Crisis Communications: What to Do When a Company Finds Itself “Under the Microscope”
By: Dina Mostovaya
Tags: Pr, Communication

The right reaction to a challenging situation can save a company’s reputation -and even its business.

According to Timothy Coombs, a scholar of communications from the University of Illinois, it’s not hard to recognize a crisis: it involves an element of surprise, a threat to reputation, and a limited timeframe in which to make a decision. About 35% of such situations are born in online media, and a slightly fewer cases in social media. But it’s this second type of media where the “fire” flares up with greater speed and intensity.

Telegram messenger, for example, has a citation rate higher than some of Russia’s leading media. Regardless of the source, a company has a maximum of 24 hours to react and handle things correctly (but it’s best when the timeframe is just 1–2 hours).

Keeping ahead of the game

First of all, you need a strategy — both for the company’s speaker and the company as a whole to use in a time of crisis — and it shouldn’t be too difficult to prepare one. According to a study by the Institute for Crisis Management, just 14% of all crises faced by businesses are actually unpredictable. The remaining 86% can be foreseen and, if not forestalled, then at least prepared for.

The standard approach is to create a scale of potential reputational risks, distribute the possible crises along the scale, describe solution algorithms, define the areas of responsibility, prepare a list of speakers, and think through the statement formats and rules of conduct. Without such a strategy, you’ll be forced to improvise… and that may create substantial damage.

For example, Consider the fire that broke out in the tunnel between France and Great Britain in 1996. The president of Eurotunnel called the event an “unpleasant incident.” However, several hours later, the company’s management team used the phrase “serious incident” in its communications. The media immediately picked up on this difference in assessment, and it impacted the behavior of passengers, who began to forgo trips via the tunnel in droves. Consequently, the company endured significant financial losses. After analyzing this case, crisis communications experts agreed that Eurotunnel made a mistake in how it communicated the nature of the incident.

In 90% of all cases, a well-prepared speaker can nip a crisis in the bud and prevent the situation from spiraling out of control. Nevertheless, it’s important to choose carefully who articulates the company’s position, and manage how they do it. In the end, this will define more than the audience’s perception and media’s reaction: a knee-jerk statement can often lead to far worse outcomes.

How to prepare a speaker

There are five key steps to follow:

1.Get to know your speaker. Speak with them often about sensitive issues, and get a sense of their outspokenness and flexibility.

2. At least once a month, hold a media training session. PR and external communications usually account for 10–15% of a speaker’s work, so it’s necessary to regularly update all information.

3. Practise, practise, practise. Prior to every interview and live broadcast, request topics or questions from the journalists, and practise the answers with the speaker. No exceptions! Even if it seems that the speaker knows the answer to a question by heart.

4. Talk with the speaker as often as possible. I constantly point out the sticking points, and openly stress: “You do understand that such things can’t be said publicly, right?” This helps me to save them from making mistakes.

5. Keep abreast of communication trends and relate them to the speaker. Sometimes I make a short presentation with cases, to show the way public and media react to certain issues.

If possible, I recommend being present at the interview, listening to the speaker, and emphasizing the points that require special attention. And don’t be afraid to interrupt during a live session. Once, a top-tier media journalist asked an improper question of my speaker; both a positive and a negative answer would have compromised the company’s reputation. I intervened and asked the journalist to re-phrase the question.

After the event, you should analyze each minute of the interview together with the speaker, and identify what went well and how they could improve.

How to handle a crisis

It’s important to act both quickly and correctly. Sometimes, a lack of action leads to serious consequences.

For example, Intel Corporation encountered a crisis situation in 1994, when a bug was discovered in its Pentium processors. Intel’s representatives claimed this was no big deal, underplaying the importance of the issue, and didn’t offer any replacement. As a result, the problem garnered national attention, and IBM halted the sales of Pentium-based computers. A month and a half went between the discovery of the bug and a large-scale blowup of the problem, but the company failed to react to this red flag. It wasn’t until IBM ceased its orders for Pentium processors, and Intel’s reputation seriously suffered, that the corporation’s president Andy Grove made an official statement, taking the blame and offering an apology. The processors were replaced. This story had cost Intel $475m, over half of its profits in the last quarter of 1994.

These actions are an example of how things shouldn’t be done. A company’s reaction has to be immediate and precise; clients, journalists and employees should not have to figure out what you meant. The official statement should be issued within an hour or two of the incident. The message should also be universal across all channels: in the press release, on the corporate site, in the company’s social media and the speaker’s personal Facebook page.

