Five Simple Steps to Crisis Preparation

I was asked by a local business publication to do a column on crisis management. Since the audience is quite broad from mom and pop operations to some pretty sizeable industrial and healthcare organizations, the assignment helped me think through the basics.

So here is my take on the most important steps in preparing for a crisis regardless of the size and type of organization.

Five Simple Steps to Prepare for a Crisis

 

By Gerald Baron, Agincourt Strategies

 

Even though nearly every day we see a new business crisis happening, most organizations have not prepared to face a major crisis. That’s especially true of online or social media crises, even though that is the fastest growing type of crisis most face.

 

One reason to take a head-in-the-sand approach, is that many tend to think that crisis preparation is difficult, expensive or even impossible. But, there are a few basic actions any organization leader can take that will go far in eliminating crises from happening in the first place, and help them deal with them more effectively if they do happen.

1. Imagine your worst case scenarios.

Crisis preparation begins with a thorough examination of the kinds of events that can do you in. Might be data loss, maybe a major flood or earthquake, sudden loss of senior leaders, a bad review that goes viral, a product recall, toxic release or illegal immigration problem that hits the news. Prioritize them using a Risk Matrix, evaluating which are the most and least likely and highest and lowest impact. But, don’t fail in imagination. We’ve seen mega-disasters like the BP spill and the Fukushima tsunami in part because planners just didn’t think such worst case events were possible.

2. Take preventive measures.

If you know that an ammonia release could be devastating, you will probably double check your precautions. If you feel vulnerable about customer service, the scenarios may lead you to focus on significant improvements. The devastation of a product recall may be prevented by doubling down on quality control. And so on. The great thing about starting with scenarios and the Risk Matrix is that you know where to start in preventing a crisis. Estimates are that 75% of all business crises are smouldering–there was smoke well before the fire. Your entire organization needs to be prepared to smell the smoke and report it.

3. Character and actions matter most.

A study out of Oxford clearly demonstrated that the impact on share price on a company during and after a crisis was directly related to the perception of the public about the character of the leaders. Actions matter, and the actions that matter most are the ones that demonstrate the leaders care more about how the event is hurting others than how it is hurting them. That’s why Johnson and Johnson’s response to the contaminated Excedrin is still the gold standard of crisis response: they acted as if it was their fault and did a nationwide recall at their expense even though they were the victim of the criminal as well. And its why former BP CEO Tony Hayward’s comments about “wanting my life back” were so negatively received. Actions must be about helping and protecting others. Crisis communication should be mostly about effectively telling the caring actions that the leaders are taking.

4. Know who you need to talk to and how you will reach them.

Far too many think that crisis communication is about dealing with the media. The media are important, however, they are not nearly as important as your key stakeholders. These are the people whose opinion about you matters most for your future. Large customers, major donors, key employees, labor leaders, elected officials, regulators, community leaders–your future may be in their hands.  The media are important only because of how they can affect key stakeholder opinion about you. But, if you connect with those important people and tell them straight up, honestly, openly what is going on and what you are doing, you will earn their trust even if the media doesn’t get the story right. Media are in the business of attracting an audience–these days at almost any cost. Do you really want to trust your future to them with that agenda?

More than knowing who you must communicate with, you must know how you will interact with them. Phone? Email? Website? Social Media? Snail mail? Meetings? All these can be critically important. It is their preference of channels to use that is critical–not yours. If you don’t know how they expect to hear from you in a major crisis, now is a good time to find that out.

5. Prepare key messages in advance.

Any casual look at business crises today will show that the story of many failings is “too little, too late.” Often companies do the right thing, but too late. In today’s instant news world, you have to be able to engage and communicate almost immediately. And the only way to do that is by preparing in advance. When you think through those scenarios, also think through what questions will be asked of you and what key messages need to be communicated. Involving key decision makers including legal advisers in preparing key messages in advance will mean you can move much quicker, with assurance and authority. And that feels real good when it is hitting the fan.

Gerald Baron, former publisher of Business Pulse, is a crisis communication consultant who has worked with many Fortune 100 comnpanies and government agencies from the federal to the municipal level. He writes the Crisis Comm blog for Emergency Management and the crisisblogger.com blog. He owned Baron&Company, a Bellingham marketing and PR agency for over 30 years and founded PIER System, the world’s leading supplier of crisis communication technology.

Financial Times provides some solid crisis advice to Boards

Michael Skapinger, columnist for the Financial Times, provides some outstanding advice for companies and boards relating to BP.

Here’s a quick summary (with my comments):

1) Boards–pay attention: “First, a Deepwater Horizon lurks in every organisation. You do not need to be in a safety-critical industry, such as oil, chemicals or nuclear. Enron and Arthur Andersen were felled by fraud; Lehman Brothers by risky financial bets.”

The head-in-the-sand types will think that BP was somehow a terrible, rogue corporation. Most others are thinking–there but for the grace of God go I.

2) Accept responsibility: “BP did itself no good in the early days of the crisis by saying that, while the spill was its responsibility, it was not its accident because a subcontractor had been running the rig. This didn’t work, nor should it.”

I believe that BP overall did a pretty darn good job of accepting responsibility–despite the fact that now it is becoming more clear to everyone that the responsibility will not rest on them alone. Nevertheless, they sent mixed messages. A reflection no doubt of the deep tension between legal concerns and reputation concerns. That is a lesson most companies need to pay very close attention to.

3) Words matter: “Anyone could suffer the attention lapse that led to Mr Hayward making the unfortunate “I’d like my life back” remark. That is why you need to rehearse what you plan to say before you venture out. You do not want to be stiff or offer “no comments”. You want to be helpful, while measuring your words. It is not easy, but, as ever, the more you practise, the better you get.”

While Mr. Hayward made sure he was very visible and avoiding the “invisible CEO” charge laid against the CEO of Exxon in the other incident. But, there is a danger to the “rock star” media coverage of a CEO in the depths of a crisis. We all get tired, we say things off the cuff, we don’t always think through what we really mean to say, and once those words escape, you can’t take them back. Skapinger’s advice is absolutely on target.

4) Don’t complain about the media, because as Skapinger says: “That is the way it is. Blogs and Twitter keep up a relentless patter. But what really hurts is round-the-clock television. Those hours need to be filled with supposed experts who are expected to say what is happening before they can possibly be sure. It rankles with companies, but is not going to change. Far better to prevent the crisis happening in the first place.”

I agree it doesn’t do a lot of good to complain, but it is terribly important to understand how the media is going to treat an event like this. There is only one concern: get eyes on the screen. We saw the truth doesn’t matter, editorial control doesn’t matter, fairness doesn’t matter in the life and death battle for eyes. But what I do say is that when subjected to this kind of fully expected media coverage, you better be able and willing to challenge it. Instead of whining about the egregious reporting of oil flowing all the way to England, BP should have at the time been much more aggressive in challenging the worst of the “infotainment” reporting. They, and Unified Command, were far too silent about some of the ridiculous antics of the media in this event (anyone want to see more of Billy Nungesser?)