The glare of the public eye is turned on your organization. Crisis management is needed, but where to start. Start here with us in your crisis communications.
What is Crisis Communications?
A crisis is a part of doing business, regardless of your industry. That’s a given. We need to talk about what a crisis is. People have different ideas as to what qualifies.
We need a solid definition as a starting point. There are many interpretations out there. Webster’s New Collegiate Dictionary defines crisis as “unstable or crucial time or state of affairs whose outcome will make a decisive difference for better or worse.”
Crises vary from one industry to another. There are not really cookie-cutter crises. However, there are a handful of common types of crises. While these crises are bad without social media, add in social media the crisis is amplified. The following are five crisis where crisis communications are needed.
Company and Economic Developments
Crises related to a company and economic developments tend to be controversial in nature. These are the most common crises of this type:
• Plant closings: Think about Chrysler closing 10 plants by 2010 and the ripple effect on the communities where they were based, as well as the companies that supply them.
• Leadership misconduct: The executive team of now-defunct American energy company Enron highlights leadership misconduct involving fraudulent accounting practices. This crisis not only brought down Enron but also one of the largest U.S. accounting firms.
• Bankruptcy: Arthur Andersen, LLP, formed in 1913, was once one of the “Big Five” accounting firms serving multinational corporations. Due to its auditing of Enron’s books, criminal charges were filed against Andersen, and it was convicted. The conviction was later overturned, but the crisis led to the company filing for bankruptcy in 2001.
• Lay-offs: Global mobile phone manufacturer Nokia is planning to lay off up to 10,000 workers worldwide and close a number factories by the end of 2013.
• Industrial action: A 2012 labor dispute in the Port of Portland, Oregon, involved two labor unions disputing which union was to staff two jobs. The International Longshore and Warehouse Union and the Pacific Maritime Association filed a complaint against the private port operator ICTSI Oregon, stating that it had broken an established labor pact. The two unions requested that the two jobs being handled by a non-maritime union, the International Brotherhood of Electrical Workers, be handed over to them to staff. Work at Terminal 6, a deep-draft container port, slowed, and the threat of a strike caused the port’s biggest partners, South Korea’s Hanjin and Germany’s Hapag-Lloyd, to halt their ships coming to the port.
Product/service failures can cause injuries and death to customers, and they can be destructive to the company involved as well. Toyota had to recall 3.8 million cars in 2009 due to moving floor mats jamming the gas pedal. This recall was very embarrassing to a brand that prides itself on outstanding quality and customer care. Another 2.3 million vehicles were recalled in 2010 due to potentially faulty gas pedal issues. No deaths or serious injuries were reported.
A crisis for the U.S. company Simplicity did involve deaths and injuries. The company sold baby cribs (under the Simplicity name as well as the Graco brand) that were involved in two deaths and many injuries to babies and toddlers. In this situation, consumers unintentionally built the cribs incorrectly. Simplicity voluntarily recalled 1 million drop-side cribs due to the potential dangerous gap, which could lead to the entrapment and suffocation of infants.
Another example of a product/service failure crisis is contaminated food, as in the E. coli outbreak in Europe in the spring of 2011. Twenty-nine people died, and more than 30,000 people were sickened throughout Europe in the outbreak, which was traced back to bean sprouts produced in an unnamed organic farm in Germany. The scope of the outbreak was huge, crossing borders and different governmental organizations throughout Europe. Rumors and premature fingerpointing about the cause created panic and confusion.
Disasters tend to be known only by their names, regardless of whether Mother Nature or humans were primarily responsible. Mention the name, and everyone knows the story. Think of these examples: BP Gulf oil spill, Fukushima, Bhopal, Chernobyl, and Exxon Valdez. All these horrific disasters were human-caused, affected millions of people, and were damaging to the environment. They cost companies dearly both monetarily and in terms of reputation.
When someone mentions Exxon, what comes to mind? The Valdez oil tanker spill and oil-covered birds. This disaster, which devastated the Alaska coastline in the late 1980s, has cost Exxon $3.8 billion in cleanup costs, fines, and compensation. The BP oil spill in the Gulf of Mexico could dwarf that figure. And it may be centuries before people can return to the 30-kilometer (19-mile) exclusion zone of Chernobyl.
Fukushima started out as a natural disaster but quickly turned into a human-caused one. In March 2011, the six-reactor Fukushima Daiichi nuclear plant was critically damaged after a one-two punch of an earthquake and tsunami disabled the cooling systems to reactors, causing meltdowns and the release of radioactivity. While the earthquake and subsequent tsunami were natural disasters, the meltdown was determined to have been human-caused due to lack of foresight and preparation on the part of the Japanese nuclear industry.
