Abstract
Crisis communications planning is no longer a luxury – it is an imperative. Varying degrees of crises will occur for every organization at one time or another and it is the organization that recognizes this truth and effectively plans accordingly that will thrive in the long run. Having a crisis communications plan enables companies to act swiftly when the crisis happens, rather than wonder what they should do, spending precious time away from actually rebuilding public trust to wondering how they will rebuild that trust. This paper presents several approaches to crisis communications planning as well as the actions to take during and after a crisis.
Crisis Communications: A Plan for All Seasons
Crisis communications planning is no longer a luxury – it is an imperative. Varying degrees of crises will occur for every organization at one time or another and it is the organization that recognizes this truth and effectively plans accordingly that will thrive in the long run. Unfortunately, only about 50 percent of corporations have developed a crisis communications plan (Cameron, Wilcox, Reber, Shin, 2008, pg. 50). This paper will present the key ingredients of an effective crisis communications plan, actions to take during a crisis and those to take following a crisis to regain public trust and rebuild corporate reputation.
Pre-Crisis Planning
The most important phase of a crisis is the pre-crisis communications planning. Without proper planning, a crisis whether large or small, can make a company or organization ineffective. Having a crisis communications plan enables companies to act swiftly when the crisis happens, rather than wonder what they should do, spending precious time away from actually rebuilding public trust to wondering how they will rebuild that trust. Day and Schoemaker report that “a survey of 140 corporate strategists found that fully two-thirds admitted that their organizations had been surprised by as many as three high-impact competitive events in the past five years. Moreover, 97 percent of respondents said their companies lacked an early warning system to prevent such surprises in the future” (2006, pg. 2).
In developing a crisis communications plan, organizations should spend time thinking about a number of factors. While it is good to concentrate on the worst case scenario, it is equally good to consider the smaller, less critical events that could damage a corporation’s reputation. One way to accomplish this is to undertake a process called periphery scanning.
Periphery scanning (also known as environmental scanning) is a process that requires a close look at weak signals that, at first glance, may not seem to have much importance. Most companies will focus on the business at hand and miss both threats and opportunities that exist long before they become critical. A study by the Institute for Crisis Management found that 86 percent of business crises were “’smoldering crises’, in which an organization was aware of a potential business disruption long before the public found out about it” (Cameron, Wilcox, Reber, Shin, 2008, pg. 50). By creating a corporate culture that encourages open, honest sharing of information by all employees, companies can improve their peripheral vision and develop effective crisis communications plans.
To effectively scan the environment, experts recommend using the STEEP method (Day and Schoemaker, 2006). STEEP stands for society, technology, environment, economy, and politics. In other words, when scanning the environment take notice of what society is doing and how it could adversely affect a corporation. Consider technological advances to see if they could impact the corporation’s business or reputation. Are there environmental issues coming to the forefront that could play havoc with the corporation’s business model or products? Is the economy shifting in such a way that corporate strategy needs to shift to keep pace? Finally, what is happening in the political arena that could change policy and legislation that may affect the way a corporation does business? In order to fully explore the possibilities in these areas, effective research is needed.
Research is critically important in developing a crisis communications plan. Organizations should spend as much as ten percent of their budgets on research (Cameron, Wilcox, Reber, Shin, 2008, pg. 116). Effective research helps companies to define their audiences and segment their publics, formulate strategy, prevent crises, keep an eye on the competition, influence public opinion and generate positive publicity.
Public relations professionals are responsible for conducting research, compiling facts and data and presenting them in a clear, concise manner. Traditional research methods involve perusing databases, reading news and journal articles, and conducting surveys. Today, however, the Internet provides enormous amounts of information that, when properly vetted, can identify potential risks and negativity in the marketplace before it becomes a serious problem. Today social media networks can provide a lot of information about how the public views a corporation. If there is negativity out there, researchers can uncover it and counteract it long before it becomes a serious problem.
In addition to social media, it is important to take the pulse of employees and stockholders to determine their attitudes about the corporation. Employees are especially a good barometer because if they are dissatisfied, it will begin to show in the quality of their work. Stockholders are fairly aggressive with their communications, especially when they are dissatisfied, but keeping open lines of communications with them will go a long way toward keeping them satisfied in the long run and especially during difficult times.
Finally, companies need to understand their competition. While most organizations do a good job at monitoring current competitors, there are other competitors that may not have emerged yet that need to be considered. Several ways to keep an eye out is to watch for “patent filings, lobbying efforts, market tests, and changes in hiring practices (Day and Schoemaker, 2006, pg. 62). By keeping a close eye on these activities, organizations will be better able to forecast problems before they become realities.
