A crisis is always going to be unique based upon the actual situation, but there are ways businesses can be prepared and skillfully navigate the trouble. It's also important to realize that after the crisis, the work isn't done. There are ways to ensure that your company comes back stronger, more efficient and is moving in the right direction.
While companies often claim they are ready to respond to a crisis, a study from Freshfields Bruckhaus Deringer offers some sobering statistics:
- 28% of crises spread internationally within an hour, while nearly 70 percent will escalate around the globe within 24 hours.
- On average, it takes companies 21 hours to respond publicly to a crisis. For nearly 1/4 of businesses, it can take them up to 48 hours to get in front of the problem.
- Even after a year, barely half of companies see their share prices return to levels from before a crisis.
Examples of crises
Every crisis is different because of the actual facts, the company, and the reaction of the public. However, crises can be broken down into categories. While there are many types of crisis (see this list), there are five common ones:
Financial- Usually an internal issue, but it can be driven by other factors out of the control of the company. It could be financial losses in stock value or market share or improper or potentially illegal actions within the structure of the company.
Personnel- If the people who work for a company do something wrong, it can create a very ugly and public crisis. It could be illegal or unethical actions that put a business in danger or could be something as simple as the mistreatment of a customer. This sort of crisis can spread quickly, especially online where people openly discuss their experiences, reviews, and opinions.
Organizational- A crisis of this type arises when internal business approaches harm a company's customers or employees. It could be something that directly affects its workforce such as employee policies or activities like greenwashing or deceitful practices that can endanger customers or the environment.
Natural- Although it is definitely something out of the control of a company, a natural disaster such as an earthquake, flood, or even Covid can cause a crisis for a business and it is important how a company reacts to the event. Some organizations are more susceptible to this (such as emergency preparedness groups) but many companies have found themselves in awkward if not dangerous situations based on how they handled a natural disaster.
Malevolence- This is when someone, an individual or company, has it out for a business and is doing something to bring reputational harm or financial harm. The problem could be based on truth or brought on by a competing business, or it could be a personal vendetta or simply someone looking to cause problems with no real valid grievances against that company.
The three stages of crisis management
Crisis management is a constantly evolving process, and a company needs to stay nimble and ready to react. A proper approach begins well before an incident and can go on long after the initial crisis has faded from public view.
Crisis management can be broken down into three phases:
Preparation: The more you can do in advance, the better the result will be if and when something happens. This includes research, training of staff, and planning for potential crises.
Response: Once the crisis rears its head, it is vital to respond quickly. A business needs to assess the situation, deal with the media in a proper way, shape the narrative from a place of truth and, if necessary, make immediate apologies and changes.
Recovery: Once the worst has passed, this is about restoring your image and reputation and using what you have learned to prepare for the next potential crisis.
The more prepared you are, the better off your company will be to ride out a crisis. As part of your advanced planning, there are steps you can take to ensure you are as ready as possible for the unknown.
What are your company's core values?
Make sure you and your staff are clear on who your company is, what you want, and what your values are. Look closely at your public image and how stakeholders perceive you. By remaining aware and working to constantly improve your reputation, you will not only find you are in a better position to repair issues during and after a crisis but that the public may be more understanding. If the public believes that you are genuine, they will not only be more willing to hear your side of the story but to also forgive and give you the benefit of the doubt as you come back from a crisis.
Form your team and train them
Don't wait until a crisis hits to assemble your response team. Do it in advance, training and preparing them properly. Measure the strengths of your team and take advantage of those talents, assigning people the right responsibilities and jobs. Select a spokesperson who is not only knowledgeable about your company but trained to deal with the public and press. They should also know what information needs to be released and what should stay within the company.
Create a well-thought-out emergency plan that outlines how your company and staff will respond, including speaking to the public and media. Playing the "What would happen if...” game gives you and your team the chance to brainstorm potential problems while creating an environment for out-of-the-box thinking.
Consider running test drills and hands-on exercises to prepare. They may not be the exact situations you might encounter as there will always be variables, but the more you can practice the better off you'll be while providing your team with valuable experience.
Change with the times
Too often companies rely on old information and plans. If you are using a crisis plan from a decade ago it's going to be all but useless. Think of it like a fire escape plan; if you are in a different building than when you created a plan, it's not going to help you.
It's the same for a company that has grown, changed, or evolved. Your crisis management plans need to do the same. Stay on top of your crisis management as much as you do marketing, IT, or operations. Plus also remember that public response and values change with time and should be taken into consideration.
First and foremost, a company must jump on the problem immediately. If your team is well-trained and prepared, they should be able to quickly see the big picture. This is more than issuing an apology, but understanding what happened, why it happened, and how you are going to fix things. While the situation is often going to be fluid and new details will emerge, it's vital that you and your team are on top of things.
