Corporate crises, which pose a major risk to corporate reputation, seem to be occurring at an ever-increasing rate. With the growth in crisis communications, it would seem that handling a crisis would be routine for most large companies. But this is often not the case. This article looks at some of the biggest mistakes in crisis communications.
We contacted experts in crisis communications in South Africa, the US and the UK to find out what they believe to be the biggest mistakes that companies (and communications practitioners) make in crisis communications.
Going by the number of corporate and organisational crises reported in the media it appears that there is an increase. Evan Bloom, MD of the Crisis Communications Consultancy, says crises are increasing because companies are not prepared to manage them, organisations are more litigious and a more free press in South Africa monitors the business and political environments.
Mike Regester, director and founder of Regester Larkin, believes the increase is also because "no one knows who to trust any more - people group together to form single issue campaign groups. Most corporate crises these days come about because an issue is ignored in its early stages."
Jonathan Bernstein, president of US-based Bernstein Crisis Management, is not convinced about a change in the crisis rate but says there is a huge increase in awareness of corporate sector crises because of Internet-centred news coverage by traditional and non-traditional media. Whistleblowers and others can easily share confidential and often damaging information about corporations.
Management the main cause
The main cause of corporate crises, say experts, is management. "In all our research, we are constantly seeing that the majority of crises have their origins within companies and organisations and management are the causes of the majority of crises," says Bloom.
Over the past 10 years, what has changed most in crisis communications, says Bernstein, is that companies can now survive a crisis better through the Internet as a method of gaining intelligence relative to threats. Regester says: "The Internet is useful because it is a great tool for communicating with a wide variety of stakeholders very quickly but it makes life more difficult because people can organise local boycotts in minutes."
He believes "companies must move quicker to tell its own story".
Bloom agrees that the Internet has been a big driver behind crisis management; so has the growth in corporate governance and business continuity. But the reality in South Africa is that crisis communications is a very new business and communications discipline. "The only organisations in South Africa over the past 10 years that have noticed any benefit are those who have had a crisis and have implemented a crisis management solution."
These are the seven biggest mistakes in crisis communications:
- No issues/risk audit
A company should identify issues that can affect it through an issues audit before it begins to plan for a crisis. Issues should be prioritised and stances worked out. "A sensitive monitoring system is absolutely essential for an effective crisis management programme," says public relations practitioner Roger Haywood.
- Ostrich mentality
This phenomenon occurs when a company hopes that no one learns about its crisis. Bernstein says this is where companies cater to whoever is advising them to say nothing or to do nothing. They assume that they will have time to react when and if necessary with little or no preparation time.
- Lack of preparedness
One of the top mistakes companies and communications practitioners make, says Bloom, is not to undergo a vulnerability and risk audit and scenario planning exercise with a qualified consultancy beforehand. Only after preparation has been completed can a detailed and easy-to-implement crisis management plan to be put into place.
Bernstein says advance preparation, even before the situation becomes public, still provides proactive options such as thrashing out and even testing some planned key messages.
- Poor ability to communicate openly
The biggest mistake communications practitioners make in crisis communications is allowing themselves to be overruled by the lawyers, says Regester. "The role of the lawyers is to "enable" companies to do the right thing, not to block companies from doing so."
Many companies still view the media as adversaries, says Bloom. "They need to recognise the media as a crucial conduit to carry their message."
Apologise promptly and remember that the most credible company spokesperson is the most senior person. Key executives must be trained to deal effectively with journalists in a crisis.
- Not listening to stakeholders
Companies must listen to their stakeholders so that they know their thinking way before any potential crisis develops. As Bernstein notes, feedback from clients/customers, employees, referral sources, investors, industry leaders or other stakeholders must be obtained as this will be useful for determining how to communicate with them in a crisis. Open dialogue with stakeholders enables companies to pinpoint potential crises.
- No formal written crisis communications plan
Companies need to establish a crisis communications plan well in advance of any crisis. They also must establish a training and policy manual, as well as a crisis management team. Updated company telephone and key media lists are vital.
- Failure to test procedures
Crisis communications procedures and plans must be tested realistically and reviewed regularly. Companies should identify weaknesses so they can strengthen organisational capabilities to respond to crises. Frequent simulations ensure readiness to handle a crisis.
Despite these mistakes, some companies handle crises exceptionally well without losing the confidence of key stakeholders.
Bloom says Tracker managed its recent crisis, in which employees allegedly helped hijack syndicates, proactively and openly. "Tracker took action, moved to admit the company had a problem and then told the public what it was doing to fix the problem," he says.
For Bernstein, one of the best managed crises was Duke University's response to the accidental death of a transplant patient Jesica Santillan in 2003. "The university immediately admitted the error, apologised humbly, communicated with media worldwide (including '60 Minutes'), and ultimately completely preserved its reputation."
Regester says British Midland Airways' handling of a Boeing 737 crash near Kegworth alongside the M1 motorway was exemplary. The airline's chairman, Sir Michael Bishop, raced to the accident and gave live radio interviews from his car. "Communication has to begin immediately," says Regester.
With management often being responsible for crises it is important for public relations practitioners to encourage them to be prepared to handle crises effectively. Communications professionals must constantly monitor the environment and advise companies to be vigilant to never-ending threats to their reputations.
Sources: "Managing Crisis, a positive approach" (Gerald C. Myers), "Manage your reputation" (Roger Haywood), "The 18 immutable laws of corporate reputation" (Ronald J Alsop), "Why crises of corporate reputation are years in the making", Financial Times
(Stefan Stern), "The biggest mistakes in crisis communications" (Jonathan Bernstein), Arizona Attorney
Magazine, and "Management blamed for PR crises is on the up" (Evan Bloom), Bizcommunity.com.