Anatomy of a Crisis Response

8/3/2019 Anatomy of a Crisis Response

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ANATOMY OF A CRISIS RESPONSE: A CHECKLIST

A recent, informal study of more than a dozen multinational corporations reveals that top

company executives respond to crises with a relatively universal order of behavior.Public relations professionals, therefore, who understand the way these executives

navigate their organizations through a crisis will be more effective at counseling topmanagement and implementing corporate strategies should a crisis hit. Moreover,

studying this common response may even reveal options not altogether obvious underpressure and stress at crisis-time.

Order of Action

The telephone study reveals that the principal considerations and steps for responding to

a crisis are similar for almost all companies. They include, in order:

Responding to the actual event, primarily to people's needs (victims', employees',

owners') and to the situation (contain the problem, establish safety parameters,assess and respond to damage);

Notifying required government agencies and appropriate manufacturers orvendors;

Establishing internal procedures for managing the crisis until it is resolved.

Communicating and addressing internal and external concerns and issues,including employee communications, customer/vendor communications,

community relations - among them, community perceptions, legal questions, and

corporate responsibility issues, and media relations. (Note that media relations

appears at the end of the chain of executives' initial concerns, in marked contrastto the media's demands to be informed early in the process.)

Executive Response

Interestingly, the study also reveals a common pattern of attitudes, behaviors, and actions

exhibited by executives within corporations in crisis. Managers, it seems, pass throughfour distinct phases as they accommodate, deal with, and resolve the disaster situation:

RECOGNITION. There may be smoke, an explosion, a telegram, or an unexpected media

call, which, along with the knot forming in the executive's stomach, indicates that a crisis

is underway. The recognition phase progresses in stages, which, when completed, lead toinformation control and management.

Surprise. The sense of helplessness and irritation is immediate and frustrating.

Also comes a sense of grief and a feeling of dread in knowing that the worst may

not yet be known. Concentration. A leader is identified, a steering group chosen, and the group sets

to work. The information and decision structure for this group often follows the

army's field medical-crisis management configuration:


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o Fire control: to handle spot information problems, some of which can be

quite serious.

o Police control: to keep proprietary information secure and control access

to property, people, and facts.

o Medical services: to treat and minister to the corporate body to ensure that

it survives its current injuries. Containment. Internal processes freeze as managers try to understand what has

happened and what it all means.

Control. Unlike other types of events, the speed of actions in a crisis doesn't allowthe media time to develop other sources; they must rely on corporate or

government authorities for information. Managers come to recognize that, used

effectively, this control can be a critical operational advantage for effectivecommunication. When the corporation doesn't talk, though, credibility with the

media breaks down.

DEFINITION. With successful completion of phase one, executives are better able to

manage information. Now they must move toward managing attitudes. The definitionstage helps create an atmosphere for truthfulness, where the reality of the situation can be

digested in preparation for action.

Fear. Executives reach the healthy realization that matters are extremely serious:

people are affected, threatened, perhaps even dead. They anticipate the upcomingissues of responsibility, even blame.

Facts. Managers' need for information grows. They must understand what has

happened before the organization talks to - or decides whether to talk to - anyone.

Focus. Work is begun on specific tasks, while extraneous ideas, actions, and

distractions are intentionally minimized.

STRATEGIC PLANNING. All eyes now turn toward resolving the disaster with minimal

disruptions in service, revenue, and facilities. Appropriate internal and external resourcesare called to help maintain the organization's reputation. These include everything from

building support among key audiences, to controlling and coordinating corporate issues

and messages, to keeping peace in the corporate family and keeping the channels ofcommunication open and active. Plans begin to come into focus. Managers consider how

to publicly react, counteract, initiate, and preempt; keep issues and questions focused and

localized; prepare for opposition or adverse reception of messages; monitor the media,

forcing balance by correcting the record when necessary; bypass the mass media withdirect communications; and track effectiveness of the communications strategy. Three

processes are involved:

Forecasting. Surprises can be virtually eliminated if all aspects of the disaster are

anticipated. Even if the worst doesn't happen, the company can move through thecrisis more smoothly. Moreover, forecasting can set the scope of the media's

speculative playing field.


