Before the disaster strikes
A developed and on-going crisis communications strategy is a vital part of the risk management and business continuity planning mix, suggests Damian Coory
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| Coory: A pre-planned crisis strategy is vital |
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 Henry Kissinger once said 'an issue ignored is a crisis invited' and good crisis prevention involves sound on-going issues management
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Most companies in the Asia Pacific region have excellent financial risk management, operational crisis management and compliance policies and systems.
But they often forget one very important part of the equation: Crisis Communications Management, or what is sometimes known as Reputational Risk Management.
Oxford University research into the impact of crises on public companies’ share price shows clearly that those who face a crisis will either emerge with their stock price roughly 10 per cent higher or 10 per cent lower than when they went in.
They will either emerge as a “winner” or a “loser". Which outcome it is depends on one over-riding factor: how well the management team was perceived to be handling the situation.
Doing a 'good job'
In order to be perceived as having done a good job, obviously the company needed to have good operational crisis response.
But here’s the crunch – even those who did have good risk management in place came out losers if they failed to communicate properly.
In the absence of pro-active communications in a crisis, stakeholders don’t assume that everything is under control. Put bluntly, they assume the worst.
We all know how hard it can be to motivate management to successfully execute a proactive communications programme when the subject matter is good and there’s plenty of time to prepare.
Imagine how difficult it is when an organisation is in crisis, everyone is stressed and there is no time to think. That is why being prepared is essential.
Effective crisis communications involves three core elements: crisis prevention, crisis communication preparedness and crisis communication response.
1. Prevention
Step one in this part of the process is an audit of all the risks a company may face. Your Employee Health and Safety team should have a good idea of what the operational risks are that your business faces.
An audit may already have been done as part of the operational crisis management process. But, your risk audit does not stop with “things than can go bang”. Consider financial risks, reputational risks and legal and compliance risks as well by engaging a wider group of colleagues in your audit.
Once this part of the process is complete, it is time come back home to your public affairs/PR base and consider how well you manage issues.
Henry Kissinger once said “an issue ignored is a crisis invited” and good crisis prevention involves sound on-going issues management.
This involves building and maintaining strong relationships with key stakeholders (general corporate reputation work) and identifying, managing and monitoring issues related to the company and its business.
The goal is to manage issues - and relationships - continuously. This ultimately prevents them flaring into crises and ensures that if a crisis does occur, you have the most goodwill possible with each stakeholder to help mitigate any resulting reputation or brand damage.
2. Preparedness
It is not uncommon for companies to emerge from a crisis with a better reputation than when they went in.
Consider the troubles that faced New York Mayor Rudi Giuliani prior to 9-11. His heroic leadership in the face of the tragedy radically altered his reputation to the extent that he became a viable candidate for the presidency of the United States.
This paradox exists because management teams who respond well to crises often impress investors, government, the media and the community so much that their respect and support for the company rises dramatically.
Perceptions shift, positively, and hold long after the crisis has subsided. Of course, this principle also applies equally in reverse in the event of a poor crisis response.
Good performance always comes from good preparation. Companies should engage professionals to develop a distinct crisis communication plan and train their people in crisis communication response through simple desk-top role-play crisis simulations or full-blown crisis drills.
A one-page “guide to media handling” in a crisis management manual is not enough. Crisis communication manuals should be designed to be used not read.
They should contain extensive checklists for a multi-stakeholder communication response and document templates for the first phase of communication. A policy and briefing guide relating to the digital media are also essential.
Fundamental to any management’s successful performance in a crisis are: demonstrated leadership, high public visibility and regular communication from the highest level of the executive team.
Therefore training in crisis media handling is essential to prepare spokespeople to face a hostile media, government officials with their own agendas, and worried customers and employees.
3. Response
When a car accident happens, those involved may be found wandering around dazed for some time before they work out what it is they are meant to do.
As soon as the ambulance and police arrive things get done quickly because, as a result of routine training, these specialists know exactly how to respond.
When a crisis strikes, time is of the essence. How a company handles the “golden” first eight to 24 hours after a crisis often sets the agenda and tone for media coverage and stakeholder response for the life of the crisis.
Therefore, crisis response is a time for implementation of strategy, not development of strategy. The immediate aftermath of a crisis is the time to put the plan into action, not develop the plan.
Unfortunately, the circumstances in which I meet many new clients is when they are already in a crisis – and without a communication plan.
Certainly the potential for success in this environment is far lower and the experience of managing the crisis far more stressful and less effective.
My most fundamental word of advice is this: no matter what your approach or philosophy on crisis management or crisis communications may be - and no matter what your budget or resource allocation may be - make sure that the first time you engage with your crisis communication support consultants is before the house catches fire.
Damian Coory is managing director of the Asia Pacific Corporate practice at Edelman in Hong Kong
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