About 11 years ago I was asked to do a presentation on the importance of Crisis planning at a local university. My presentation really hit the mark and soon i was asked to advise on the writing and development of this plan.
What really got Senior Management talking was my Siamese twins approach. I have always been of the opinion that a Crisis plan needs to address both the perceptual and reality elements of a crisis. Thus it is not sufficient to just have a communications plan, an Integrated plan is needed.
Anyway, I was clearing out some of my archived files when I saw this caricature done that day, about yours truly in action. Never thought I would look like the late crocodile – ‘”Die Groot Krokkedil” – The late SA State President – P.W Botha” who used to use his finger in a liberal manner. Unintentional in the least, although I was adamant in getting my message across. The days when I still had hair.
Nice drawing though, HAHAHA!
( A caricature is a simple image showing the features of its subject in a simplified or exaggerated way. A caricature is the satirical illustration of a person or a thing, but a cartoon is the satirical illustration of an idea, according to Wikipedia.
I recently saw an e-mail on the OD List that I want to share verbatim with my readers and I have the writer’s permission to do so. The e-mail is written by Allon Shevat, an OD Consultant from Israel.
My comments straight after this e-mail.
“4 years ago, the train station where I board was bombed at 0700 am. (I was to have been on the 0900 am train.) The station was torn apart, the security guard died, and many people waiting in line were maimed.
Ever since then, there is far more security…….but like many things in my country, it is sloppy and undisciplined.
An airport scanner was installed and now, everything goes on the scanner and passengers must personally walk thru a detector after first emptying one’s pockets.
People wait in the sweltering heat to be checked, and at peak hours it is more or less like JKF in peak hours.
The person who mans the scanner is on her cell phone all the time. She yaks and yaks and yaks, and, like many Israelis (and Indians), she has more than one phone; as she yaks, she send text messages on the other phone.
A few weeks ago, I yelled out “what good is this check point when she is not looking at the screen”? She pulled me aside and told me “I will make sure you take the bus”. I showed her my card with my military reserve rank, and she almost passed out. Within two days, I had a written apology and she was given 2 weeks suspension.
Now she is back again, and…..on her phones.
I was faced with a real dilemma. Since our society is VERY VERY tolerant of bad discipline, (life is hard so we all deserve breaks), I know that I have no chance with getting her off her phone or dismissed.
Yesterday I made my decision and filmed her on her phones and sent the clip to the head to the train hq.
Last night I got a call that “she really needs her salary but you are right; we will have a good talk to her and ensure corrective action is taken……in other words……there is to be no change.
Some societies and cultures are sadly more resistant to random acts of responsibility.
Until the next bombing……
For the past 16 years I have been an independent consultant focusing on Corporate Reputation. Yet, there is another side to me. I am also a trainer and consultant in Occupational Health & Safety – and it is a passion of mine.
For the past 16 years I used to perform Health & Safety training and consulting a few days a month on behalf of an ISO registered OSHA Compliance consultancy.
What I find so enticing is to raise people’s awareness of health & safety issues (dangers) in the workplace. After these workshops delegates cannot express enough gratitude and the statements are always universally the same:
“Thank you for raising my awareness”!
How do we make people more aware about potential crises in the workplace?
This question should interest all managers.
I believe that it is necessary to expose managers to that type of thinking, that we educate and train them, and we share knowledge. The South African Occupational Health & Safety Act has a number of conditions and issues that has made it one of the most benchmarked Acts in the world. One of the interesting requirements and questions that arise from it:
Have you given the employee adequate information, education, and training in his task considering the task, the hazards, potential outcomes and consequences of non-compliance?
A few years ago I had the opportunity of standing at the top of the Empire State Building in New York. Standing there with the wind blowing me nearly off my feet, I could not help but visualize friends jumping of the burning World Trade Centre.
911 has come and gone. Yet for many organisations the impact, reality and lessons from it does not remain. How many organisations have not slipped back into the normal mode of doing things? Assuming that an incident like 911 will never happen to them?
Recently I was in a building in Braamfontein, Johannesburg, South Africa when I decided to use the fire escape instead of the lift, but between the 3rd and 4th floor was a locked gate. When I called the Facilities manager he said the following words to me: “Deon, you worry too much. If a fire breaks out, someone will come and unlock this gate!” No way, in my experience most people look out for number one in any crisis – themselves.
Standing at the 911 site, the thought arose in my mind as to what should an organization do if you are faced with a situation that is beyond an organisation’s normal scope to act? Health & Safety experts teach that 2% of accidents are “Acts of God”, 10% caused by unsafe conditions but that 88% of accidents are caused by unsafe behavior.
How does a company deal with the hand of fate and at the same time protect its reputation and integrity? How can a company come out “smelling like roses”.
One simple lesson is that stakeholders will forgive you for mistakes, but they will not forgive a company for not caring. Therefore in line with industry experience a company who aims to be a good corporate citizen should prepare for any eventual crisis.
But for what and how? Since 9/11, nearly every emergency preparedness and business continuity regulation and industry best practice in the USA has been strengthened, several even mentioning the threat of terrorism as a prime motivation for their enhancements. In South Africa, interest seems to be only to cope with the demands of the latest sporting events.
Considering the following points will help you prepare your organization for the worst.
1. Remember that the very things you believe cannot happen to your organisation can. Professor Ian Mitroff, who for more than 20 years headed up the Institute for Crisis Management ran a crisis management workshop in New York about two weeks before 911 happened. Most of the executives present, represented multi-national companies. In compiling likely risks, car bombs featured at the top of the list. However no one mentioned “flying bombs”. Mitroff goes on to say that something is lacking, and that “That something is our ability to think comprehensively about crisis”. Are you thinking comprehensively about crisis?
2. Equip yourself with knowledge so that you can help your organization be better prepared. One of the most frequent comments I hear from clients is not that they do not know the answers, but that they don’t know the right questions to get started in their planning or to persuade management to allocate resources for this planning. You can read the various good books out there in bookshops or you could equip yourself in the short term by attending training workshops such as my Crisis Management & Communication workshops.
3. Talk to the specialists (consultants, local authorities and emergency management service providers) in your area. If possible, contact your suppliers and find out who has done this type of planning before so that you can reduce your organisation’s learning curve.
4. Revisit the basics of crisis management. I walk into many organisations to do OSHA Compliance workshops only to find out that the organisation have not recently conducted any fire drills, if any. To assume that everyone will be able to escape the building and be accounted for is dangerous. One large firm affected by 9/11 took more than three days to account for its personnel because they lost their primary means to track and contact employees.
5. Appoint one person who is responsible for crisis preparedness across the organization and communicate his or her identity to managers at all levels.
Ensure each crisis planning team (strategic crisis management, business continuity, crisis communications, disaster recovery, emergency response, employee impact, etc.) knows the relationship between their plan(s) and the overall organization’s crisis management goals and objectives. (I provide a two day training course that enables managers to create one integrated crisis management action plan that can assist you. Or, you can purchase my Crisis Toolkit).
6. Audit your organisation’s crisis plans. The audit should cover evacuation/egress planning, personnel accountability, emergency system shutdown procedures, correct names/numbers on emergency phone lists, media and other stakeholder communications guidelines, family communications guidelines, expectations for employee communications and support.
6. Consider holding a table top exercise or discussion around a likely event.
Brainstorm likely crises; determine the roles each team member is expected to play while responding to an incident will help identify strengths and weaknesses in your organization’s ability to respond, especially for teams requiring interaction during the response. Scenario planning is a helpful tool leading to overall preparedness. No organization does everything well, and exercises are a terrific way to highlight improvement needs for multiple areas at one time.
(I work together with organisations to design, develop and facilitate likely scenarios unique to that organisation. I assisted ATNS with that before the World Cup Soccer event, and assisted the Department of Statistics during the Census 2011)
7. Nearly every survey taken after 9/11 has shown that the most overlooked area of crisis preparedness is the human and communication side. When Saambou, the South African bank closed down one employee committed suicide.
