How to handle a crisis - 11 communications tips

You don’t have to work for AIG, GM or Peanut Corp. of America to face a crisis. Every company – no matter what size, whether public or private – faces them. While the scale may be different compared to these corporate giants, crises happen all the time.
 
The CEO who leaves unexpectedly. The earnings disclosure that surprises. The sexual harassment claim that comes out of the blue. The VC funding that isn’t banked. The major customer that leaves your company’s fold and goes to your beaming competitor. The company founder who says something inappropriate and gets quoted. The product that doesn’t work the way it’s supposed to, triggering irate customers in the blogosphere.
 
Crises are all around us. Is your company prepared to handle one?

  
Tip # 1have a crisis plan ready to go. Rather than scurrying about when a crisis hits, it makes a lot more sense to have a game plan in place ahead of time. Start by determining what can happen (make lists of scenarios) and then assume it will. Crises fall into two categories: (1) uncontrolled crises (fire, employee injury, deaths) and (2) controlled crises (layoffs, takeovers, major product changes). Decide what you will need to do; frame the action items. Create a crisis portfolio and think through what events could set them off. Align the action you will take with the crisis level. When the crisis hits, work the plan.
 
Tip # 2 build the crisis support infrastructure.  Assign authority and responsibility ahead of time. Build the crisis response team; get an adequate number of professionals involved. Prepare content. Identify all your organization’s publics, not just the obvious ones. Figure out how and where you’ll establish information centers. Identify the chain of communication for crisis notification. Predetermine the way you’ll assemble the team. Constantly train the team by simulating various crises; practice the plan once or twice a year and modify as needed; change scenarios each time. Look for things that don’t work; refine the process. 
 
Tip # 3 speak with one voice. When a crisis hits, you can’t have 10 different people running around speaking on behalf of the company. This is a formula for a damaged reputation. Instead, identify one central spokesperson – at the highest possible level – and make certain this individual has the knowledge, sensitivity, interpersonal skills, authority and public demeanor to speak on your company’s behalf. Make sure this person is very accessible. Strive for consistency in what is said and how it is said. Make sure there’s a clear chain of command.
 
Tip # 4 be prepared before you talk. Invest the time – proactively - to anticipate key questions before they get asked. Know the details. Understand what you can, and cannot, say. Deal honestly with all your publics, but only divulge what’s required. Don’t volunteer damaging information. Only use confirmed facts; don’t speculate. 

Tip # 5 – remember social media. Twitter is a phenomenal real-time communication channel, and a great way to keep people informed, make alerts and be continually proactive. Facebook is an excellent two-way medium to monitor what people are thinking and post frequent updates from your company.

Tip # 6 be there. When a crisis strikes, you can’t maneuver your way through it in your office. Get out there. Be at the scene. Be visible and available. Don’t allow information voids; keep communication flowing. Never surprise anyone. Deal with rumors quickly. Minimize speculation.
 
Tip # 7 fall on your sword. This is the # 1 mistake companies, organizations and even venerable institutions consistently make… despite decades of “how not to do it” examples. Don’t fall into this trap because it’s the most debilitating of all. Nothing damages a reputation more quickly than stalling, deceit and bamboozling. Acknowledge the problem. Express concern. Take responsibility. Express a sincere desire to cooperate with others to solve the problem. Be human.

Tip # 8 – protect the record. Monitor everything that’s said and written including social media. Have a system in place to correct incorrect facts to avoid recirculation of erroneous information. Make sure your organization gets public credit for positive actions taken to address the crisis.
 
Tip # 9 keep reading the situation. If a crisis becomes extended, continually measure changes in public opinion. This real-time monitoring will enable you to modify your crisis plan and communication as needed.
 
Tip # 10 – don’t go quiet. If nothing new has occurred, don’t fall into a black hole. Keep communicating even if the status quo is unchanged. Be proactive in your communication. Always be concerned about the reputation of your company, organization or institution.

 
Tip # 11 – learn & tweak. After the dust settles, get your crisis team together in person and dissect your organization’s crisis response. What worked? What didn’t? What lessons were learned? What can you improve next time?

Hesitation kills reputations

There’s been a lot of hesitation lately.
 
Companies hesitated. Media hesitated. Governments hesitated.
 
Hesitation – and the impact of slow movement – profoundly affects brand reputation and public relations effectiveness.
 