The LIBOR (London Interbank Offered Rate) scandal, which broke in 2012, is an example of a crisis involving criminal actions. It was discovered that international banks were falsely inflating or deflating their interest rates to show that they were more creditworthy than they actually were or to profit from trades. Many suspected that the practice had been going on since 1991 and that central banks were aware of it. Top management was said to be involved in the scandal.
Another example is Britain’s The News of the World newspaper hacking scandal. It had been brewing for some time before July 2011, when former editors and reporters were arrested on suspicion that they had hacked into the voicemails of celebrities, royalty, politicians, and other newsmakers and that they had bribed authorities. Rupert Murdoch, chairman and CEO of News Corporation, opted to shut down the profitable publication and endured questioning by a British parliamentary panel.
In mid-2012, a website called “Arctic Ready” appeared, with all the branding elements of Shell Oil, including logos. ( Figure 1.2 shows the Arctic Ready site and the official Shell website side by side [source: Forbes.com]). The Arctic Ready website claimed to be focused on educating the public on Shell Oil’s drilling for oil in the Arctic. It was filled with information and included an ad-naming contest and kids’ game. It was a fake website created by Greenpeace and Yes Men. This well-thought-out campaign against Shell Oil fooled not only the public but the media as well.
While activism against organizations has been commonplace, the digital age has ushered in a new level of attacks, which are more sophisticated and potentially damaging. The @BPCares account was one of the first “activism” Twitter accounts to gain momentum. It was a parody account spoofing BP after the Gulf of Mexico spill in April 2010. In the beginning, it confused many into believing it was the voice of BP. It has and continues to have more followers on Twitter than the official BP account.
Security breaches are becoming more commonplace as the world becomes more reliant on all things electronic. In 2011, Sony’s PlayStation Network was taken offline for about a month after an attack that compromised its 77 million users’ personal information. The “hacktivist” collective “Anonymous” was responsible for the attack. In April 2011, someone else hacked the email marketer that handles customer communications for companies including the American grocer Kroger, Capital One, JPMorgan Chase, and Equiflax. Breaches open the door for identity theft and theft of corporate intellectual property. Such breaches severely damage organizations’ reputations and break customer trust.
What is a Crisis a Business?
In the business world, a crisis is typically an unusual situation and/or event that negatively affects a company’s operations. Such situations disturb normal business operations, threaten company staff or customers, damage the organization’s reputation, or interfere with the bottom line. These scenarios could involve legal, financial, or ethical concerns. When a crisis impacts others outside the organization by affecting services or the public good, a company needs crisis communications. The organization needs to be able to communicate efficiently and effortlessly to get the facts about the crisis and provide information. Crisis communications is an essential piece of a larger process referred to as crisis management. Crisis communications should be included in all crisis plans for organizations.
The goal of crisis communications is to protect and defend an organization facing a public challenge to its reputation. The words protect and defend are very strong words. I’m not fond of such aggressive words, but they are correct. An organization’s crisis communications should help it achieve continuity of critical business processes and information flows under crisis, disaster, or other circumstances.
Traditionally, crisis communications have been about protecting and defending, not for the greater good or the truth. At least that’s how crisis communications have been perceived outside the organization. But this is slowly changing. Social media has played a role in this shift to being more forthcoming and transparent. The public sector and corporations have different perspectives on crisis communications. Although they are different, both perspectives are correct. The public sector, such as governments, look at crisis communications as a way to get information out to the public during a time of crisis. Organizations, such as corporations, look at crisis communications as a way to save reputation. The public sector has embraced social media as a valid communications channel during a crisis. Corporations can learn from how the public sector uses social media during a crisis.
Mind The Gap Public Relations guides you to migrate and/or manage a crisis is an ethical way benefiting both the organization and community.
Crisis Communications Assessment
Every good plan development starts with an assessment.
Crisis Communications Plan Development
Having a solid crisis communications plan developed is essential.
Settle for more
It is not a matter if a crisis will happen, but just when. It is better to have a plan developed and practiced than to create one when a crisis is unfolding.
Mind The Gap Public Relations helps you assess your existing crisis communications plan and build a custom crisis communications plan from the ground up while providing you with on-going support. We step in and help organizations in crisis communications.
We offer online reputation management services including preventative listening programs and reputation repair.
Ann Marie van den Hurk, APR, works directly with CEOs and executives discreetly and professionally managing crisis situations and other sensitive issues. She brings twenty years of crisis management experience to the table.
It is essential to evaluate your past, present, and future situations. We ask the hard questions in order to build a custom crisis communications plan for your organization’s unique needs. Working with you, we uncover threats to the organization and build from there.
After the evaluate stage where a SWOT analysis reveals your organization’s strengths, weaknesses, opportunities, and threats, we map a strategy out with a customized plan.
Once the map has been developed, we can move to action. Preparation is key in a crisis. We provide on-site training to staff with on-going opportunities to hone the skills. When a crisis happens, we are there to navigate the crisis with you until the crisis recovery stage.
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