Work closely with EAP (Employee Assistance) experts, psychologists, the church and other specialists to determine modes of action prior to problems happening. Communication is integral to making any plan work and should be factored in from the outset.
8. It isn’t enough to know that your organization is better prepared. The impact of a crisis may become an industry issue and affect your business.
The Marikana shooting incidents and riots have placed an unnecessary burden on the Mining Industry in South Africa and has the potential to negatively impact investment in South Africa, and this at a time, just as we are getting things right.
Build alliances with suppliers and industry experts before a crisis breaks, so that you can make use of this expertise when the time comes.
There is lots can be done, but the biggest danger is that of Complacency. Complacency to the extent that people tell me they attended a first aid workshop 8 years ago.
Is your capability/competency still current? If not, you may just hurt the other person.
How sharp is your axe? How current are your Crisis Management & Crisis Communication plans and Capability?
Let me share with you a story written by the late Stephen Covey.
Once upon a time, a very strong woodcutter asked for a job to a timber merchant, and he got it. The pay was good and so were the working conditions. For that reason, the woodcutter was determined to do his best. His boss gave him an axe and showed him the area where he was supposed to work. The first day, the woodcutter brought 18 trees “Congratulations,” the boss said. “Carry on that way!”.
Very motivated with the boss’s words, the woodcutter tried harder the next day, but he could bring only 15 trees. The third day he tried even harder, but could bring 10 trees only. Day after day he was bringing less and less trees. “I must be losing my strength”, the woodcutter thought.
He went to the boss and apologized, saying that he could not understand what was going on. “When was the last time you sharpened your Axe?” the boss asked.
“Sharpen? I had no time to sharpen my Axe. I have been very busy trying to cut more trees for you.”
Complacency is akin to not sharpening your axe.
The World’s Most Admired Company survey by Fortune magazine – see 2011 study results at http://money.cnn.com/magazines/fortune/most-admired/ have been one of the ground breaking annual studies to have been conducted in the field of Reputation and have added much to our understanding of what makes companies great.
But what about those companies that did their utmost to destroy their carefully crafted reputations during the past year (and years). Many companies, institutions and individuals have made this list in the past twelve months.
Perhaps we should start a World’s Most Unadmired Company List. Without being specific, there have been many examples. Many websites and other bloggers have asked their audiences for their thoughts on the matter. Take a look at the examples cited in articles such as:
The Holmes Report – The Top 10 Crises of 2011 – http://www.holmesreport.com/featurestories-info/11377/The-Top-10-Crises-Of-2011.aspx
Australia’s 2011 List – http://prdisasters.com/?p=944
These examples show that no organisation is immune against potential crises and incidents that can destroy their good names. The question that should be arising in your mind is:”What is the potential for my organisation to find its way on to this list?”
- 95% (a lot) of major companies have suffered at least one reputational crisis in the past 20 years
- Major companies suffer a “significant” reversal of fortune every seven years
- One out of two (50%) of these reputational failures were tied to having the wrong business strategy or model; 15% from lawsuits; 10% from merger and acquisition issues. Interestingly, the CEO of Willis Global Solutions Consulting Group said that none of the crises were related to natural disasters until 2011. That is hard to believe since there have been plenty of natural catastrophes over the past 20 years that should have impacted companies such as floods, hurricanes, droughts, food shortages, cyclones, earthquakes, SARS, etc.
Also wanted to mention a recent analysis that came from the 2012 Harris Interactive Reputation Quotient (RQ) and was reported in PRWeek. Harris Interactive reported that advertising has less of an impact on company reputation than social media or new stories.
Research continues to show that word of mouth from news stories with negative information about companies drives perceptions more than we realize.
Weber Shandwick reported in their Company Behind the Brand: In Reputation We Trust that consumers are talking about more about company wrong doing than right doing and advertising may not be as able as it used to be in rehabilitating brand reputations.
The key word now is stakeholders. So many companies have customer service or shareholder programs in place, ignoring their other stakeholders. What are the perceptions of suppliers, the government and the media with regards to your company?
Let me leave you with a question: Who in your organisation has assumed a holistic (systemic) view of managing stakeholder reputation?
If there is no one, your organisation is in danger of making the unadmired company list. If you want to find out more about how you can safeguard your company’s reputation or if you want me to address your management team on this issue, e-mail me.
If you have not yet registered for my Reputation Risk Management Masterclass in Johannesburg, you will reconsider after reading the following ten reasons.
Now I know that you are extremely busy, but it is a fact that successful people MAKE TIME to spend time on their own development & increase of knowledge, and knowledge of minimizing and mitigating reputation risk in today’s connected society is vital.
You choice. Your decision.
Here are TEN compelling reasons why you should attend it:
1. ‘A Company’s Reputation is its greatest asset and risk, and it should be protected at all costs’. Mr David Glass of Wal – Mart. This course takes a close look at how to protect and defend this asset.
2. Warren Buffet, the world famous investor and richest man has on numerous occasions said these famous words: ‘It takes 20 years to build a reputation and 5 minutes to ruin it and if you understand this you will do things differently’ . Why? Well, Mr Buffet understands that money can always be made, but that a reputation, once lost, is not easily restored. In fact, some studies show that it can take between 3.5 to 11 years to restore a damaged reputation. Want to prevent reputation damage before it even gets public?
3. Reputation Risk is listed in more than five international surveys as a company’s most dangerous and volatile risk, yet, less than 43% of companies surveyed had a plan to deal with reputation risk both from a mitigation and reputation incident perspective. Question: Is your Company ready to deal with a Reputation incident? If you are not sure, take this survey – http://bit.ly/d5ej9s and attend to learn more tips and strategies to protect your organization.
4. As part of your company’s planning for crises and dealing with reputation risk, have you embedded Reputation Risk into your Enterprise Wide Risk Management system and have you defined reputation risk in 4 different ways so as to determine and implement different perspectives and mitigation strategies? Would you like some assistance with that process? I can guide you.
5. Did you know that this Class integrates best practice and thinking from many disciplines including Reputation Management, Public Relations, Risk Management, Corporate Communications, Corporate Responsibility and Strategic Management, and is a must attend for Corporate Affairs, PR, Risk Managers, Compliance Officers and any staff member responsible for maintaining and protecting a company’s fine reputation. Attend to get a systemic view of this asset and risk.
6. The damage of a reputational crisis can be direct and indirect. These costs could include penalties incurred because of a lack of legal compliance, litigation, media conferences and advertising costs, hiring of crises communication consultants. BUT what about the indirect costs, the effects on various stakeholders? The increased scrutiny leading to additional problems? The customers that do not return? Does your plan of action include both Reputation Incident and Reputation Erosion possibilities?
7. Do you know how to identify reputational risks including the gap between stakeholder’s perceptions/beliefs and the company’s actual performance, areas of vulnerability and current & emerging issues? (Studies show that perceptions and concerns of stakeholders was an extremely or very significant issue, making Stakeholder Reputation Risk the highest-ranked challenge – This is one of the definitions we will explore).
8. What is your organization doing to prioritize reputation risks and assessing the probability and the impact of the risk on reputation? Reputation Risk is extremely difficult to quantify. What efforts are being made in your organization to quantify the value & risk of reputation. I will take a look at alternatives exist?
9. Did you know that you and your organization be Googled, Facebooked, Twitter searched & measured by what you share & who you know? Does your Reputation Risk framework and Response plans take the impact and intricacies of Social Media into account?
10. Reputation recovery is a function of pro-activeness, communication and readiness prior, during and after a crisis. We will take a look at each of these steps.
Your Choice to attend.
I do not have a copy of this book, but will certainly place an order.
