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Crisis Management

Monday, November 1, 2010 - 08:39

Managing reputation in the event of crisis starts well before any calamitous event, writes Brian West.

Toyota, BP and the Australian Wheat Board are just some of the industry giants that have had cause recently to pick up the pieces of their damaged credibility thanks to an event, the subsequent crisis and intense public criticism.

Regardless of how well established a business's reputation is, its standing with customers, partners, suppliers, employees and government can unravel with astonishing speed.

The importance of being prepared and to expect the unexpected are valuable lessons, but many companies are stalled when managing public relations issues.

Burson-Marsteller's own research revealed that 29 per cent of CEOs (and 50 per cent of CEOs from larger companies) have experienced a crisis in the past few years; but only 30 per cent believed they handled the crisis very well.

This suggests that the threats of intense media and political and public scrutiny are no longer an occupational hazard exclusive to politicians and government officials.

Business is increasingly being held to account for their actions by restive stakeholders and affected communities with high expectations, and a media ever ready to show interest at the first sign of trouble.

Although complete immunity from risk and shock is impossible for any organisation, a robust public relations strategy can uncover potential risk blind spots. However, in order to reap the benefits of such insight and planning, businesses need to rethink the way they use public relations.

Start with structure

The first place to start in preparing to manage reputation is organisational structure. Failure to incorporate a public relations perspective into organisation-wide management can increase risk.

Viewing an organisation through the lens of uncompromising media, political and public scrutiny is likely to uncover additional strategic and operational weaknesses and vulnerabilities. It is, therefore, a structural necessity that the public relations manager has the ear of the CEO and is part of the executive management group.

Integrating the PR function with other business units that are also at the coal face of managing risk will boost an organisation's immunity to shocks and help prevent issues from evolving into crises. For example, four of the world's largest oil companies are spending more than $1 billion to form a joint venture to create a rapid response system to deal with future oil spills in the Gulf of Mexico.

Public relations managers at the companies involved should be entrenched in the construction of the strike force. PR input will enable the immediate activation of public engagement channels and activities in the event of another spill, which will minimise the political and community backlash.

Make the investment

Once a sound structure is in place, companies should then ensure that they invest resources in preparing for PR storms. Too often, detailed issues-management efforts make way for the relentless pursuit of more positive media coverage. However, a positive public profile may evaporate quickly unless an organisation can prevent or minimise the impact of a crisis.

Plan for the unexpected

Organisations should also expect the unexpected and then plan for it. They need to prepare for unlikely events as well as the more familiar, ongoing issues. Low probability events can have enormous impact and should be accounted for where possible. Think volcanic ash shutting down airports across the northern hemisphere; an oil leak lasting months; and aircraft being flown into skyscrapers.

Devoting scarce resources to preparing a comprehensive public relations strategy for highly unlikely events may not sound economical, but consider the return on investment if the unthinkable did occur and your organisation had the capacity to respond swiftly and in a manner that conveyed a degree of command and control of a situation.

There is also more to issues preparedness and management than simply producing charts outlining crisis response reporting lines, key message documents and holding statements. Once a sweep of the organisation has been undertaken to map risks, pre-emptive actions to soften the ground and engage with stakeholders should be assessed.

Listen and learn

As an issue or crisis unfolds, it is imperative that an organisation adjusts its approach to meet the changing circumstances. PR can play a valuable role in relaying the sentiment from key stakeholders, such as the media, back to senior management to inform their response. An ear to the ground will help an organisation navigate the turbulence ahead and ensure that its pronouncements are relevant and accessible.

Play the long game

Following a crisis, there is a tendency for organisations to unwind issues management and related PR activities too quickly. A false sense of security can easily prevail as media and stakeholder attention subsides.

It is crucial for organisations to maintain their diligence in addressing the issue and proactively communicating these efforts through multiple communication channels for months and possibly years ahead. This approach will also help to consolidate any positive momentum that has been achieved.

PR limitations

Although many crises are first operational problems, inadequate communication contributes to the breakdown of public trust in the company. Once trust is broken, it is difficult to regain control of the agenda. A company's damaged public profile undermines its capacity to effectively manage short-term issues and begin the long-term work of rebuilding its reputation.

PR alone cannot douse the flames of corruption, faulty operations, misguided adventures or plain incompetence, but it can help identify weaknesses and vulnerabilities, improve organisational preparedness and reduce the impact of an issue or crisis. All of which ultimately helps to protect a business's bottom line.