Recent hesitation examples include:
  • SIRIS Radio and XM took too long to merge and are now on the brink of bankruptcy.
  • Newspapers across the country, including The New York Times, took too long to adapt their business model to the realities of the Internet and are now in peril of extinction.
  • Circuit City fired a majority of its higher-paid staff and replaced them with lower-paid employees; customer service took a serious nose dive; they didn’t act fast enough to rectify the mistake.
  • Electric-car maker Tesla failed to get its electric car into mass production on schedule and is now praying for a government bailout to stay afloat.TESLA ROADSTER
  • Apple hesitated to offer a DRM-free music option on iTunes, enabling Amazon to jump in with its own DRM-free offering and take away serious market share.
  • The FDA didn’t move quickly enough in the peanut butter paste crisis, causing 1,000+ products to be recalled, 600+ people sickened by salmonella and nine deaths.
  • The government didn’t act swiftly to penalize corporate excess and demand precise accountability for tax payer loans to corporations.
What’s the impact of all this hesitation from a public relations perspective? (Note: when I say “public relations” I’m talking about the real intended purpose of PR which is aligning organizations with the public good, not acting against it). 

In addition to inflicting suffering and even loss of life, hesitation also affects: 

  • An organization’s relationship with consumers
  • The steadfastness of its brand
  • The top and bottom line
  • Institutional reputation
When corporations fail to make swift, voluntary recalls; when they are forced to act; and when thousands of consumers are personally affected, the corporations themselves also suffer because former allies become adversaries. Profits and revenue are impacted when people think twice and stop buying or when products are pulled off the shelves.
 
When government doesn’t respond quickly enough to help people in need, it inevitably loses the trust of its own citizens.

While attorneys and political advisors typically err on the side of “no comment and give it time,” governments and corporations can directly benefit by putting in place a counter-balancing perspective that errs on the side of swifter action.

Caring for others and acting faster improves an organization’s lot in life. It can make popularities soar. Revenues and profits climb. Consumers more brand loyal. And grow reputations positively.
 
Not a bad trade-off for less indecision.

Greening the grid: Big Brother or big savings?

man grabbing houseHomeowners tend to cast a cold eye on their electric utilities, particularly when it’s time to pay the bill or when the power fails. So it’s no wonder that a new clean technology initiative from the utility industry called Advanced Metering Infrastructure (AMI) has consumer advocates suspicious with some calling it a Big Brother-like intrusion into folks’ homes.

In a nutshell, AMI aims to help conserve energy by enabling two-way communications between the home and the utility through a wireless network of smart meters and smart devices in the home. Picture a smart air conditioner that the utility can turn down remotely when an over-extended power grid starts straining.

AMI will let consumers and utilities work together to conserve energy consumption in the home during peak energy demand periods. It will also let homeowners see when, how and why they’re sucking down kilowatts so that they can make smarter, greener lifestyle decisions. Consumers benefit by saving energy and getting discount rates for playing ball with the utilities. Utilities benefit by avoiding brown-outs and black-outs during demand response periods. 

Despite the obvious merits, it’s a potentially huge PR challenge that the utility industry has yet to take seriously, which is unfortunate because the critics are on the wrong side of the debate this time, IMO.

What’s not to like? Opponents claim it's a waste of ratepayer money that hasn't proven it will reduce electricity usage. They say that fluctuating time-of-day pricing will give utilities the opportunity to raise, not lower, prices. And they don’t like the idea of giving the power company the power to reach in and have their way with your home. Ratepayer advocates such as TURN, The Utility Reform Network, have already launched aggressive legal and political campaigns against the initiative in California and elsewhere.

As a skeptic who never likes to pass up an opportunity to stick it to The Man, I should be wary too. But homes and buildings are worse polluters and energy guzzlers than cars. And ever-growing energy demand, wars for oil and climate change are just a few good reasons for taking risks on new technologies that stand to conserve energy in homes. It will be interesting to see how well the utility industry can counter the ratepayer backlash and rally support for its new initiative.

{Disclosure: Beaupre client, Ember, makes wireless chips that enable AMI applications}

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UPDATE: Celeste LeCompte at GigaOM covers the issue from the home appliance perspective.

UPDATE: The Wall Street Journal also weighs in.

Greenwashers versus mob rule

mob ruleAn interesting battle is being waged through social media channels between General Motors and electric vehicle (EV)enthusiasts, who believe GM’s recent embrace of hybrid cars is just another disingenuous attempt to greenwash its image. It’s a great example of how social media has not only given the little guy a voice against corporate interests, but how the little guy can now drown out the big guy, sometimes to a tyrannical extent.
 
The EVs cite as evidence the Sony Pictures documentary Who Killed The Electric Car? It chronicles a sinister collusion between auto makers, Big Oil and Big Brother to terminate the fledgling electric car industry before it could take hold. Beyond its theatrical and DVD release, the movie got even wider distribution as a viral video via YouTube, social networks and blogs. And it didn’t help GM's cause when general manager Bob Lutz was widely quoted throughout the blogosphere saying “Global warming is a total crock of sh*t.”
 