This quote got my attention about this book:
“As our world becomes ever more turbulent the field of business continuity and risk management increases in importance, often warranting Board-level attention. Organizations must proactively prepare for the future by mitigating risk whilst managing uncertainty through well considered policies, procedures, structure, systems and business culture to react to potentially harmful events as they unfold. In this way, their survival is less likely to be threatened and it will be more likely that their goals will be attained. Too many times we have witnessed business disaster because an organization failed to fully recognize the importance of business continuity and risk management or simply adopted a piecemeal and unsystematic approach.
“Practitioners constantly emphasize the necessity of a holistic approach and I am pleased to see this new book by Kurt Engemann and Douglas Henderson does just that. It is also important to blend theory with practice in this hands-on field; again this is accomplished by the authors of this book who have extensive academic and business continuity and emergency management experience. They bring the subject to life with rich teaching and learning features, making it an essential read for students and practitioners alike.”
–Phil Kelly, DBA, Fellow of the Higher Education Academy (FHEA), Fellow of the Institute of Risk Management (FIRM); Senior Lecturer, Liverpool (UK) Business School; Lead Examiner, Risk Decisions, The Institute of Risk Management (IRM)
A Strike; planned or unplanned is just another type of crisis and deserves a great deal of preplanning and thought.
Here are a few tips that might help your planning efforts:
What should come to mind first of all – Is how do we service the needs of all our various stakeholders? Each stakeholders has a different expectation of an organisation, and a strike is going to impact on that. Once you have brainstormed that impact you can plan responses for it.
Suppliers may send stock. There will be no one in receiving.
Tip – Tool & Strategy to follow – Inform them of the situation
The Media will be interested in the situation.
Tip – Keep them informed. Do not let them assume.
Tip – Apologise. Be honest. “We have a problem. We apologise. We are doing our utmost to act in your best interest, please bear with us. As long as you keep people in the know, they will can and will be persuaded”.
Now from a BCP & Crisis Management perspective. How quickly can you formulate those messages? Get the releases, the ads, the posters and other communication tools out? Communicate directly with your various stakeholders to explain your position and strategy about the issue?
How can we use Social & Traditional Media to inform our stakeholders?
That is the beauty of a plan. You brainstormed, benchmarked and learnt from others. You have templates etc. in place. You are in control. You have the tools.
Now Act! Please remember it is not the plan that is always the most important. It is the thinking, the preplanning. The exposure. The awareness. It is about the thinking.
“ Thinking ahead!!!”
Without giving away all my knowledge for free (Hey – I also need to make money), I referred the prospective client to my Crisis Management & Crisis Communication Response Toolkit, I shared this:
1. Take a close look at all the other plans in the company – Emergency Response, Health & Safety, Disaster Recovery, Security & Business Continuity plans. Each of these have communication components which you may want to incorporate.
2. Take a close look at definitions. The words transparency, disclosure and public opinion needs to be carefully defined and brainstormed. For instance, transparency is affected by close periods(share trading), laws and regulations and stakeholders perceptions. By voluntary, mandatory and involuntary responses like WikiLeaks moments.
3. Compare your Crisis Communication plan to best practice when it comes to strategic communications planning. Some tips:
Who are your target audiences? Writing a Crisis Plan is a Strategic Communications & Stakeholder Management planning exercise.
My advice would be to proceed as follows:
- Diagnose the current state of communication including the key messages and main targets /stakeholder groups. With other words who needs to know what? What do they know already, etc.?
- Identify key stakeholders or your target audience. Segment key stakeholders groupings.
- Identify contact points i.e. best points or places to reach your target audience.
- Develop communication strategy – now only do you decide on the methods and media to use.
- Identify communication objectives for each target audience/stakeholder.
- Select media best positioned to deliver the message. Take a look at both basic methods as well as social media technologies.
- Develop message strategy for each target audience (stakeholder).
- Decide on implementation strategy (Tactics).
- Compile a Communication- Strategy Matrix.
- Do a Budget.
- Implement & Deliver messages
- Monitor, evaluate and adjust communication program as necessary
For me the biggest problem occurs when people immediately think of the tools to communicate with.
By thinking through this process you will include measurement and delivery evaluation techniques, therefore ensuring impact of message and return on investment.
Chances are incredibly high that your company is going to experience a crisis of some kind in the next year. It’s how you handle that crisis which will likely determine whether that crisis builds or seriously damages your company.
As 90 percent of a crisis response is communication, I would suggest that you think about the need to respond in real-time, as Robert Scoble suggested when he was quoted in Fast Company when he said “Reputations are created and destroyed online in the speed of 140 characters.” He obviously referred to Twitter and the common phrase today that reputation can be created (Susan Boyle) and destroyed overnight (Bernie Madoff). (Remember the plane landing in the Hudson river. Ordinary people were tweeting pictures and video footage to the networks before the Media actually got there).
A crisis can strike a Business at any time; and during this crisis a Company’s image and reputation can be damaged significantly. Often, this can be a result of not responding adequately to media and other stakeholder enquiries. Understanding what Communication challenges may arise during a crisis or before one occurs is therefore critical.
In the book Real-Time Marketing & PR, David Meerman Scott teaches how to use how to use time and urgency to gain huge competitive advantage, and I quote:
‘In a world where speed and agility are now essential to success, most organizations still operate slowly and deliberately, cementing each step months in advance, responding to new developments with careful but time-consuming processes.The Internet has fundamentally changed the pace of business, compressing time and rewarding speed.Your accustomed methods and processes may be already fatally out of sync with the world around you. The narrative of your business now unfolds, minute-by-minute, in real time. And it’s no longer guided by the mass media your ad budget can buy.’
Speed is thus of the essence. That’s why it is vital that you develop a crisis communications and management plan or kit that prepares you in advance for this eventuality. This communication kit should assist your organisation to respond timeously and promptly to crisis situations.
Here’s a starter list of eight items that should be included in any crisis communications kit:
1. A list of the members of the crisis management team, which should include, at minimum, the CEO, a trusted assistant/top manager from the CEO’s office, heads of each department, Investor Relations Officer details, public relations and marketing team members, legal and security. In case of actual crisis, this team will be focused down to the group applicable to that specific crisis.
2. Contact information for key officers, spokespeople, and crisis management team members including company and personal phone numbers, email addresses, cell numbers, pagers, faxes, instant message handles, Twitter addresses, even spouse’s cell numbers, should the person be inaccessible by other means.
With the astute use of technology today, the above contact details could be kept in online contact databases like GIST, in Google Contacts or even in Dropbox. I keep this information in all 3 formats and have access to it via my smartphone.
3. Fact sheets on the company, each division, each physical location, and each product offered.
These should be in camera-ready condition, plus available on a disk in a generally-accepted word processor format (Microsoft Word) so they can be revised and printed out if necessary on a computer external to your facilities. Photos should also be included.
4. Profiles and biographies for each key manager in your company, again in camera-ready condition and on disk.
5. Copies of your company, division and product logos, your press release format and the scanned in signature of your CEO on disk in a format that works on your internal word processing program (plus one in Microsoft Word in case you have to work on a computer that isn’t tied to your network.)
6. Pre-written scripts answering key questions that you have generated through your crisis scenario analysis. Included in these scripts should be the words you use to say “we don’t have that information yet, but will let you know as soon as it becomes available.”
7. Contact information for each of your key media contacts both locally, nationally, and if appropriate, key financial press and analysts. Contact information for your appropriate stakeholders like suppliers, political, regulatory, and union leaders should also be included. Don’t be afraid to go overboard here – if you have an oil spill, your CEO will probably want to call not only the Media, but also selected Government representatives.
8. Flowcharts of the Protocols & Procedures to be followed. These will differ depending on the type of crisis. For instance, in the event of death, it is vital that the Department of Labour be informed, forthwith according to the Occupational Heath & Safety Act. Obviously you first want to inform management. Then, the authorities. In the case of a fire, there may be other communication protocols to be followed. Flowcharts can help to speed up decision making.
