A crisis can happen to everyone, organizations as well as one’s personal life. In the following a definition of crisis is given, some crises of the last 25 years are addressed, as well as how one can prepare for a crisis and how to communicate during a crisis.
What is a crisis?
Organizations can face two kinds of crises; those that can not be avoided and those who can. Crisis that can not be avoided are for example natural disasters. In contrast, crisis caused by human error, negligence, or, in some cases, malicious intent can be prevented.
Human-included crisis can be further divided into cases where the company is at fault and where it is not. Negligence is an example for a company’s fault, whereas crime is an example of no fault by the company. A company can become a victim of crime
In all situations however constituencies will look at the organization’s response to the crisis, before making a final judgment.
The book Corporate Communication written by Paul A. Argenti, gives the following definition of crisis:
“A crisis is a major catastrophe that may occur either naturally or as a result of human error, intervention or even malicious intent, It can include tangible devastation, such as the destruction of lives or assets, or intangible devastation, such as the loss of an organization’s credibility or other reputational damage. The latter outcomes may be the result of management’s response to tangible devastation or the result of human error.”
While all crises are different they still have some same crisis characteristics:
1. The element of surprise: leads to a loss of control, which makes the crises very difficult to handle
2. Insufficient information
3. Quick pace of events
4. Intense scrutiny
Crises from the Past 25 Years
Organizations today can learn from the crises of the past and especially, how they have been handled. They can learn at those examples what to do and what not to do.
In 1982 Johnson & Johnson faced the crisis of the Tylenol Recall, after seven people died after taking Tylenol capsules. Due to the good handling of this crisis it became the “the gold standard” of product-recall crisis management.
An example of how not to handle a crisis is given by the Perrier benzene scare in 1990. They had a problem with benzene contaminated sparkling water. Instead of being honest they lied to the public about the cause of this problem, which was uncovered a few days later.
3 years later in 1993 Pepsi-Cola’s Syringe Crisis occurred. A man found a syringe in a bottle of Pepsi. Pepsi was successful in handling this crisis, by making its production process visible to the public and showed that it is impossible to insert a syringe into a bottle. Due to a very good crisis management, even continued after the scandal was proved to be wrong, Pepsi managed it to get the people’s trust back.
The Online Face of Crises
With the new millennium a new type of crisis appeared namely online crises. Serious business crimes are for example data theft, or damaging the computer system with a virus. But those are not the only problems which companies need to guard online. The internet can also be used to create anticorporate, antibrand “communities. Additionally a company image can be seriously damaged through web logs and online reviews of the company’s products. A recommendation for companies is to build u their own online presence, through online pages, and build a good connection to the online world.How to prepare for crises
First it is essential for every company to understand that it can find itself involved in crises, no exceptions. There are certain steps, how to prepare for a crisis.
1. Access the risk for your organization
Make a plan for potential crisis-situation and determine the effects on your constituencies.
2. Set communication objectives for potential crises
3. Analyze channel choice
4. Assign a different team to each crisis
Different problems need different solutions and different experts.
5. Plan for centralization
In times of crises the company’s communication system has to be centralized.
6. What to include in a formal plan?
It is recommended to make a list of persons or organizations which have to be notified in an emergency. An approach for media relations is to tell as much as you can as fast as you can. Before a crisis arises, think about a strategy to inform your employees, as well as a location which can serve as the crisis headquarter. All the plans you made to handle the crisis should be written down, so the company has a description of the plan.
Communicating during crisis
An 8 steps plan helps you to communicate during crisis situation.
1. Get control of the situation by defining the real problem and set communication objectives.
2. Gather as much information as possible
3. Set up a centralized crisis management center
4. Communicate early and often
5. Understand the media’s mission in a crisis
6. Communicate directly with affected constituents
7. Remember that business must continue
8. Make plans to avoid another crisis immediately
Conclusion
Crises are times of instability, where it depends on the leadership activity and decision making the outcome of the situation. In some cases companies can emerge even more respected out of a crisis, if they handled it well.
Examples / Class:
In class we discussed the crisis of Coke India in 2003. Coke India was blamed to have pesticides in its Soft drinks. In this context we talked about how the crisis is to evaluate, how well prepared Coke India was, to deal with this crisis, and if Coke India could have avoided the crisis. Afterwards, we discussed recommendations of action, for the long- and the short-term, and which problems should be addressed first.
Another example is the Salmonella crisis at Sheetz, caused by tomatoes on the subs, in 2004. Sheetz acted really fast in searching for the cause of the Salmonella virus, and after detecting it in the tomatoes, they withdrew all tomatoes from circulation. After that they bought new tomatoes from a new supplier and the CEO in person, made himself a sandwich, put the tomato on it, and ate it in front of the press. This was a good step towards regaining the consumers trust.
Links:
Crisis preparation:
http://www.cmgassociates.com/Are_you_crisis_prepared.pdf
Crisis Prepared or Crisis Prone?
http://harvardbusinessonline.hbsp.harvard.edu/hbsp/hbr/articles/article.jsp?ml_action=get-article&articleID=R0304J&ml_page=1
Crisis communication plan:
http://www3.niu.edu/newsplace/crisis.html
3. Set up a centralized crisis management center
4. Communicate early and often
5. Understand the media’s mission in a crisis
6. Communicate directly with affected constituents
7. Remember that business must continue
8. Make plans to avoid another crisis immediately
Conclusion
Crises are times of instability, where it depends on the leadership activity and decision making the outcome of the situation. In some cases companies can emerge even more respected out of a crisis, if they handled it well.
Examples / Class:
In class we discussed the crisis of Coke India in 2003. Coke India was blamed to have pesticides in its Soft drinks. In this context we talked about how the crisis is to evaluate, how well prepared Coke India was, to deal with this crisis, and if Coke India could have avoided the crisis. Afterwards, we discussed recommendations of action, for the long- and the short-term, and which problems should be addressed first.
Another example is the Salmonella crisis at Sheetz, caused by tomatoes on the subs, in 2004. Sheetz acted really fast in searching for the cause of the Salmonella virus, and after detecting it in the tomatoes, they withdrew all tomatoes from circulation. After that they bought new tomatoes from a new supplier and the CEO in person, made himself a sandwich, put the tomato on it, and ate it in front of the press. This was a good step towards regaining the consumers trust.
Links:
Crisis preparation:
http://www.cmgassociates.com/Are_you_crisis_prepared.pdf
Crisis Prepared or Crisis Prone?
http://harvardbusinessonline.hbsp.harvard.edu/hbsp/hbr/articles/article.jsp?ml_action=get-article&articleID=R0304J&ml_page=1
Crisis communication plan:
http://www3.niu.edu/newsplace/crisis.html
For a long time managers concentrated more on the company’s external communication, especially with customers. However, they have begun to realize that also internal communication is very important, recognizing, that employees have more to do with the company’s success than any other constituency.
The purpose would then be one of the corporate advertising goals, increase sales, create a stronger reputation, and/or recruit and retain employees. The second thing we looked at was whether this advertisement was a corporate or a product advertisement. If it was a corporate advertisement we further distinguished between the different kinds of corporate advertisement, as there are reinforce identity, enhance reputation, attract investment and/or influence opinions. Last but not least we decided which constituents are addressed with the advertisement.
