Here’s a question for you – When last have you conducted a dry -run or have had an independent audit of your hospital group’s crisis plan – its communication management and emergency action plans? Especially with the media furore and presence at Nelson Mandela’s hospitalisation and with the proliferation of social media tools and mobile phone technologies.
The Star newspaper reported that “jumpy journalists thronged outside the Pretoria Hospital where the icon is being treated…they also reported that Security had to be beefed up” Other Hospitals can learn from this. With more and more politicians and celebrities visiting South Africa, this is likely to happen more often.
Crises can result in unplanned visibility that can affect the standing of a Company in the eyes of its stakeholders. That’s why an audit of a Company’s crisis plan is as vital as regular financial audits.
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.
No Company, organisation or individual whose livelihood depends on public support can therefore afford to function without a crisis communication plan. Yet, many organisations still have no such plans. Many companies say they need it but think that with positive thinking and hope the inevitable will never occur. The reality is that Crises are often unavoidable. What is avoidable is being ill prepared. After all, Noah built the Ark before it rained. And, how is it possible that some companies find opportunities in the time of crises, while others succumb to the danger.
The secret is that they have a well-prepared and tested Crisis Communication and Management Plan and that all the staff, including those who will deal with the media are well trained, ready to face the crises.
Who in your organisation has had the responsibility and decision making authority to create and implement an effective crises communication plan, decide when and how to initiate media coverage – and when not to-, what to do once a crises does occur and how to ensure that the media tells your side of the story?
Does your plan cover the:
- Definition of a Crisis?
- Anticipating of Crises?
- Tips on creating a how-to-manual on developing and implementing a crisis communication plan?
- Creation of Contact lists?(And upkeep)
- The link between Emergency planning and The Crises Communication plan?
- Designating of Spokespersons?
- Determining the most effective message to communicate to the media and stakeholders?
- Maintaining Control?
- Re-establishing lost goodwill?
- Tips on how to prepare for a Crisis or a media press conference?
- Tips and guidelines on how to deal with Social Media? (Twitter, Facebook, Blog Wars, etc.)
Organisations such as Hospitals should begin their crisis plan with a vulnerability assessment in which the crisis communication team looks at the likelihood of certain kinds of crises and assesses the organizations ability to respond. Below are listed some common crises with categorisation.
Most hospitals may be best prepared to accommodate Class A and B crisis, spurred by legal requirements. However, many may be less able to manage class C, although preparation for Class A and B may ready the institution to manage its own “disaster.” However, few hospitals may be properly prepared for Class D.
The value in grouping crises is in providing a potential list of scenarios for which the hospital may prepare and document their crisis contingency plan.
- External Natural Disasters
- Potential Medical Challenges
- Severe thunderstorms
- External Disasters
- Medical Emergencies
- Building fires
- Structural collapse
- Chemical or radiation exposure
- Multiple victim accidents (Le., car, bus, train, plane)
- Disease epidemic ~ scale poisoning
- Paramilitary conflicts
- Nuclear fallout
- Internal crises / Medical Emergencies
- Disease epidemics
- Serial killer or rapists
- Staff-patient criminal actions (i.e., poisoning, suffocation)
- Multi-victim food poisoning
- Large-scale infections
- Structural collapse
- Air pollution
- Terrorist attack
- Internal Crises / Non-Medical Emergencies such as Severe disruptive union activities (i.e., slow-down, walk-out, strikes)
- Unexpected executive death
- Bomb threats
- Class action lawsuits
- Consumer demonstrations
- Malpractice and/or negligence lawsuit
- Citations by local/state/regulatory agencies
- Indictments by judicial agencies of hospital or medical staff
- Fraud or Embezzlement
- Large-scale theft
- Staff-patient abuse
- Supplier disruption (i.e., blood, food, drugs and other medicines, construction, power failure)
- Celebrity patients like Mr Mandela
- Unusual medical treatment
- Major changes in enabling or funding legislation (i.e., changes in charter conditions, cuts/ balloons in Medical aid allocations, tax exempt status, Medical aid fraud or abuse investigation).