Gather information quickly and accurately. This is where your training and planning will come into play. A well-prepared team will be calm and thorough as they assess. Don't allow yourself to make knee-jerk reactions. It's also vital to not cast aspersions or blame until you have all the information.
Communication isn't just about the media, but that's a major part of it. Be open and transparent with the press, not only with the facts of the situation but how you are approaching the crisis and your plans to fix things. Also remember, there are times when it's good to stay silent. You don't have to say "No comment," but there are occasions when the information you provide won't help the narrative or maybe you are still assessing. It might be difficult to keep your mouth closed, but there are times when it is needed.
If the situation calls for it, speak to any parties who have been involved or damaged by the crisis. Sometimes simply communicating with offended people can put a fire out quickly and without further damage.
Controlling the narrative
When a company takes too long to speak out on a crisis and is tight-lipped and releases very little or less than helpful information, it can create a vacuum that can be filled with press and public speculation which in turn will lead to untruths. That's why it's so important that companies have a prepared plan for speaking and showing what is actually going on, especially if the story in the public eye is not true.
Over the last few years, an example of controlling the narrative is the story of Prince Harry and Meghan Markle. While opinions on the couple vary, Harry and Meghan have steered the conversation through their interviews, a Netflix special, and books. Even as various narratives had come out about their life as part of the Royal family, the couple has brought forward a debate on the subjects of the private lives of public figures, racism, online harassment, and press responsibility, steering the narrative away from less favorable topics.
It's important to show compassion for your stakeholders, whether they be employees, customers, or the public. Often corporations are accused of being faceless entities and unfortunately, there are times when a situation arises and a company automatically falls into profit-making versus compassion and addressing the situation at hand.
On 9-11, the coffee company Starbucks did this when they famously charged first responders $130 for three cases of water. To add insult to injury, the corporate office initially denied the accusation until it was shown to be true. Starbucks eventually returned the money and offered an apology, but in the moment, a crisis that was not their doing turned into a crisis that was.
During Covid, Tyson Chicken became a prime example of a company not showing compassion internally. Stories emerged that Tyson was not concerned with the rights or safety of its employees and supervisors even joked about who might die in a betting pool. Not only did this come across as devoid of compassion, but it also created a public image that the company was more concerned about profits than employee safety.
Take responsibility (if necessary)
If the company or one of their employees did something, own up to it. If need be, publicly apologize and do what you can to make amends with wronged parties. However, if you or the company did nothing wrong, it's fine to say so. Pepsi did this and stood its ground with a publicity crisis regarding needles in its product that was eventually shown to be a hoax.
Just make sure you are absolutely in the right. Don't pass the blame, especially if it's not true. A famous example of this is United Airlines blaming a passenger for an overbooking issue, even going as far as shaming them publicly. This event backfired spectacularly, tarnishing the company's image and heavily damaging its stock prices.
There can be situations that are just too big for you to handle in-house or that need a special touch. Reach out to crisis management experts for the PR help you need. It might even be a good thing to have a few contacts already in the loop so you can act quickly and don't have to pick through a list of names while you are working to put out publicity fires.
Once the crisis has passed, it's time to move on and recover. However, just because things may be looking better, your job isn't over.
It may take time
As we saw in the study from Freshfields Bruckhaus Deringer, it can take a long time for a company to recover from a crisis. While you don't want to keep referring to "the crisis," you do want to show the new path that a company is taking that provides safety for the public, a change in attitude, or training of your workforce.While it's a delicate step, it's important to find a gentle and tactful way to show the public and customers that you are moving forward. Even after the worst has occurred, make sure you are continuing to be transparent and demonstrate how the company is making changes. This needs to be handled carefully because it shouldn't look like you are pandering to the public and you also don't want to keep reminding them of the issue.
Learn from the crisis
Take a look at not only how the crisis arose and what could have been changed internally, but how your team responded. Could they have been trained better or had more information? Did the emergency plan work? How did your spokesperson handle the public and media? Have a serious discussion about not only what worked but what could have been done differently.
Give credit where credit is due
After the crisis, thank your staff, recognize excellent performance and reward it. This goes a long way as a moral booster within your business but also shows the public that you are a vibrant company that appreciates its workforce.
ConclusionRemember that every crisis is unique, but there are ways you can make even the worst situation more manageable.
- Be prepared. Train your staff for all types of different potential crises.
- Speed is vital. React immediately in order to control the narrative.
- Be transparent. Tell the public what you know, what you are doing, and how you plan to handle the situation.
- Make changes. Whether it's internal operations, management, or how you do business, make the necessary adjustments. This also goes for genuine apologies, which should be offered when needed.
- Recovery can take time, but if you do the work in advance and follow these steps, your company can weather the crisis and rebound.