Conspiracy theories and impassioned rants soon followed on social nets and forums such as the Yahoo!Groups electric vehicle group. EV activists descended on auto shows, policy making events and GM press conferences. An EV movement was born.   
 
GM countered with social sites like gmnext, where people were encouraged to submit media and comments to help GM answer questions like “How can we best address global energy issues we’ll face for the next 100 years?”
 
Nice try. But the Rainforest Action Network, which called it “one of the biggest and most ambitious online corporate greenwashing campaigns,” quickly rallied its supporters to post photos and comments. GM was forced to kill “the conversation” on the site immediately.
 
The on-going debate has been fascinating. GM argues they can’t win with the EVs … that they’re investing billons developing the Chevy Volt by 2010. Yet skeptics say it’s red herring vaporware. The activists counter with the fact that GM built a perfectly good electric car a decade ago, so what’s the hold up?
 
I suspect the truth lies somewhere in the middle. I haven’t forgiven trusted GM since I bought my sh*t box Chevy Citation back in the 80s. Nor do I suffer well the tinfoil hat fringe of community activism. That’s what’s great about the web. Activists can help keep The Man honest, conspiracy theories can forment, and everyone has a voice. But is this always a good thing, or sometimes tyranny of the majority?
 

Sharper Image dulled: bad review breaks a company

Think product reviews don't matter much? Try telling that to gizmo retailer Sharper Image, who filed for bankruptcy today due largely to a crippling review of its Ionic Breeze air purifiers in Consumer Reports magazine.

Suckers like me fell for the company's hyper-advertised clean air wonder. But the review showed that the Ionic Breeze not only didn't clean the air, it released harmful ozone, triggering an avalanche of consumer lawsuits.

Don't get me wrong; reviews are an important piece of a successful product launch strategy. No, strike that: they are an absolute must. A recent study from the e-tailing group found that nearly nine out of 10 US online consumers surveyed in February 2008 were influenced by reviews before making a purchase.

Just make sure your product works as designed and doesn't trigger childrens' asthma attacks first.

The Rocket's steady glare

 

Roger Clemens looks directly into the camera and in perfectly earnest tones rebuts the Mitchell report’s accusations that he used steroids to become “The Rocket,” one of baseball’s most durable power pitchers. The video, which Clemens posted on YouTube and his foundation’s Web site, is his first public response to the report’s allegations. Clemens isn’t the first celebrity to use a canned video to speak past the media directly to the public. Michael Jackson self-produced a video to rebut pedophilia allegations years ago. Clemens, however, is among the first besieged celebrities to mix old and new media in a crisis response strategy that takes advantage of both mediums’ strengths.

The punch line of Clemens’ video isn’t the denial itself, it’s Clemens announcing that he will answer the allegations in detail this Sunday (Jan. 6) during a one-on-one interview Mike Wallace on CBS’s “60 Minutes.” This is an innovative strategy because Clemens essentially used social media as a conduit to mainstream broadcasting. He is also avoiding the public sausage grinder also known as the open press conference. Clemens has chosen two controlled environments instead of one uncontrolled environment where he’s more likely to be knocked off balance by questions shot from every compass point. The video gave him 100 percent control over his message. It’s unlikely Clemens can control Mike Wallace; Wallace has been picking his teeth with the bones of guys like Clemens since the black-and-white era. But Clemens has more control over a one-on-one interview – even with a predator like Wallace – than he would with a roomful of reporters each pursuing their own agenda.
 
There are two weak spots in Clemens’ strategy, and it will be interesting to see how they play out. The first is that for all its flaws, the press conference gang fight bestows credibility. After his dalliance with a male prostitute came to light in the early 1990s, U.S. Rep. Barney Frank (D-Mass.) endured almost two hours of grilling from the Boston and national press corps on live television. It was like getting purified by flame. Frank copped out to what he did wrong, quelled speculation about what he did and didn’t do, and effectively took the steam out of the controversy. He had atoned in the roughest of public arenas, and the voters forgave him. The Wallace interview could exonerate Clemens in the court of public opinion, but it lacks the raw openness of a live press conference. Skeptics will always question whether there were off-camera agreements with “60 Minutes” to soften certain angles. They will speculate on what was edited out – or in.
 
The second weak spot in Clemens’ strategy is the most obvious. If it comes out that he’s not telling the truth, the final public verdict will be much harsher than if he had come clean, as his friend Andy Pettitte did when he was named in the Mitchell Report. If the facts line up against Clemens, the earnest expression and solid eye contact in his video will just be proof of George Burns’ immortal line: “Sincerity. If you can fake it, you’ve got it made.” And if you can’t, no combination of social and mainstream media will help.