I recommend the following step-by-step process:

1.Organize an emergency press briefing as soon as possible: this will permit you to control situation. Broadcast the briefing on the corporate website and on social media pages.

2. Establish a communication headquarters with a speaker, a timetable of news publications, a single channel for collecting information, and a team.

3. Come to terms with the idea of working with no days off.

4. Connect to the company help desk platform: this will allow you to collect incoming messages from all communication channels in one place and to react immediately.

5. Remember your partners: clients and journalists are not your only audience. You need a separate communication for franchisees, sponsors, and partners. Don’t wait for contracts to be terminated… set up an appointment preemptively, or make a statement.

Learn from the best

The right actions help to take the heat out of a situation.

In January 2016, the Russian tennis player Maria Sharapova failed a doping test during a tournament in Australia and was suspended for 2 years. As soon as the athlete discovered the reason, she organized an emergency press conference that was broadcast on her website. For ten years, Sharapova had taken Mildronate, a medication recommended to her by her family doctor. It contained meldonium, which that year was added to the list of substances banned for athletes. This is why her doping test came back positive. Having realized this, the athlete shouldered the responsibility, defending her doctors: “It’s my body, and I’m responsible for what I put into it.” As a result, her fans launched a large-scale campaign in support of the tennis player. Sharapova’s example shows that a swift reaction helps to avoid rumors and to put yourself in a better position.

Sometimes companies decide to lose money but keep their clients’ loyalty: as in the case of Starbucks. Two African Americans wanted to use the bathroom without buying anything. The coffee house’s employees said no, and asked them to leave the premises. The men ignored this request. Police were summoned to detain them, and a video of the incident was uploaded online where it was seen by 9.8 million people. The public reacted to the incident, deciding it was a result of racism. Protesters began to gather near the store. However, Starbucks’ management made a public statement, and also closed all of its U.S. stores for a one-day training session on customer service. Journalists calculated that this cost Starbucks $20M, but customers had a positive reaction to the measures that were taken.

But even brand giants still make serious blunders. In 2017, a passenger was forcibly removed from a United Airlines airplane to provide a seat on a sold-out flight to an airline employee. A video of the event went viral on YouTube, inciting angry, negative comments. The company management apologized for the inconvenience, but tried to shift the blame to the regulator. Journalists requested comments on the use of force from the airline, but were advised to go to the police instead. Consequently United became the object of derision, and its capitalization fell by at least $600m. Two full days later, the company finally found the right words, but the initial poor crisis communication led to financial losses and possible reputational damage.

Five common mistakes

Mistake №1: bury head in the sand and keep mum. In 2016, one of Great Britain’s largest sandwich shop chains, Pret a Manger, found itself embroiled in a scandal due to incorrect food labeling. The packaging on a baguette sold in a Pret a Manger store didn’t state that it contained sesame, causing a teenage girl to have an allergic reaction which led to her death. The company declared that it did everything by the book, and took no action. This caused a flurry of negative reactions online and accusatory articles in the media. As a result, consumer trust in Pret a Manger plummeted by 20%.

Mistake №2: suddenly tackle problems that were not of interest before. If you had no interest in environmental protection prior to a crisis situation, don’t try to move the public with a new approach.

Mistake №3: a laissez-faire approach to clean-up operations. It’s important to take personal action. In 1982, a tragedy happened at Johnson & Johnson: somebody added cyanide to the production process of a trusted medication with a 30-year pedigree. Seven people died. The event rocked America and received wide coverage in the media. The company removed the medication from circulation, opened a hotline, and announced its own investigation. A large reward was offered at the press conference for help in catching the terrorist that committed this act. The company’s reaction was added to MBA textbooks as an example of successful crisis management.

Mistake №4: conceal the details, falsify information, assume the role of victim. Such an approach always creates a negative backlash; if you want a positive reaction, you need a sincere acknowledgement and apologies.

Mistake №5: allow an unprepared speaker to talk to the journalists. Sometimes a company’s PR team mistakenly thinks that the more influential the person to issue the statement, the quicker the problem will be resolved. But it doesn’t work like that. An influential but unprepared speaker may impart unintended scale to the event, bringing a local incident to global attention. The speaker should also avoid becoming a direct source of news without the PR team’s involvement; failing to take a unified stand in the company may also lead to negative consequences.

Check list of necessary steps to take in crisis situation: