Crisis Shapes Reputation

Corporate reputations are based on the public’s perceptions of management strength, corporate performance, and corporate values and behavior

A crisis situation puts these factors to the test. It is often not the actual event, but the company’s handling of it, that creates the crisis situation.

Time is of the essence. Decisions made in the first two to 24 hours of a crisis situation will shape public perceptions of the company and its management, and once formed these attitudes can be very difficult to reverse.

The Right Preparation is Key

To paraphrase Woody Allen, 80% of crisis management is just being prepared.

You can’t anticipate every possible crisis situation. But you can anticipate they will be fast moving, sometimes chaotic, and require people to "do the right thing" the first time — often without the ability to confer with higher-ups or the communications department.

Provide Guidance

You should develop and distribute a crisis policy statement that provides simple, direct guidance for responding to situations that threaten the company’s reputation.

Here’s an example of a policy statement that a global healthcare company distributed to its top 500 executives worldwide.

"In an emergency, our priorities are:

• Assure the health and safety of consumers, customers, employees and the community at large;
• Protect the integrity of the company’s name and reputation;
• Maintain normal operations of the company.
• No other consideration, either business or financial, will be allowed to affect the meeting of these priorities."

In essence, senior management provided executives with a permission slip to do the right thing, regardless of the business or financial impact, and trusted their people’s good judgement. How to "do the right thing" became the subject of management training sessions, debate and discussion across the organization.

Hard-Wire Your Emergency Communication System

In a real emergency, you won’t have time to consult a crisis manual — you probably won’t even be able to find it, or you might be on the other side of the world from it. You need to be able to find the people who can help assess the situation and agree on the proper response — fast.

Set simple procedures for moving information inside and outside the organization. The crisis plan should be a wallet card with a short list of key decisionmakers who need to be involved to solve the problem and get the word out to key audiences.

Establish a high-level crisis team with designated responsibilities, and a designated place to gather (either a "war room" or a pre-existing 24/7 conference call number). Team members should represent the key disciplines that must be involved in different situations, for example, product quality, health and safety, security, finance, communications, legal, sales, consumer relations.

When a crisis strikes, you have three essential tasks:

1. Take control

• Develop a public statement with all available information as soon as you have it — don’t dribble out the facts. Remember, in a high-profile crisis situations, the first media reports could be hitting the news wires in minutes, and be circulating to thousands of websites worldwide within the hour.
• Avoid speculating on causes of the crisis, how things could play out, or what you might do next. "I don’t know" is an acceptable response until you have more information or have taken action.
• Set the timetable for updates to the news media and to your key audiences. Let people know when they will be hearing from you, so they come back to you rather than seek out other, often conflicting,sources.
• Monitor news media coverage; correct inaccuracies immediately.

2. Take action

• In a crisis situation, action talks, "spin" walks.
• Decide how to fix the problem and tell the public you are doing, or:
• Tell what you are doing to gather information you need to act.
• Remember: no credit is received for doing the right thing a week after the fact.

3. Take responsibility

• A heartfelt, direct statement from the top can stop the crisis’s momentum. You may have to argue with the lawyers, but expressing regret and empathizing with people affected, and underscoring your determination to make things right, is a lot different than admitting liability.
• Above all, don’t conclude your statement by saying "Now it’s time to move on." The public will decide when you can "move on." That will be when they are satisfied with your response to the situation, and feel you can be trusted to handle it from here.

Adapted from an October 2003 presentation to The Conference Board