Where & Who should keep the Toolkit
It’s important for your crisis communications kit to not only be duplicated in some offsite location, but to also include information, disks, graphics, computer files, photos, etc. that are normally readily at your fingertips in your office. These days you can also keep it in the cloud. Alternatively this information, should be in a password controlled format on your website/intranet.
I once knew the Crisis Manager of a Rail organisation. She kept the copy of her plan at home, at the office and in her car. Just in case.
I strongly recommend that you assemble this kit shortly. It will be one of the best insurance policies that you can have on hand once a crisis begins. Remember time is of the essence.
For more information on crisis management and communications, I recommend that you check out my various blog posts.
A News release by Fleishman-Hillard on Business Wire caught my attention this morning, especially the caption – Majority of Analysts Say a Poorly Managed Crisis Causes Detraction in a Company’s Value
According to the release, the biggest mistake companies make during a corporate or operational crisis is a lack of communication and transparency with stakeholders and employees, causing a negative impact on valuations, according to a survey jointly released today by the Canadian Investor Relations Institute (CIRI) and Fleishman-Hillard Inc.
“The survey reveals that a poorly managed crisis clearly has a negative impact on a company’s share valuation, so it is imperative for IROs to be prepared”
This is the same message I have punted for the past 15 years.
The survey polled financial analysts and investor relations officers (IROs) at companies across Canada and the United States on operational and corporate crisis preparedness. It found that while many companies are mindful of the potential damage crises can cause to their sales, reputation and share value, few have an effective crisis management plan in place to deal with negative scenarios — and if they do it is likely out of date. (See some of my previous posts on my blog)
Further, the survey found that half of responding IROs from the financial services and healthcare industries claim they don’t follow a crisis communications plan at all. The survey looked at both operational crises, which are issues impacting a company’s day-to-day business, and corporate crises, issues involving a firm’s executive team or finances.
“Given the recent widely known sector crises — the 2008 financial meltdown, healthcare product recalls, extreme environmental damages, automotive sector crisis and other headline-grabbing frauds and scandals — companies need to be armed with a plan,” said Tom Enright, CIRI president and CEO. “No sector or company is immune to a crisis; having a crisis communications plan in place is simply prudent risk management.
“The survey reveals that a poorly managed crisis clearly has a negative impact on a company’s share valuation, so it is imperative for IROs to be prepared,” Enright continued. “A crisis communications plan is one of the most important tools a company can have in its arsenal.”
Yet for those who have a crisis plan in place, only 29 percent of companies update it once a year, according to the survey results. As a rule, it is best practice to update a crisis plan at least once a year to ensure the content is evolving and maintaining relevance in today’s marketplace.
Not only is there confusion around the frequency of updating a crisis communications plan, companies also struggle with its focus:
- 85 percent of responding analysts say a corporate crisis — fraud resulting in accounting restatement — has the greatest negative impact on a company’s value.
- But over 50 percent of responding IROs say their company builds a plan that prepares them only for an operational crisis.
“Although IROs clearly understand the impact that trust, transparency and proper disclosure can have on company valuation during a crisis, it’s apparent that most companies are unprepared to deal with the fast-moving affects of a corporate or operational catastrophe,” says Tom Laughran, senior vice president, partner and global financial communications co-chair with Fleishman-Hillard. “Timely and honest communications are essential for maintaining the trust of investors during volatile periods. In order to effectively communicate during an emergency, companies must continually examine and update their crisis plan to ensure all stakeholders have been addressed and that an efficient and actionable chain of command is in place.”
When focusing on digital communications, the survey found that while many analysts and IROs recognize the potential impact that social media outlets — Twitter, Facebook and YouTube — can have on their companies, few have a crisis plan in place that incorporates social media protocols.
According to the survey, over 50 percent of responding analysts look to the corporate blog for information during a crisis, but only 17 percent of responding IROs say their companies use this tool as a channel for crisis communications. Given that less than half of responding IROs monitor social media platforms during a crisis, IROs clearly need to incorporate these tools in their plans to maintain control of the corporate message during a crisis and minimize wide-spread negativity.
An IRO’s role during a crisis is very important. As the conduit between analysts and the company, it’s imperative that IROs play a lead role in developing the communications plan. According to the survey:
- 85 percent of responding analysts say IROs are a main point of contact for a corporate crisis specifically.
- 55 percent of IRO respondents don’t know if the crisis communications plan is updated after a crisis.
- 50 percent of IRO respondents don’t know if their company conducts crisis simulations.
- Only 19 percent of responding IROs contribute to the corporate blog, which was deemed as an important source of information by responding analysts.
“Given the importance of the IRO’s role during a crisis, they need to play a much larger role in developing the crisis communications plan, executing crisis drills and regularly updating the document,” said Enright. “Their involvement in the process should be from beginning to end.”
Read more about the survey, the Canadian Investor Relations Institute & Fleishman-Hillard at http://www.businesswire.com/news/home/20110412005462/en/Survey-Companies-Prepared-Manage-Crisis
I will respond to some of these thoughts in upcoming posts. In the meantime , read these posts:
· Your Crisis Communication Response Plan is Due for Maintenance (And/Or a Rewrite) – http://bit.ly/ghxdw4
· Why You Should Plan for Crises Before They Happen – http://bit.ly/b0xDKb
· Is your company ready to deal with a Product recall? A Checklist for your convenience – http://bit.ly/8jdhh0 (Read this post in conjunction with the new Consumer Protection Act that was recently promulgated in South Africa)
· You better be Awake: Searching for Vulnerabilities – http://bit.ly/aFAFw
I have been contracted to run a course for Marcus Evans called Crisis Management and Communication for Reputation Protection at the Grand Millennium hotel, Beijing, China 24 – 25 March.
Check out the Event Website: http://bit.ly/gcctGS
Deloitte, the business advisory firm, has developed a new smartphone application, Bamboo, to help businesses handle disasters and crises. The new application is the first one of its kind in this field and is not reliant on mobile network connectivity to work.
The smartphone application stores up-to-date disaster management procedures and action-plans in an interactive and user friendly way on employees’ mobile devices, such as the Blackberry or iPhone.
- Convenient access to your organisation’s crisis management, business continuity or IT disaster recovery plan, when you need it most
- Access to latest contact details by integrating with an organisation’s existing HR and Business Continuity Management systems
- Push technology to deliver up-to-date information which is stored locally on employees’ handsets
- Ability to activate teams and understand individual roles during an incident
- Easy deployment of updated or new incident management procedures and actions through a central server and software
- Auditing and action-tracking for post-incident debriefs
- Easy access to critical information to improve management response times
- Ability to send notification alerts about an incident to all staff.
Rick Cudworth, head of resilience and testing at Deloitte said: “Recent tragic events around the world continue to highlight the importance of an effective and swift incident response. Reacting quickly minimises the potential impact of a disaster on an organisation. Deloitte created Bamboo to simplify this process for both our employees and our clients.
“Clients have asked us to help them access their essential information and the technology to use it effectively. In recent incidents they found plans were out-of-date, contact details were incorrect and the telecommunications network suffered failures making voice and data communications difficult.
“During an incident, the majority of employees take only their personal belongings with them, such as wallets, keys and, of course, their mobile phones. With Bamboo, staff will now be able to access their individual action plans, regardless of location or mobile network connectivity. Management will now be able to communicate with their employees immediately to inform them of the incident, verify their safety and location, and communicate necessary actions and contact details – all via their handsets.”
Although I have not had the opportunity to use this program in action, it is in line with the protocols I always recommend in my Crisis Management workshops.
One other method that you can use in the interim until your organisation decides to use a dedicated application, is to ensure that an updated contact list and flow chart of actions to be taken, is created and put in a Dropbox application. Then, all you have to do is ensure that managers have Dropbox installed on their phones.
At least that will be a start. Other than that, make sure that you keep a copy of your crisis plan – in your car, filing cabinet and at home.
If you haven’t dusted off your plan lately, now’s the time.