Starbuck's hiding the holiday cheer?

Heard about Starbuck's "Cheer Chain" phenomenon? It's when someone spontaneously starts a pay-it-forward chain reaction of goodwill, such as buying coffee for the stranger behind them. 

Cheer Chain stories are suddenly popping up all over media, including Fox News and Good Morning America, which coincidentally happened at the same time as the company’s “Pass the Cheer” ad campaign. To promote the campaign, Starbucks is handing out “cheer passes” of free coffee or gifts to random customers so they pass on the goodwill to others.

Starbucks claims the sudden spike in media coverage is unsolicited. Just the media doing their job, reporting on holiday goodwill stories this time of year, they argue. The cynics, such as The Consumerist Blog, are challenging that claim, calling it a lame PR stunt.

So I called a friend who works for one of Starbuck’s marketing agencies to get the inside scoop. He said he did partake in a guerilla marketing campaign, handing out cheer passes and other goodwill gestures to strangers in the streets and stores in an effort to ignite a cheer chain. When asked if Starbucks PR was actively pitching these so-called “phenomenon” stories to media, he pleaded the Fifth, but did say Starbuck’s PR agency was involved in the campaign in some undisclosed way.

My take is, what’s the big deal? It’s not like Starbucks is being less than transparent in the intent of the cheer pass campaign. Whether the phenomenon starts organically or is the result of street-level marketing manipulation, who cares? The resulting goodwill is the same. And who would fault Starbucks PR for shopping the story around to media? If it’s true the company is planting stories but denying it, why? What do they have to lose by pretending cheer chain stories are self seeding?

 

BONUS: To put you in the holiday spirit, check out  this parody blog post of celebrity chef Ramsay Clark boasting how he broke the Starbucks cheer chain.  (Contains profanity)

 
 

 


Disaster ketchup

The Consumerist blog shows how lame and cliche' it is when corporate wonks use the good ol' "We're taking the issue very seriously" response to a PR crisis.

Bonus: a rap sheet of recent perps.

 

Oprah's lesson

Oprah's school for African girlsAndy Beaupre blogged in September that caring consistency is Apple’s #1 brand-building weapon.
 
Oprah’s performance last week in South Africa (read, watch) epitomized the principle. It was a tour de force of caring, and oh, what a brand she has built. Her press conference on the child abuse scandal that broke Nov. 5 at the Oprah Winfrey Leadership Academy for Girls was an object lesson in crisis management. I never dreamed I could sympathize with a billionaire.
 
Rather than go underground with her legal team, she contacted authorities, launched her own investigation, looked students and parents in the eye, apologized, and laid everything she could out for the media – at the earliest possible opportunity.
 
The day the accused dorm mother appeared in court, Oprah stood at a podium flanked by local authorities and stared into the barrel of the global press corps. She detailed the timeline and the facts, starting with the first inkling of a problem. She was the first to utter the explosive words “sexual abuse.” She publicly acknowledged the gravity of the situation, accepted her share of responsibility as founder, took hard questions, and expressed true emotion: “This has been one of the most devastating, if not the most devastating experience, of my life.”
 
No stonewalling. None.
 
Oprah, who earns $260 million a year and has a net worth of $1.5 billion, made the kind of statements and took the kind of actions that would make any plaintiff’s lawyer drool. She had urged students to come forward if they’d been harmed. More girls had come forward, which under the circumstances, was good: “No one ever, ever abuses just one child,” she declared.
 
Oprah was more than accountable; she was inspiring. The debacle could have closed the school, snuffed out hope for its students, and emptied the talk show empress’s deep pockets. Whether it was spin, courage or both, her on-the-record statement was authentic:
 
“I’m happy for the attention because it is one of my goals in life to put child abusers, whether they be in my home, whether they be in my workplace, or in this case, in the academy, to put them where they belong. And that is behind bars.”
 
The students who came forward, she said, represent “the new generation of youth in South Africa who fearlessly take back their voices to speak up about their concern for their fellow classmates. This is really what we’re trying to teach.”
 
And if there was any doubt about her resolve in light of the crisis, she added: “I am prepared to do whatever is necessary to make sure that the Oprah Winfrey Leadership Academy for Girls becomes the safe, the nurturing and enriched setting that I had envisioned.”
 
This was refreshing, uplifting and rather straight talk (especially during presidential campaign season).
 
The Principled Profit blog hailed the appearance as a shining example of “How a Class Act Accepts Responsibility.”
 
All of this is in line with Oprah’s established (and quite credible) persona of caring consistency: This is how a beloved brand endures.

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