Every hospital in a group should be prepared to deal with emergencies (other than that by the Casualty department). It is well known that the best way to prevent the spread of remorse and misinformation is by issuing factual information as soon as possible. At the same time, a hospital must protect its own interests and the patient’s right to privacy then relay factual information in an orderly, controlled manner.
That is why the hospital’s crisis communication plan should outline a procedure for communication with the media and other stakeholders. That is why your hospital’s emergency plan and crisis communication plan should be combined and tested.
An audit and benchmarking exercise could reveal opportunities for improvement and/or provide the assurance that everything is in order.
There are few kinds of organizations for which PR is more important than hospitals.
Hospitals must constantly strive to earn and keep a good reputation among doctors, patients, donors (if charitable), other funding sources and broad community leadership. If a hospital is not perceived by all stakeholders as providing quality care in a responsible manner it will fail. Because of the diversity of audiences, hospital PR must address a wide range of concerns and convey information at many levels of detail. Hospital PR also has a role in supporting the satisfaction and effectiveness of employees who perform critical tasks under difficult conditions.
Hospitals are typically among the larger institutions in their communities. Therefore, almost everything they do or say is potentially important and/or controversial. Public relations should be involved at the highest strategic levels of hospital management to help guide decision-making in ways that will help accomplish long-term goals.
My one blog article – https://deonbinneman.wordpress.com/2010/06/24/an-untested-emergency-response-plan-is-a-source-of-reputation-risk/ may also spark more debate about this.
You might also be interested in this information from my blog – I have my own product which is really a primer for starting the process of developing a crisis plan in a company – see http://deonbinneman.com/services/products/how-to-write-a-crisis-plan-toolkit/ and my blog post https://deonbinneman.wordpress.com/2009/05/26/how-reputation-event-crisis-ready-is-your-organization/ that could stimulate thoughts in this regard.
Anyway, I just thought that you might find my post and questions – thought provoking. Please access my blog for more information.
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.
A man is getting into the shower just as his wife is finishing up her shower, when the doorbell rings.
The wife quickly wraps herself in a towel and runs downstairs.
When she opens the door, there stands Bob, the next-door neighbour. Before she says a word, Bob says, ‘I’ll give you $800 to drop that towel.’
After thinking for a moment, the woman drops her towel and stands naked in front of Bob, after a few seconds, Bob hands her $800 and leaves.
The woman wraps back up in the towel and goes back upstairs. When she gets to the bathroom, her husband asks, ‘Who was that?’
‘It was Bob the next door neighbour’, she replies.
‘Great’, the husband says, ‘did he say anything about the $800 he owes me?’
Moral of the Story:
If you share critical information pertaining to credit and risk with your stakeholders in time, you may be in a position to prevent avoidable exposure.
In ancient Greece, Socrates was reputed to hold knowledge in high esteem.
One day an acquaintance met the great philosopher and said, “Do you know what I just heard about your friend?”
“Hold on a minute,” Socrates replied. “Before telling me anything I’d like you to pass a little test. It’s called the Triple Filter Test.”
“That’s right,” Socrates continued. “Before you talk to me about my friend, it might be a good idea to take a moment and filter what you’re going to say. That’s why I call it the triple filter test. The first filter is Truth. Have you made absolutely sure that what you are about to tell me is true?”
“No,” the man said, “actually I just heard about it and…”
“All right,” said Socrates. “So you don’t really know if it’s true or not.
Now let’s try the second filter, the filter of Goodness. Is what you are about to tell me about my friend something good?”
“No, on the contrary…”
“So,” Socrates continued, “you want to tell me something bad about him, but you’re not certain it’s true. You may still pass the test though, because there’s one filter left: the filter of Usefulness. Is what you want to tell me about my friend going to be useful to me?”
“No, not really.”
“Well,” concluded Socrates, “if what you want to tell me is neither true nor good nor even useful, why tell it to me at all?”