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Facilitating. Topics for discussion and communication pipelines are identified.

Audiences are put into priority and alternative scenarios are explored. The

corporate bureaucracy now moves from reflection to action.

Follow-up. Procedures to tie up loose ends are also put into place, as executives

look to mark the end of the disaster.

REACTION. Response strategies and specific spokespeople are finalized. Execution of

the plan begins. Experience suggests that spokespersons and responses must have theseunique attributes to deal effectively with the crisis:

Stoicism. Those involved must remain impassive to the excitement and tension of

events.

Steadiness. Rock-hard concentration for spokespeople is, not surprisingly,imperative.

Stamina. Crises can last for hours or, less commonly, for years. Those involved

must accommodate fatigue and retain their responsive edge at all times.

Sensitivity. Understanding the people, politics, and problems involved, as well asthe ramifications of corporate and individual actions, are key for getting through

the crisis. Though many spokespeople have a sense of message (i.e., What am Igoing to say?), successful spokespeople also must have a sense of audience,

conveying that the organization cares about individual needs. It can be as simple,

for example, as making sure that employees and supervisors get their informationahead of outsiders.

LESSONS LEARNED #2

REGAINING PUBLIC CREDIBILITY FOLLOWING A DAMAGING

SITUATION

How a Relatively Simple Product Problem in Europe Turned Into an Avoidable

Career-Defining Moment for the Chairman of Coca-Cola

Experience teaches a powerful pattern of operational decision making and corporate

behavior that can quickly restore credibility in damaging situations. A positive, rational,

response strategy, coupled with seven key operational steps, is required to begin promptlyrehabilitating trust and credibility. All seven steps need to be completed in a prescribed

order. It is their order and the velocity of action that make the approach so strategicallypowerful.

The response strategy is: first, resolve the problem itself; second, deal with those mostdirectly affected and victims; third, answer employee questions and help employees

understand what's going on; fourth, involve those indirectly affected, neighbors,

colleagues, partners, government officials; lastly, accommodate the self-appointed, self-


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anointed including critics, the media, competitors with a point of view, and public

commentators. Action within minutes of crisis recognition is crucial.

The Coca-Cola European contamination scare, which occurred during the last half of1999, is an excellent example of what happens when this established set of steps is

ignored, delayed, or short circuited. Rule #1 of crisis management is that virtuallyanytime there is a threat to people's health and safety - whether the situation occurs in

South Africa, south Boston, Trinidad, or Toledo - a full scale, no-holds-barred response isrequired. The bigger the brand, the more powerful and prompt the response has to be. A

useful way of analyzing and learning lessons from situations like Coca-Cola's is to do

what I call an "expectations analysis." Simply stated, this is an approach that compareswhat a directly affected public, constituency, or victim group expects to the company's

proposed or actual behaviors. This analysis produces some self-evident lessons in both

crisis management and crisis communication management.

COMMUNITY/VICTIM/PUBLIC

EXPECTATIONS

COCA-COLA'S RESPONSE

1.Candor: Outward recognition, throughpromptly verbalized public

acknowledgement (or outright apology),

that a problem exists; that people or groupsof people, the environment, or the public

trust is affected; and that something will be

done to remediate the situation.

No acknowledgement at first. Cokeappeared to be unconcerned that

hundreds of children were made ill

and that its product was theprobable cause.

Chairman/others finally take notice

14 days after the first warning that

incidents occurred.

2.Explanation (no matter how silly, stupid,

or embarrassing the problem-causing errorwas): Promptly and briefly explain why the

problem occurred and the known

underlying reasons or behaviors which ledto the situation (even if we have only

partial early information). Also talk about

what you learned from the situation andhow it will influence your future behavior.

Unconditionally commit to regularly report

additional information until it is all out, oruntil no public interest remains.

Coke's response was always in

terms of quality - that quality wasthe #1 issue. Since quality was

never higher, it was unlikely that

there was a problem with theproduct.

