Sometimes bad things happen to good companies. A company’s response during the first minutes and hours of a crisis can enhance or destroy brand equity, literally turning a “good” company into a “bad” one in the eyes of key audiences. Getting it right is not happenstance.
A crisis shifts perceptions. It happens fast because key stakeholders expect to know you are aware of the problem and working to resolve the situation the minute they learn of an incident.
Companies fail during a crisis because of poor strategic, tactical or logistical planning, lack of team preparation or poor execution. Being “crisis ready” is one of the most important investments a company can make in its long-term success. Research indicates that every organization has an 80% chance during any five-year period of facing a crisis that will negatively impact brand equity by 20%. The odds are not on your side unless you have a readiness mindset. Crisis preparedness is the best defense against seeing the inevitable turn into the insurmountable.
During more than 50 years of working with hundreds of clients in crisis situations, the Mower PR & PA Group has identified key factors that determine how rapidly companies contain and emerge from potentially damaging situations. Like an insurance policy you hope you never have to use, advanced preparation is critical. The graveyard of brands destroyed by crises is filled with “good companies” that failed the readiness test.
What are the primary failure points for organizations in crisis? High performance organizations tend to crush the competition when it comes to strategy, tactics and logistics. It is no surprise that organizations that succumb to pressure during a crisis fail to execute in one or more of these areas.
Strategic: “If you fail to plan, you are planning to fail” is an axiom that outlines the most prevalent blunder companies make in a crisis. You might have a dusty binder labeled “crisis plan” somewhere in your office or stored as a PDF on you company network. That places you ahead of around 40% of companies without a crisis plan. Ask yourself three basic questions to test your readiness:
Has your leadership team discussed things like crisis-response protocols, disaster-recovery plans or crisis “what ifs” at one of their recent meetings?
Do you have a designated crisis team that includes key organizational functions?
Have you ever conducted a drill bringing company leaders together for a tabletop crisis simulation?
For most companies the honest answer to one or more of these questions is “No.” A commitment to preparedness is a strategy that pays dividends when a crisis strikes. It can even help organizations identify and mitigate issues before they reach the crisis stage.
Tactical: Often companies fail during a crisis because they lack monitoring capabilities, including social media scanning or employee exit interviews to spot potential issues. Culturally, creating an atmosphere where employees are empowered to raise safety, environmental and other issues can help identify problems before they escalate.
Establishing a crisis response team is critical. Having a crisis team leader, typically not the CEO, responsible for maintaining readiness, convening the team, declaring a crisis and coordinating the response is essential. The crisis team leader can be another member of the C-suite or high-ranking member of management who is respected in the organization and has the authority to act when minutes count.
A well-built and regularly drilled crisis team will come together quickly and provide meaningful advice, measured thinking and consistent decision making. Appointing a crisis team leader—a battlefield commander—to make the tough calls will save critical time and prevent organizational paralysis.
Logistical: Logistical failures come in two basic varieties. The first involves the failure to prepare frontline managers to recognize and report a potential crisis during the early moments. Most managers in remote locations know to call headquarters when there is an incident that requires a police, fire or emergency medical response. But what about “smoldering issues” that a frontline manager might consider “no big deal.” They may believe that they have it handled. Perhaps they feel reporting an incident might hurt their career. Or they simply did not recognize the situation might attract the attention of critical stakeholders. Involving frontline managers in simulation drills will give them a clearer understanding of what to do when they encounter an issue.
The second common logistical error is the failure to build a crisis-response infrastructure. Creating the essential operational backbone needed when a crisis strikes can save the day and limit reputational damage. The infrastructure you create may involve local first responders, remote access to the company’s website and social media channels, networks of trusted industry and business partners, and technology tools that make communicating easy and simple even if key corporate systems are down. The pandemic means most of us have become proficient in working offsite and using online remote meeting platforms. Having the logistical capabilities to reach key executives or convene the crisis response team if your corporate email and phone system suddenly went down is critical.
Unforced strategic, tactical and logistical errors are preventable. Most out-of-control crisis situations are the result of a failure to plan, prepare and execute efficiently when a crisis strikes. This core responsibility should be on the agenda in every board room across America.
Rick Lyke, APR, is Executive Vice President with the Mower PR & PA Group, which offers reputation management services, media training and crisis simulation workshops for clients.