The rapid evolution of citizen journalism and the collaborative Web has changed the way companies & countries need to watch for looming crises, assess the reaction to crises, and respond.
Citizen journalism, of course, is nothing particularly new, but the speed with which messages can circulate today – through the use of mobile phones, camera phones, Blackberry, Twitter and the Net-have changed the dynamics of how a crisis unfolds.
In fact, it now even has the power of getting a momentum on its own and assist in revolutions, such as what happened in Tunisia and now Egypt. Take a look at this article Egypt: The camp that toppled a president and click on the word blogger in the photo.
There are two factors at play when a story hits the Net. The first is the number of people influenced by what the person is writing, either in a mail; a tweet, a web forum or in a blog. The second is the attention paid to the spreading story by the media, which is often compelled to pick up the story and mainstream it, which makes it visible to all those people who don’t have access to the internet.
Many crisis communication plans these days don’t include specific strategies for using the Net and other forms of online communication. Have you considered and can you use the technology to use when there is a social media crisis via the Web? Do you know when and how to respond to a particular stance by a blogger or a nasty tweet? Should you even respond?
Unless you have a strategy in place and know how to use various tools and technologies you will be at a disadvantage.
Here are some questions that you have to consider:
- How often do you monitor to determine your organisation’s name in forums, e-mails, online discussions or even in Messenger? Have you considered using online tools like Google Alerts, Cyber alert and SNS Analytics that can assist you with the process?
- Do you participate in online networks like Linkedin and others? Since social media is about being part of a conversation, the building of trust starts long before the issue of a statement.
- Where do you keep your plan? Hopefully you have a copy on your smartphone, in Dropbox, on the web and at home for real-time access.
- Can you update stakeholder (audience) details in real-time? Do you make use of online address books/contact databases? You may want to consider using Gist or Plaxo for this.
- Can you communicate with your audiences directly? How quickly can you get messages to them using social Media tools like Twitter, e-mail and SMS?
- Have you considered using outside 3rd party experts, social media & crisis communication management experts to assist you with an independent analysis before a crisis hits?
With the emphasis today on speed, any strategic crisis communication response plan should include prioritization of audiences (stakeholders), honesty and transparency (levels of disclosure), concern for victims, and avoidance of speculation and selection of appropriate spokespersons.
But the new focus should take into account the era of the 24-hour news cycle or what David Meerman Scott calls the ‘real-time’. A Company has nanoseconds available today to respond to bad news or rumours.
That’s no joke. That’s for real and if your crisis communication response plans are not based on the ‘real-time ‘ principle it is not worth a tweet.
Don’t wait. Dust off that crisis plan before a crisis finds you.
P.S If you want to rewrite or benchmark your crisis plan, these resources can be of assistance:
- Brand Reputation Management – How to Clean Up and Online Crisis
- The newly revised REPUCOMM DIY Crisis Manager Toolkit. A Handy resource that includes checklists, templates and a complete guide to writing a plan, as well as guides on how to use Twitter & other tools in a crisis.
- The PR Coach’s Online Crisis Management Tips
What is the point in not learning from incidents and ‘mistakes’?
Anthony Robbins writes in one book that the word mistakes should be reframed as learning experiences. He states that experiences can either be positive or negative. This an important distinction.
Not all reputation related risk incidents are necessarily negative. Maybe in the short -term, but often through speedy response and adequate communication a negative incident can be quickly circumvented.
Three years ago I was the keynote speaker at a conference In Maputo, Mozambique; organised by the National Society of Journalists.
I left via plane late Sunday evening from OR Tambo airport, Johannesburg, South Africa. Upon my safe arrival in Maputo, I heard the usual news. You here, but your luggage is in limbo, maybe on the way to Egypt.
The weather was very hot & humid, and of course I had no clean clothes . Apparently this was an usual occurrence, BUT what changed it was the actions of one of the NSJ employees. This young guy went back 5 times to the airport until he tracked down my luggage. His action and tenacity changed a negative experience around and I have been using the example ever since.
To me this is a good story, and many times these are the internal stories we should record so that we can use it in communication & marketing materials to build reputation.
However it is vital that every incident be recorded – positive or negative, is analysed and changed into a learning experience.
Thus to make it easy for you, I have drafted a couple of guidelines and questions that you should ask as you write a report on the incident.
Why write up a report?
Ever heard that statement? Even worse. A CEO saying that a reputational risk incident is just a storm in a teacup and will soon go away.
Well, sometimes it does. But most times a small reputation incident impacts and can cause real reputational risk damage.
From a learning perspective it is vital for organizations to learn from mistakes (learning experiences) and incidents. I mean what is the purpose of history, other than teaching us the value of a learning experience?
What went wrong?
One of the frustrating (or is it challenging?) aspects of being a manager is that, from time to time, you are faced with a problem or situation where it is impossible to have a "happy ending", or successful outcome.
These situations typically involve other persons … a subordinate, a customer, a stakeholder representative, or perhaps a fellow member of management (peer or boss, within or between departments).
So, think back over the past month or so and recall a specific situation at work that "went wrong from a reputational perspective" for you.
Review the incident in your mind. Then describe it beginning with the questions below giving enough detail so that a person hearing it for the first time can visualise the nature and scope of what you faced.
The "case history" that you are writing as you complete this exercise will contribute to the relevance of your mitigation strategy.
To help you structure your "case", I suggest that you answer these questions in the order listed. As you do so, put a number in front of the parts of your story to "key" them to our questions.
- What was the problem or incident?
- What factor(s) caused or contributed to the situation? Background (What were the circumstances or events leading up to the incident?):
When did this incident occur?
- Could the incident have been avoided? How?
- What remedies should be applied to lessen damage to perceptions, relationships etc.?
When you write up the incident, think of tangible and intangible impacts. For instance, what is the cost of the incident – in true cost, not actual expenditure.
Compiling this report will give you lots of information that can be used for strategic change efforts and learning for the future. Sharing it with senior management and Risk Management in the company is useful, as long as it does not become a witch hunt exercise.
It is vital to dissect reputational risk incidents, so that future damage can be avoided and actual impact be minimised.
The question that you should ask is: “What did we learn from this incident?’
P.S If you would like to learn more about these types of techniques and others like Reputation Root Cause Analysis, you might like to attend my next Reputation Risk Management Masterclass in Johannesburg, South Africa.
|What:||Reputation Risk Management MasterClass
a 2 – day event that unpacks Reputation Risk, Reputational Incident management and response. It combines latest thinking about Reputation Risk and best practices in Crisis Management & Crisis Communication.
|When:||Monday, March 7, 2011 8:30 AM to Tuesday, March 8, 2011 3:30 PM|
Johannesburg, South Africa
It is to maintain company credibility and reputation, and create the perception that as an organisation you are doing everything humanely to act in the positive regard to all stakeholders.
If I had the opportunity to address a Board of Directors about the need for adequate crisis response planning and emergency preparation, there are only five points we would discuss, and the discussion would take just a few minutes.
1. How surviving the first two hours of an emergency or disaster can save assets, markets, and reputations.
2. How poorly handled crises can end careers. The BP Gulf of Mexico, which ended the career of the CEO is an excellent high-profile example.
3. Why the expectations of outsiders and various stakeholders will control the perception of how a crises is managed.
4. How handling a crisis insensitively, or not at all, can escalate visibility, cost, and reputational damage. (Look up Dow- Corning’s handling of the breast implant disaster)
5. Why what the Board says and does and when it is said and done will profoundly affect the organization’s reputation for some period after the crisis subsides.
The single purpose for preparing to manage the unplanned visibility caused by a crisis is to survive the first few minutes, hours, and perhaps day or two of the problem – if indeed it lasts that long. The greatest inaccuracy, misinformation, and error occur during this very early timeframe.
In fact, most communications energy following this early phase will focus on the correcting errors, mistakes, and misperceptions created at the beginning of the problem.