After conducting this in-depth research, a company should consider a number of questions before actually developing its crisis communications plan. Perhaps the easiest question is, “What is the worst possible scenario that could happen to damage our corporation?” In addition, however, corporations should consider other factors. These could include such considerations as a sexual harassment lawsuit, environmental impact legislation, product tampering, consumer dissatisfaction, the death of critical employees, changing demographics, and much more. By reflecting on a number of possible scenarios, a corporation is ready to develop a comprehensive crisis communications plan.
As with any effective plan, a crisis communications plan should include goals, objectives, and tactics. It may be effective to group different types of crises and develop different strategies and messages to be communicated depending on the scenario. A single spokesperson should be designated and someone should also be designated as the back-up spokesperson. Both individuals should be trained in handling crisis communications. Identify communications channels and their specific audiences, as these may be different for different publics. Develop messages to be communicated depending on the scenario. Determine how much will be communicated and a timeline for releasing information. Decide on corrective action to solve the problem and include that in the communications plan. Focus on restoring corporate reputation through realistic responses and effective communications strategies. Finally there should be an evaluation component that allows the company to take a look back at how effective the strategy was and how to improve it for the next crisis.
Crisis Response
Communication during a crisis is perhaps the single most important element of enacting a crisis communication plan. The corporation needs to take responsibility for its actions and present an honest assessment of the problem along with effective solutions that are implemented immediately. There needs to be a single spokesperson that represents the company and provides assurances to the public. In addition, there should be a back-up spokesperson identified who can communicate the message in the event the primary spokesperson is not available. The spokesperson needs to be high enough in the organization to have credibility, one who is coherent and confident, able to clearly articulate the organization’s response. The spokesperson should never avoid questions by the media. Hemsley reports that the art of bridging “is designed to help a spokesperson stay in control of any interview, even one with media rottweilers” (2009). Certain phrases are especially helpful to bridge the communication from the problem to the corporate response. Two examples are: “a few months ago that was the case, but now …” and “we have recently discovered that …” These allow the spokesperson to respond in such a way to communicate a positive message and explain what a company is doing.
During a crisis, people want information and these days they go straight to the Internet to look for answers. With that in mind, not only should a company place messages on its website that provide answers, but they should also ensure that a Google search will bring the corporate name to the top of the list (Benjamin, 2008). The company website should provide an explanation of what happened and what is being done to correct the situation, and this information should be on the homepage of the website so people do not have to spend a lot of time searching for the information they seek. Depending on the situation, there should be detailed instructions on a product recall, a toll-free telephone number to call for more information, or perhaps a coupon for a free product. A company’s website must be instantly filled with communications that impart trust to their public in order to mitigate the risk of losing precious customers and investors.
Domino’s Pizza provides a great example of how to properly manage a crisis situation using the Internet. Two workers appeared in a YouTube video putting cheese in their noses and doing other despicable acts. The video was viewed by more than a million people before it was finally pulled. The company posted an apology on its website and assured the public that the two workers had been fired and felony charges were being brought against them. Domino’s went a step further and asked their employees to get information out on their personal Twitter accounts and Facebook pages. Domino’s created its own Twitter account to provide assurances to customers along with additional information. They even created their own YouTube video in response (Ruggless, 2009). As a result of their responsiveness, Domino’s Pizza’s reputation did not suffer drastically and instead they received a lot of phone calls, email messages and tweets thanking them for taking immediate action.
State Farm Insurance Company did not respond so well immediately following Hurricane Katrina in 2005. State Farm incurred almost $9 billion in losses, part of which came out of law suits filed against the insurance company for denying claims (Daniels, 2005). Initially, State Farm declared water damage and flooding as the cause of the destroyed homes and refused to provide coverage for thousands of homes. After a number of investigations, however, it was determined that the wind damage that preceded the storm surge did more actual damage to the homes than the water. The public outcry against State Farm was so great that the company’s reputation, as well as its bottom line, suffered tremendously for several years.
An excellent example of managing a corporate crisis is Casdeberry’s Food Company. The company was alerted by the FDA of possible botulism in its hot dog chili sauce and immediately issued a national recall of the product. Working with a PR Firm, three objectives were identified: maximize consumer health and safety by ensuring awareness of the recall; protect the company and its brands; and restore Casdeberry’s reputation as quickly as possible. The company established a toll-free hotline, provided information on its website in both English and Spanish, held numerous press conferences and interviews, and sent audio news releases to radio stations all over the country. Casdeberry’s provided regular updates to its employees, consumers and shareholders over the three-month period until it resumed regular operations. As a result of their dedicated effort to communicate effectively, PRweek proclaimed Casdeberry’s Food Company as the 2009 Crisis or Issues Management Campaign of the Year (PRweek, 2009).
Domino’s Pizza, State Farm Insurance Company, and Casdeberry’s Food Company provide examples of how communications are managed during a crisis. Each of these, as well as countless other examples, should be studied as part of the environmental scanning phase of crisis communications planning. Knowing how well (or how poorly) other companies manage their crisis communications provides lessons learned and best practices to be gleaned when preparing for future crises.