Coke claimed these were isolated

incidents.

Coke said drinking the tainted soda

could cause headaches, nausea, andcramps, but didn't present any

health risk.

3.Declaration: A public commitment anddiscussion of specific, positive steps to be

taken to conclusively address the issues

and resolve the situation.

The head of Coke's Frenchpackaging and distribution unit

stated, "It has been formally

established that the drink itself is


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without fault. Its quality is

irreproachable."

There were problems with mold, a

coating on some of the shipping

flats, and other issues.

4.Contrition: The continuing verbalizationof regret, empathy, sympathy, even

embarrassment. Take appropriate

responsibility for having allowed thesituation to occur in the first place, whether

by omission, commission, accident, or

negligence.

Coke issues a formal publicapology on June 22, seven weeks

following the first incidents of

illness.

Coke's real commitment to

resolving the issues comes more

than five weeks after the initialseries of illnesses.

CEO Ivester's July 1 letter to

shareholders begins "You havelikely heard about . . . [Coke] is

focused on quality, customer

confidence, . . ."

Coke made no early mention ofcompensating those who became

ill.

5.Consultation: Promptly ask for help and

counsel from "victims," government, and

from the community of origin - even fromyour opponents. Directly involve and

request the participation of those most

directly affected to help develop morepermanent solutions, more acceptable

behaviors, and to design principles and

approaches which will preclude similar

problems from re-occurring.

Coke blamed uncooperative

bottlers; advice the company got

from government; and media thatblew the problem out of proportion.

6.Commitment: Publicly set your goals atzero. Zero errors, zero defects, zero dumb

decisions, and zero problems. Publicly

promise that to the best of your abilitysituations like this will never occur again.

Coke warns investors that "secondquarter earnings will be hurt due to

temporary product withdrawals . . .

some losses covered by insurance . .. the worst is behind us," said

Ivester.

7.Restitution: Find a way to quickly pay

the price. Make or require restitution. Go

beyond community and victim

"One day soon every Belgian will

get a free, ice cold Coca-Cola to

help forget about a health scare


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expectations, and what would be required

under normal circumstances to remediate

the problem. Adverse situations remediated

quickly cost a lot less and are controversialfor much shorter periods of time.

related to the famous soft drink,"

Coke Chairman M. Douglas Ivester

promised.

Epilogue: Just as the contamination episode began to fade from view at the end of 1999,

it was revealed that Coca-Cola might test a pricing scheme that would raise the price of

the soft drink in certain circumstances when its "marginally utility," according to Ivester,was more valuable (like during hot weather). Who needs enemies?

The Big Lesson: Despite months of embarrassment and gaffs culminating in the

"surprise" resignation of Coke's chairman, the soft drink's loyal customers appeared as

committed to the drink as ever. The dramatic changes now going on at Coke would havefar less visibility had the European situation been handled more positively, promptly, and

conclusively. Reputation is created from the inside out. Senior managers must be able to

recognize and proactively prevent the predictable risks and threats that arise from time-to-time. Active daily management of the company's identity, especially when obvious

social, ethical, and reputational risks are involved, is one of the principal responsibilities

of the most senior managers. Minimizing this responsibility can redefine careers when

bad things happen.

James E. Lukaszewski, APR, Fellow PRSA, is a specialist in managing tough, touchy,

sensitive situations for very large businesses and organizations worldwide. He teaches

crisis management strategy at New York University's School of Continuing andProfessional Education where he is an adjunct associate professor.

By James E. Lukaszewski,APR, Fellow PRSA

As Published inPBI Media LLC's PR News, February 28, 2000

Copyright 2000, James E. Lukaszewski. All rights reserved.

Copyright 2000, James E. Lukaszewski. Permission granted to reprint with attribution.

By James E. Lukaszewski, APR, Fellow PRSA

As Published inPublic Relations Journal, November 1987 (Revised June 2000)

Copyright 1987, 2000, James E. Lukaszewski. All rights reserved.

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Anatomy of a Crisis Response