Fortunately, with a modest amount of preparation, practice, and assignment of roles and tasks, early miscues can be minimized and corrected. That means less damage to reputation, credibility, and employee morale.
If your organization is worthy of its reputation and is interested in maintaining its credibility, then crises management preparations are an absolute necessity. When bad news occurs, there are critical audiences, including your own employees, who have expectations of your behaviour and ability to manage problems.
Every one of your stakeholders will focus on your organization’s response. How it acted, what it said, all of these will either add or distract from the organization’s reputation.
That is why I refer to Crisis Communication and Management as Siamese Twins! You cannot have the one without the other. The problem is that in many organisations crisis response are fragmented and should be combined instead of being called Emergency Response, Business Contingency, Disaster Recovery, Occupational Health & Safety, Security and/or Crisis Communication plans.
When a crisis hits an organisation it better be ready to react with speed and finesse to deal with the reality and the perceptions created during the crisis. Experience have taught the importance of foresight and preplanning.
A Crisis Response and Communication Plan is a blue print of what processes and actions needs to kick in depending on the type of crisis facing the organisation.
Here are some of the questions I will ask your Board: “How ready are you to deal with the hand of fate?” “How long will it take before your plan of action is executed?”
“What will you say to a group of stakeholders, bereaved families and news hungry media?”
As a company with good intentions, how do you communicate bad news such as a profit warning, in such a way that you can minimise negative market fallout.
What goes through most company management’s minds are: "What if shareholders pull their money out? Well, they may or may not. Today, that decision can depend at least in part on a company’s reputation in the market place – how a company is perceived by shareholders and the public- whether they think it operates efficiently, has credible leadership and has a firm grasp on the industry and its place in the market.
The challenge lies in how you manage and shape those perceptions and get the right message across to the investment community about your company. Especially in the Internet Age when you have no control over the flow of information and rumours. After all, how can you control perceptions when any investor, large or small, can gather detailed information on your operations with the click of a mouse?
These days, it takes extraordinary knowledge and skill to navigate the territory of managing perceptions and building a corporate image and identity, "You’ve got to have a good understanding of how perceptions are formed and how the investment community operates. But more important, you have to find ways to get your message across in an era of uncertainty!
Indeed companies that once had time to react to a drop in earnings or an internal crisis before breaking the news to the investment community now must find ways to get ahead of the news or stay in a reactive mode and face the consequences.
In today’s high-pressure, every second-counts environment, a company can’t afford to employ a communications policy that forces shareholders and potential investors to read between the lines when problems are present. As a company you need to communicate consistently and proactively. Some companies want to go quiet during bad news, but they need to communicate regularly in good and bad times.
Many companies have learnt that openness and transparency relates to much more than just financial data. A good example is the increasing interest in for example ethical investing. More and more investors are looking at measures beyond the "financial statements". They are increasingly looking at the drivers of reputation such as whether management is capable in running the company, whether the organisation is playing a role in sustainable development and whether it has an adequate record on managing it human capital etc.
So here are some valuable strategies and tips that can minimise the potential damage:
- Open the lines of communication and educate all your stakeholders as your business climate UNFOLDS. Keep them in the loop through regular briefings and knowledge sharing LONG before whatever hits the fan, does. Make sure that you have done adequate stakeholder profiling and that your contact lists are up to date
- Prepare for any fallout. Message preparation and reputation recovery should take place long trouble strikes. In today’s climate a company only has a nanosecond in which to respond. How ready is your company to respond to a news crisis? How quickly can you post new information on your website? How quickly can you communicate DIRECTLY with key stakeholders and influencers?
- Take time to build relationships before a crisis hits. Build relationships with key stakeholders, analysts and key opinion leaders. Another way of spelling the word TRUST is "TIME". It takes time to build relationships and credibility. Start now. Identify stakeholders carefully (Stakeholder Profiling & Prioritisation I cover in detail in my Stakeholder Reputation Master Classes). Today one person with a PC and a modem can damage your company’s reputation.
- Benchmark your communication processes both formally and informally. Executives go for annual medical checkups but they also go and see the doctor when they are feeling uneasy. Conduct regular spot checks. Use online survey methods such as Zoomerang to track issues and perceptions.
- Incorporate maximum disclosure as part of your company’s strategy. That means that it’s not so much what you say; but how consistently you say it.
- Manage expectations. The best way is to be honest and keep people informed. No one likes untimely surprises. No one likes bad news, but it becomes more palatable when it is less likely to damage a person’s personal position.
As a general rule I would suggest that it is better to be honest upfront. Be careful to discern between pure hype and honest information. If you do have negative news, be honest but concentrate on sharing that the company has a clear focus on its mission and goals and a commitment to follow through on its strategies. When potential investors sense the management team’s commitment, their confidence is strengthened.
Minimising the potential fallout from a Crisis is an essential strategic planning exercise. However it is an exercise that deals in tangibles like planning issues AND perceptions and intangibles.
The only positive lies in HOW your company will respond and these types of decisions should be brainstormed and made long before the actual crisis.
I guess what I have been trying to say is that your organisation should immediately plan and prepare a plan of action that you will duly communicate to ALL stakeholders. Remember that even if you cannot deliver the goods or pay salaries, that you want your reputation to remain intact.
Thus the way in which your company reacts to this crisis will be paramount in its future dealings.
Footnote – THE CRISIS MANAGER TOOLKIT
This toolkit is designed to assist companies with their crisis management planning or to assist those managers interested to learn about managing crises, but cannot or are not allowed to attend a Crisis Management program.
Years and years of experience have proven that the companies who copes the best with crises of all kinds are those who are prepared to deal with the hand of fate. Those companies who have set in motion processes to minimize potential crises.
Companies who cope successfully with crises are normally companies who have a predetermined plan of action to deal with various types of crises. This plan of action normally includes stakeholder communication response plans. The toolkit is a useful resource that can assist any manager in this phase and during a crisis, and can serve as an instrument that you can use to benchmark your existing plan against.
The Crisis Manager Toolkit contains everything you need to compile an integrated crisis management & communication response plan – available as a down loadable zip file.
For more information e-mail deonbin (at) icon.co.za
They say that when a crisis strikes, how you act in the first few minutes determines the final outcome. With more companies developing crisis or disaster recovery plans they can turn to if the unthinkable ever happens, service providers are not far behind, hoping to offer them the right solutions for the job.
Numerous crises ranging from product Recalls to Oil spills to Social Media crises have again highlighted the importance for companies to be prepared. REPUCOMM has launched a crisis management toolkit that can assist companies to create a workable crisis management and crisis communication response plan for the business.
‘If you have an emergency situation that needs to be dealt with, the last thing you want to be doing is worrying about how to deal with it or worry how to keep all your stakeholders informed.’ said Deon Binneman. ‘Being prepared is an ethical responsibility to stakeholders’.
The Crisis Manager Toolkit is a highly effective, low cost solution to assist any company to develop workable crisis management action and communication response plans and is a useful resource that can assist any manager in this phase and during a crisis, and can serve as a benchmarking instrument. It consists of a ZIPPED file format that contains useful information such as the following:
- Detailed questionnaires, articles and checklists to prompt thinking processes whilst planning and preparing response plans;
- Various guidelines and tip sheets ranging from stakeholder communication templates to dealing with the Media tips sheets;
- Handy templates and forms;
- A Copy of a 2 – day course consisting of a PowerPoint presentation that can be customised for internal training and information sharing use with the Board, executives and staff;
- A 40 page Crisis Management & Communication Response Plan Template as well as a copy of an Emergency Response plan template;
- Guidelines on how to respond to Internet Reputation Crises, including Social Media Guidelines on Twitter, Facebook and Blogging crises.
The benefits of the toolkit are numerous including:
1. It allows for preplanning and development of a plan instead of employing outside professionals at the outset of such a project. Whilst having independent input is essential, it can save a lot of costs if the groundwork have been completed.
2. Many organisations do not have the capacity to have a fulltime Crisis Manager position but that does not absolve them of the necessity of planning for dealing with the hand of fate. Today stakeholders of an organisation expect an organisation to be ready to deal with all calamities as well as the unique communication challenges that these situations bring. But in many organisations plans exist in various forms and guises. Plans exist as Disaster Recovery (IT related), Business Continuity, Occupational Health & Safety & Emergency Response plans, and Communication Response plans (PR/Communication). Sometimes these plans are coordinated, sometimes they are not. I believe that all of these plans should be integrated in an overall crisis management response plan for the organisation.
3. Self- Study. The toolkit is a tremendous aid for those who want to bring themselves up to speed with the latest development in crisis management thinking & crisis communication response. The kit contains a complete PowerPoint presentation with leaders guide notes prepared and facilitated by Deon Binneman the past 14 years.
4. Benchmarking – What works? What does not? What does international best practice and experience teach us? The CM Toolkit is a useful product that you can use to see if your plans stand up against best practice. Are you ready?
The rationale behind the toolkit is as follows:
Recent media reports and other business and natural disasters have again just illustrated the need for companies to plan for all eventualities including the communication challenges that is created during these eventualities. The actual process of emergency planning and crises communication management is a vital one if companies want to safeguard their assets, minimise their risks and uphold their hard-earned reputation.
Two thoughts can guide us in this process, the words stated by Benjamin Disraeli “What we anticipate seldom occurs; what we least, generally happens”, and the fact that Noah built the Ark days before it rained.
Years and years of experience have proven that the companies who copes the best with crises of all kinds are those who are prepared to deal with the hand of fate. Those companies who have set in motion processes to minimise potential crises. Companies who cope successfully with crises are normally companies who have a predetermined plan of action including communication response plans.
Crises management is defined as the ability of an organisation to deal quickly, efficiently, and effectively with contingency operations with the goal of reducing the threat to human health and safety, the loss of public or corporate property, adverse impact on normal Business continuance, and damage to it’s good name – it’s Reputation.
The toolkit is a useful resource that can assist any manager in this phase and during a crisis, and can serve as a benchmarking instrument.
Here is a quick questionnaire (Based on a very detailed 11 page plus one in the toolkit) that can guide your decision to purchase the toolkit – See my blog post How up to date is your Crisis Management Plan? as well as the post How Reputation Event/ Crisis-Ready is your Organization?
POA – The toolkit is in a PDF and PowerPoint Format can be e-mailed to customers.
To find out more about the Toolkit, contact Deon Binneman.
The latest edition of Powerlines – Number 91 – The Newsletter for Reputation & Stakeholder Managers is now available for your reading pleasure.
The latest edition contains articles such as:
- Product Recalls are Not for the Weak!
- No Organisation can State they have no Stakeholders
- It is better to be prepared
- Developing an Integrated Reputation Management system for your business
- Do you have an Internet Reputation Risk Management Plan?
- New Toolkit Released – Crisis Manager Toolkit now includes Social Media guidelines
- I want to speak at your next event!
- 24 – 25 February: Stakeholder Reputation Masterclass
- 16 March: A Product Recall Workshop (Planning for and Managing a Recall)
- 22 March: Marketing a Consulting Practice
Go to http://mim.io/0be72 to read your copy.
Is your company prepared to deal with a Product recall?
Product recalls have the potential to seriously damage your reputation and brand name and can cause distrust amongst stakeholders and possible litigation, especially if it involves aspects of health & safety. In fact a shoddy product recall could results in untimely deaths.
The current product recall by Toyota is a prime example of what can happen to a company. Bad things can happen to good companies. In this case it is a removable floor mat that could cause accelerators to get stuck and lead to a crash.
Just imagine that you are the manufacturers of a product that could implicate the lives of babies. Just imagine that some dangerous bacteria manages to contaminate this product and you have shipped this contaminated products and they are in use at hospitals and clinics throughout Southern Africa.
How will you withdraw the product from the market and how will you inform all these outlets about the dangerous situation in a way that your integrity and reputation can remain intact and not be questioned?The trick lies in being prepared just in case it happens and then reacting swiftly to deal with it, both from a reality and a perceptual perspective. The difference lies in HOW these companies respond. That difference has its origins in how well prepared the business is to deal with the hand of fate. The companies that manages to weather the storm are normally those that are prepared to deal with the crisis and can communicate quickly and decisively.
But, how many small to medium size businesses even plan for this or even know what to do when such a situation comes around?
Perhaps the following checklist can be helpful as a planning and action guide. (Caveat – This checklist is only a rough guide. You should work with professionals before, during and after a product recall crisis. This checklist should be developed into a particular section of the completed crisis communication plan for the business and should constantly be updated. For an example of a complete crisis management template, you could consider obtaining REPUCOMM’s Crisis Manager Toolkit).
Do the following:
- Define a recall (e.g. an event to effect removal of product from business because as a result of an identified hazard or problem) using your company or industry’s specific language.
- Outline how the Company is to react once a recall is in effect and who/what declares a product recall, and what decides that a recall is over (These actions will be influenced by legislation particular to your industry, Industry association guidelines, bylaws, best practice, and organisations like the SABS – South African Bureau for Standards. Quick tip – The new Consumer Protection Act that is coming into effect in October also deals with this in various means -Consumer Protection Act, 2008 (Act No. 68 of 2008), Chapter 2 : Fundamental Consumer Rights , Part H : Right to fair value, good quality and safety, 60. Safety monitoring and recall.
- Outline the product recall classifications and the Company’s responsibilities in each circumstance.
- Define the process to identify affected product.
- Define the traceback system and record keeping practices and where to find the information about who the product was delivered to and when.
- Ensure that supplier and distribution (brokers, retail, wholesalers, etc.) contact lists are up to date and include as much contact information as possible. These lists should be updated either monthly or in real-time.
- Investigate how you would inform the public. It is essential to plan for recalls so that you could for instance quickly and effectively be able to run an advertising campaign, especially if people’s lives are at stake.
- Determine the required legal and other authority notification procedures for your industry.
- Know what data the authorities or legal practitioners will require from the company in the event of a recall e.g: product(s) recalled (brand names, product names, code number, type of packaging); production codes and dates (sell by date or other identification codes); problem/reason for product recall; how/when hazard was discovered.
- Know who will be the Company contact person and who will be allowed to speak to the Media. Make sure that this person is trained and well-versed with interviewing techniques.
- Define the information necessary to vet the quality of product recalled (i.e. complete info on lots, production dates, distribution and location of product, accounting of all product, etc.).
- Have on hand or get it compiled quickly – Any information on product distribution (i.e a complete breakdown of retail/non-retail distribution and amounts sent to retailers, etc.).
- Prepare beforehand any relevant information on how to handle the product. This may be defined by MSDS (Material Safety Data sheets). For instance if the product is in use, how do you prevent contamination of localities i.e. water or air, etc.
- Ensure that you plan beforehand how you will inform all stakeholders about an incident – the authorities, the Media, the shareholders, staff and customers.
- Determine the procedures to handle the return of the product in a retail setting such as where customers need to hand the product back to a retailer, what the compensation procedures will be and how you will communicate with the consumer.
- Set up procedures at the office to handle incoming calls. Ensure that your staff will be trained on what to say and to record. Will your Call Centre be able to handle the volume of calls?
- Have you had a dry-run of your product recall procedure? Dusty procedures is of no use in a policy manual or on someone’s desktop. Regular training is a must.
- Test your quality feedback monitoring systems. prevention is better than cure. If you can deal with problems before they occur, so much the better.
As you can see a product recall is not a simple exercise. Ideally you should plan beforehand and work with a number of identified experts to plan a potential recall. These experts could include HSE, PR and Legal practitioners.
