How many crises can you list off, from say the past 25 years? JFK assassination, Challenger 1986, Exxon Valdez, Enron, Martha Stewaert, 9/11, Tylenol, Peggy’s Cove, Katrina, Perrier, Pepsi, Nike, Virginia Tech, Chernobyl…
Feels like a bottomless list, doesn’t it?
Although all uniquely devestating in their own way, crises do have the following in common:
- the element of surprise
- insufficient information
- the quick pace of events
- intense scrutiny
A crisis is formally defined as a major catastrophe that may occur either naturally or as a result f human error, intervention, or even malicious intent. (Paul. A. Argenti).
Argenti, the author of Corporate Communicaitons, also states that a crisis can include, “tangible devastation, such as destruction of lives or assets, or intangible devastation, such as the loss of an organization’s credibility or other reputational damage.”
No matter how you slice it, a crisis is going to to have significant impact on the financial well-being of the company and the image and reputation of the organization.
The pathology of crises
A crisis will most likely occur because of:
- human-induced (negligence or victimization)
- natural disaster
- confrontation (see Wikipedia for some great examples of this!)
So where does communications come into all of these. We understand what can cause a crisis (pathology) and what happens when one occurs , but where do things get so out of control that communications is the only saviour to the whole ordeal?
It’s called the spiral effect. Here’s what happens:
The element of surprise leads to a loss of control…making it hard to think strategically when overwhelmed by unexpected outside events…add the media frenzy, which can prompt a siege mentality to ensure, causing management to adopt a short-term focus…attention then shifts from the business as a whole to the crisis along…forcing all decision making into the shortest time frame.
What Argenti has done here is identify the exact reason why a crisis communications plan is essential.
A look back at Tylenol
In 1982, 7 people died after taking Tylenol capsules that had been laced with cyanide. At the time, Tylenol had close to 40% of the over-the-counter market for pain relievers. Within days of the first report of these poisonings, sales dropped by cose to 90%.
Wow. Major crisis.
Johnson & Johnson’s swift and caring response was primarily resonsible for turning this disaster into a trimph for the company. And despite losses exceeding $100 million, Tylenol came back from the crisis stronger than ever, within a matter of years.
J&J documented their lessons learned as follows:
- The company did not simply react to what was happening: it took the offensive and removed the potentially deadly product from shelves ($1 million bottles recalled)
- J&J leveraged the goodwill it had built up over the years with constituencies ranging from doctors to the media and decided to try to save the brand rather than come out with a new identity for the product
- J&J reacted in a caring and humane way, rather than simply looking at the incident from a purely legal or financial perspective. Thousands of employees made over one million personal visits to hospitals, physicians, and pharmacists around the nation to restore faith in the Tylenol brand name.
If this sounds like a truly unique situation, it is. Part of what kept Tylenol alive was Johnson & Johnson’s credo.
What? A credo? Really…
Here’s what they did. When the chips were down and the company needed to find a way to address the crisis, they took hold of the brand and the values it was built on, and hugged them close. Then closer, then even closer. You see, brand values are your life preservers in a crisis: they are not what you abandon as you scramble for resolution and damage control, they are what you adhere to and follow like a light in the dark.
J&J’s credo is a 308-word company-wide code of ethics created in 1935 to boost morale during the depression. It was even carved in stone at the company’s headquarters in New Jersey.
We believe our first responsibility is to the doctors, nurses, and patients, to mothers and all others who use our products and services.
J&J used the principles of its credo to guide the company’s actions during the Tylenol crisis, helping executives to react to tragedy without losing focus on what was most important. As a result, the perception of the J&J brand strengthened. One executive said:
We had to put our money where our mouth was. We’d committed to putting the public first, and everybody in the company was looking to see if we’d live up to our pretensions.
Well, they did. And the public rewarded them for it. Within 3 months of the crisis, J&J regained 95% of its previous market share.
Planning for crisis
Early detection is key for crisis communications planning. This is where I emphasize, once again, the importance of conducting a SWOT analysis to identify vulnerabilities.
Risks assessments are particularly important for industries that are more prone to crisis (pharmaceuticals).
- Call a brainstorm session of senior managers and representatives from areas most likely to be affected.
- Develop ideas about potential crises: be creative and open-minded, no matter how outrageous.
- Create an inventory of possible crises and rank potentials then assign probabilities (FYI…Argenti tells us that Exxon was given a very low probability score. Hmm. Interesting)
- Determine which constituencies would be most affected by the crisis, then rank and respond to each.
- Set communication objectives for potential crises. Communication takes on more importance than action when the crisis involves more intangible things such as loss of reputation, rather than loss of lives.
- Analyze channel choice and create communication objectives for each constituency and determine best channel for delivery.
- Assign a different team to each crisis: different problems require different kinds of expertise so avoid senior level executives in charge of communications for all crises.
- Plan for centralization (hello, Perrier!). The approach must be completely centralized to help strip away bureaucracy and keep lines of communication open. It also helps dissipate conflict.
Really, it’s very similar to any other communication plan. You are identifying key constituencies and choosing the best available channels for message delivering, and measuring results against stated objectives.