Post-Crisis Phase
Once the crisis has passed and business has resumed, it is time to evaluate the response. Consider the company’s response rate, the messages communicated and their impact on the consumers (or other stakeholders that were affected). Look at the response from stakeholders – whether positive or negative. Determine if the corporate strategies were achieved, if the problem was solved and if corporate reputation was restored. Decide what did not work well and figure out how to make it better for the future. Is additional training needed for employees? What communications strategies were most effective and which were least effective? After conducting this evaluation, determine if new approaches are needed. Pick the best things that happened and ensure they remain in the plan for future issues that may arise.
The primary goal of the post-crisis phase is to restore a company’s reputation and business. Negative publicity of any kind is difficult to overcome but not impossible. State Farm Insurance Company provides a good example. In 2008, three years after Hurricanes Katrina and Rita, State Farm was better prepared when Hurricane Gustav made landfall. Disaster teams were on stand-by armed with new hand-held technology and they had seven mobile office facilities ready to move into the affected areas once the storm cleared. State Farm publicized this fact openly as Gustav began to bear down in an effort to reassure the public that it was ready this time to provide its services.
State Farm learned some valuable lessons. They improved their technology and response to crises but they also improved their image through effective public relations. In an article published in November 2007, State Farm admitted it had made some mistakes and they were trying to correct them, but they denied any wrongdoing (Lee, 2007). State Farm took responsibility publicly and established some corrective actions so they would be ready for the next crisis.
Three years after the disaster, State Farm sought to improve its reputation with the public in the areas most affected by Hurricane Katrina. They teamed up with KaBOOM! to build a new, safe playground in the city once devastated by Hurricane Katrina (Health & Medicine Week, 2008). State Farm agents, employees, family members and friends all participated in building the new playground and providing an education experience for kids and their families. In a news release, State Farm Marketing Vice President said, “State Farm is committed to make our communities better.” This event helped to restore State Farm’s damaged reputation in the community and provided positive media coverage for the company. Instead of being the enemy, State Farm transformed itself into a community partner.
Conclusion
Every organization will face some level of crisis. Some will experience a worst case scenario and others will experience little nuisances that could add up to a damaged reputation. The organization that plans for all these possible events and develops communications strategies for each will be better prepared when something happens to threaten its reputation. Periphery scanning provides a valuable method to detect weak signals on the horizon that could adversely impact an organization’s reputation and help public relations professionals develop appropriate strategies. While these communications strategies may not encompass every possible situation, having a variety of communications strategies available will enable public relations firms to quickly assess and develop a strategy to fit the situation that arises.
During a crisis, organizations must enact their communications plan as quickly as possible. A single spokesperson should present the message that the company is doing everything possible to protect the public. The organization’s website should be immediately updated with the facts about the problem and the steps the company is taking to solve the problem and prevent it from happening again. The media is also a resource that can be effective in communicating the organization’s response.
Following a crisis it is important to assess the value of the communications strategies employed. This will enable an organization to know what worked well and what did not, as well as help to shape communications strategies going forward. It is critically important to restore the organization’s reputation and the public’s trust. Giving back to the community and publicizing those actions will help the public see the organization as a valuable partner once again.
References
Anonymous. (2008). “State Farm; State Farm Bayou Classic and KaBOOM! team up to build new playground in just one day.” Health and Medicine Week. Atlanta: December 1, 2008, pg. 2722.
Anonymous. (2009). “Crisis or issues management campaign of the Year 2009.” PRweek, 12,10. New York: March 9, 2009. Pg. A34.
Benjamin, K. (2008). “Crisis, what crisis…” Revolution. London: October 2008, pp. 63-66.
Cameron, G.T., Wilcox, D.L., Reber, B.H., & Shin, J. (2008). Public relations today: Managing competition and conflict. Pearson Education, Inc.
Daniels, S. (2005). “State Farm’s $9-billion blow.” Chicago Business. November 21, 2005. Retrieved October 25, 2009, from http://www.chicagobusiness.com/cgi-bin/printStory.pl?news_id=18562
Day, G.S. and Schoemaker, P. J. H. (2006). Peripheral vision: Detecting the weak signals that will make or break your company. Harvard Business School Publishing.
Hemsley, S. (2009). “Facing the press.” Training Journal. Ely: May 2009, pp. 42-46.
Lee, A. (2007). “Insurer says it’s correcting its ‘mistakes’.” McClatchy-Tribute Business News. Washington: November 24, 2007.
Ruggless, R. (2009). “Domino’s damage control following YouTube flap shows exemplary new-media crisis management.” Nation’s Restaurant News, 43,16. New York: May 4, 2009, pg. 27.