If in doubt whether you need to go to this extent, remember that Noah built the ark seven days before it started to rain! (But he had access to divine wisdom)
Will you be able to say the same, if the hand of fate strikes? That you had prior wisdom?
In an excellent article Chief Reputation Officer: Whose Job Is It, Anyway?, Anthony Johndrow, the U.S. managing director of the Reputation Institute in New York makes the point that ‘’the requisite skills that reputation managers and stewards need to thrive in this brave new world appear to come in five diverse skill sets’’:
- Cognitive Skills (knowledge about business and communication functions, plus stakeholder-specific know-how)
- Analytical Skills (causal thinking and drawing inferences, plus systems thinking and contextual analysis)
- Process Skills (change management, plus facilitation and coordination execution)
- Communication Skills (writing, speaking, presenting, plus comparative dynamics of old and new media)
- Organizational Skills (persuading others and mobilizing support, plus organizing and leading high-performance teams)
This is what I have been writing and saying in my presentations the past few years. I have always stated that the ideal CRO will need OD (Organisation Development), Management Consulting and PR skills,. and have used techniques and tools from these various disciplines in my courses.Now finally there is a dawning and an understanding that Communication is only but one tool to use to manage Reputation.
Let’s analyze this further, by looking at some definitions. This is vital because communication is the sharing of meaning. As Abraham Maslow, the motivational psychologist ( The Hierarchy of needs originator) said :
" If the only thing you have is a hammer you tend to treat everything as a nail". Definitions create the lenses through which we look at the world.
Here are some of definitions that I use in my work:
Public Relations is the management, through communication, of perceptions and strategic relationships between an organisation and its internal and external stakeholders.
A company’s reputation is its most valuable asset. The reputational implications of a business decision is those that impact the way in which the organisation is regarded by those with whom it interacts, including shareholders, customers, employees, the media and any other stakeholder. Reputation is not optional. Every company, organisation, individual has a reputation. The only option is whether to manage it or allow it to be inferred.
The management of Reputation includes a proactive and systematic approach to identifying issues that currently affect your company or will affect it within the next 12 to 36 months. Like it or not, your company’s policies and actions are shaped and developed in anticipation of, and reaction to, political, economic, social and technological forces. PEST will impact.
It is also a process of casting a look internally and examining processes, procedures, policies and issues that could impact and damage the company’s reputation. It involves an in depth look at the quality of management, financial soundness, use of corporate assets, community and environmental responsibility, quality of products or services, value as a long term investment, innovativeness, and the ability to attract, develop and keep talented people.
Thus, reputation management goes beyond the traditional parameters of marketing, public relations and communications. It is much more than just measuring reputation annually through some research. It is in my humble opinion a far more holistic management approach than previous traditional approaches.
Corporate Communications is quite broadly—the professional practice of developing and implementing communication “rules and tools” to enhance the dissemination, comprehension, acceptance, and application of information in ways which help to achieve an organisation’s goals( Diane Gayeski)
Organization development (which is part of Strategic Management) is defined as a planned effort, organization wide, managed from the top, to increase organization effectiveness and health through planned intervention processes, using behavioural science knowledge" (Richard Beckhard)
Looking at these various definitions and realizing that Reputation is both an organization’s biggest asset but also its biggest risk today, it must be clear that what is necessary to build, sustain and protect this asset is a multidisciplinary effort in any organisation. It is no longer a PR only function.
It is strategic management of the highest order.
Take a look again at your definitions – and you will see how it shapes your thinking and your consulting (internal or external) approach in situations.
If I have to make one point I think what needs to be added to Anthony’s list of skill sets is the ability and knowledge to handle crises of all kinds under all types of conditions. Crisis Management skills is a skill set on its own driven by experiences and knowledge gained by Emergency Management, Disaster, Crises Communication and Business Continuity fields.
Organisations will have to have a rethink of who they believe is capable of managing and protecting their organisation’s biggest asset.
Yesterday I had the opportunity to facilitate a workshop on Reputation Risk and the Consumer Protection Act at a conference held at the Indaba Hotel in Fourways, Johannesburg by the Intelligence Transfer Centre (http://www.intelligencetransferc.co.za/).
Not wanting to overdo the legalities of the Act itself (since that was covered by other speakers) I focused on the implications of this Act and its potential impact on the reputation of an organisation.
Since the audience consisted of mainly legal advisers, I focused on the court of legal opinion versus the court of public opinion.
What struck me in the interaction with the audience was the disconnect between the two. Obviously this act brings a number of difficulties to the table, but it seemed that the focus by companies is minimum legal compliance, i.e doing only what is necessary in terms of the specifications of this Act.
The audience found it interesting when I showed them why the Act was promulgated in the first place, namely that it was because companies paid lip service to the reasonable expectations of the consumer stakeholder. The Act now codifies basic rights such as the right to safety, the right to not be taken unduly advantage of and so on.
In my presentation I also focused on the importance of having proper and tested product recall procedures, adequate product labelling, communicating in a crisis situation and I showed them how lack of compliance with this Act could be equated with the lack of commitment to show that you care about the consumer, could lead to public naming & shaming on top of penalties, an increase in lack of trust, a damaged Reputation and ultimately lead to an increase in unnecessary cost.
I also emphasised the point that an organisation will have to address the thinking processes in the company through increased awareness training of this Act and Consumer focused thinking training sessions.
What got me though, was the lack of understanding and preparation amongst the audience when I gave them a simple exercise to do:
Think about communicating about a defect to consumers. What would you need to have in place?
Granted the audience were mainly legal advisers, but they did not know where to start. They did not know where a strategic communications plan would start or end. I just hope that they do have skilled PR or Communications personnel in their companies, otherwise they will find themselves in a pickle over their lack of adequate communication when the time comes.
Ultimately this Act does pose Reputation Risk in that a lack of compliance or adherence to public opinion demands will raise questions about the ethics, values and practices in an organization.
In 2010 I will be assisting companies with this compliance by facilitating in –house workshops on the importance of the Consumer Protection Act. This compliance needs to be viewed as part of the Stakeholder Management processes of a company and should not just be seen as a Compliance issue to be handled by the Compliance Officer or Legal Advisers.
Advertisement: I do offer a Crisis Manager Toolkit that can be used by companies as part of their preparation for product recalls and other incidents. See http://deonbinneman.wordpress.com/toolkits/ for more information or contact me.
A Few nights ago someone contacted me for advice on the above question. This was my partial response:
If you are an internal manager the situation is as follows:
It is always hard to get on top of things once the cat is out of the bag. But in any event, it is best to follow the basic rules of Crisis Communications.
- Don’t add to the crisis by jumping the gun before you have the facts.
- Gather the facts.
- Determine who is going to speak for your organization.
- Make sure they are prepared.
- Act quickly, give the media as much information as possible, they’ll get the information from other sources.
- Never speculate.
- Protect the integrity and reputation of the organization, inform what your policy is, what action the organization plans to take and why.
- Protect your organizations clients. In this case make sure they are aware of any actions which could affect them or their treatment.
After it is all over, it would be a good time to meet with management and promote the importance of putting a crisis communications plan in place for the organization and make sure you are on the contact list for anything that happens in the future. I hope this helps a bit, I am sure others will have additional thoughts.
To sum up, here’s how you should – and should not – handle media communications when a crisis hits your firm:
- Respond quickly, professionally, and positively.
- Don’t dribble out the story, making it necessary for the media to seek other sources.
- Be forthright and thorough when answering media questions.
- Don’t minimize the crisis by simply issuing a press release. Address the media in person through a press conference or small briefing with key reporters.
- Never say "no comment" when responding to questions; rather, admit what you don’t know and promise to get the facts later.
- Make sure facts are accurate and correct.
- Be consistent in your message.
- Use statistics and lists to help emphasize your points. They also have a better chance of being picked up in the story.
No one can foresee every possible crisis, but with a good action plan and media training on your side, your firm can at least ensure media coverage that sends the right messages.