This is why Socrates was a great philosopher & held in such high esteem.
Next time someone starts gossiping, you know what to do.
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
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.
Whether you are implementing new systems, redesigning business processes, or transforming organization structures through downsizing and M&A, effective communication is absolutely critical.
A former colleague used to write, “Communication is more than the tangible vehicles and tools that convey information; it is the glue that binds internal and external stakeholders to your vision, mission, goals and activities. Effective communication engages the hearts and minds of all stakeholders.”
With regards to a change process, the objective of these communications is to move your target audiences along the following continuum with the stated effects:
- Awareness – individuals are conscious of the change
- Understanding – individuals have a shared meaning of the change
- Acceptance – individuals internalize the change and have a more favourable outlook
- Alignment – individuals provide appropriate levels of support for the change
- Commitment – individuals begin to claim responsibility and ownership for the change
This is only achieved by developing a communication strategy that utilizes multiple communication vehicles and delivery channels throughout the course of the change process. Most importantly, these communications must build upon each other to share a bit more of the story as it unfolds. It is not sufficient to make a global announcement the day before or the day the change occurs.
Here is a framework to make it easy for leaders to remember as they communicate direction to the teams they lead – The 7 P’s of High Performance:
Perspective – the big picture – the environment, market, competitors, customers needs, technology – an overview from 30,000 feet.
Problem – what is threatening (or wrong) with the current situation – what is not working as well as it needs to – where would we likely end up if we did nothing.
Purpose – what are we attempting to accomplish stated in both objective and subjective terms – what are our goals for this initiative/change process.
Principles – criteria (or critical success factors) we have used in our thinking process to insure success – the relevant guidelines we have applied.
Plan – what is our “go forward” proposition we believe will move us in the right direction – how the future will look different – how things will be different for people.
Process – an update on what steps have taken place to date – plus the next steps we contemplate in conjunction with the next P.
Participation – what necessary and important role for involvement we see for the team – stated as in :invitation” – and creating the opening for involvement from all players needed for success.
Here are some other resources and thoughts:
From the book “Nameless Organizational Change,” by Glen-Allen Meyer. In a nutshell:
- Organizations market their products and services
- Leaders (and change agents) know how to market
- Changes are given names (e.g. “Super teams 2010”)
- Named changes are hyped and marketed throughout the organization – We see this often in South Africa where campaigns have an ethnic name
- In the marketplace outside of the organization, people can say “no” to marketed products and services they do not want.
- Inside the workplace, people cannot easily say “no” to the changes that are marketed “at them”
- My experience is that most change “communication plans” are, in fact, marketing plans
- Since they cannot say “no” to marketed change, dissonance is established in the minds, psyches, and beings of people who want to say “no” but who know that, in some way, they must comply
- In addition to genuine change, this dissonance produces stress and resistance during change
- Stress and resistance to programmatic, marketed organization change causes signs of dysfunction during major change including absenteeism, turnover, accidents, tardiness and more
- These signs of dysfunction add cost and time to major change.
The “nameless” approach helps leaders implement change without the hype and without the resistance produced by marketed (i.e. “communicated”) change. A model for nameless change is presented in the book including the step-by-step process by which the change is “seeded” and “harvested” in the organization instead of being driven by complex and “slick” change marketing plans.
In short, I believe that people at work today are far savvier “consumers” of change than were their predecessors of even ten, fifteen, or twenty years ago. People “object” with the “flavour-of-the-month” objection because they’re rather well used to the methods of change being promulgated by many management gurus.
I’ve found the book ‘Communicating Change: Winning Employee Support for New Business Goals’ by TJ & Sandar Larkin http://amzn.to/a9261T very helpful but for my money Kotter’s Leading Change Book http://amzn.to/ckQtMN) is the best.
From Kotter’s principles, one can readily derive excellent models and specific instruments for promoting and monitoring change management. For a short version, there is his classic 1995 Harvard Business Review article, “Why Transformation Efforts Fail,” which cites insufficient communication as a chief cause of failed change management.
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 https://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.
The farmer replied, "There is a pond near my house that is full of frogs—millions of them. They all croak all night long and they are about to make me crazy!"
So the restaurant owner and the farmer made an agreement that the farmer would deliver frogs to the restaurant, five hundred at a time for the next several weeks.
The first week, the farmer returned to the restaurant looking rather sheepish, with two scrawny little frogs. The restaurant owner said, "Well… where are all the frogs?"
The farmer said, "I was mistaken. There were only these two frogs in the pond. But they sure were making a lot of noise!"
The problem today is that the frogs have tools to make a LOUDER noise! Blogs, Facebook, Twitter and Mobile phone messaging and on top of that just the normal word of mouth banter and soon business owners will be in the same position as the farmer above.
So, how do you cut down on the noise the frogs make?
Well, first of all do not give them a reason. That means run your business as if every day is open day. Secondly, respond rapidly if there is a problem and solve it ASAP.
Inaction, Indifference and inefficiency is normally what causes frogs to make serious noise.
Got a random call the other day from a Powerlines reader who asked me how I would critique a Crisis simulation exercise.
Here is an extract of my partial response:
I try and always facilitate a process with the group after a simulation to process the learning experience after a simulated crisis.
This involves each person providing a 2 – minute feedback about how they experienced the simulation, what they believed went well and the areas necessary for improvement as well as completing an exercise critique form.
Apart from their feedback, this is what I will be looking for during a simulation:
- Adherence to plans - I will need to review the plans beforehand, and verify adherence to plans during the exercise (but see below)
- Improvisation – cautiously review any improvised steps and assess these against:a) divergence from plans, i. e. have plans turned out to be dysfunctional, b) personalities, i.e. have individuals improvised to the benefit of the organisation
- Behaviour and personality interaction- how do people react to the challenge, albeit simulated. IMHO this is the most difficult area to look at, but it is something that must be done to reflect on people’s abilities.
- Outcome – how did the organisation perform against pre-set expectations or defined outcomes.
- Discontinuities – failed, aborted, modified exercises, or generally the underlying reasons for an exercise that went wrong.
What do you look for?
There is a full page spread today on page 16 of the Star newspaper featuring an advertisement by Aspen Nutritionals entitled ‘’ASPEN’s S26 ASSURANCE OF QUALITY’’
Obviously such an advertisement is costly, but what is more important? Protecting your Reputation or the cost? The advertisement clearly spells out what makes the product great.
See also statement: Aspen Pharma – News Room – Quality of S-26 in South Africa Guaranteed http://bit.ly/T2JG2
The Tanzanian Health authorities recently withdrew S26-1 from the market in that country following 4 complaints regarding the quality of the product. The advertisement spells out the reasons – possible counterfeiting and non-adherence to required storage conditions. It further states that Aspen is actively investigating the matter and will take measures required to ensure the matter is managed.
This example offers a number of lessons for companies and Leaders:
1. Is your company prepared for a crisis? Crisis can come in many shapes and sizes, from life safety to product safety crises to just plain allegations and rumours. Have you done your homework about what could go wrong and planned the relevant response? Realise that planning for a potential crisis, actually start when you launch a product.
2. In any crisis, there are a number of communication challenges. Have you planned your messages and with whom you need to communicate and on what basis?
3. Has your organisation actually simulated, tested and had your crisis plans audited by a 3rd party to provide objective oversight?
Research shows that those companies who respond quickly and decisively in a crisis**, weathers the storm best.
How prepared are you?
** REPUCOMM – my consultancy has a Crisis Management & Crisis Communication Toolkit available for purchase. This toolkit available as a download or on CD contains all the necessary information to design, develop, write and test a crisis management & crisis communication plan. It provides a fast start and could make the difference between failure and success.
Depends though on a simple premise. What do you cherish the most – Your Reputation or the cost involved in planning and prior preparation?