Crisis: definition
I’ve found the definition of the Institute of Crisis Management in the USA:
“A crisis is a significant business disruption that stimulates extensive media coverage. The resulting public scrutiny will affect the organisation’s normal operations and could have a political, legal, financial and governmental impact on the business.”
But i
t’s not said if this impact is positive or negative: well, it can be both, depending on how you manage the crisis… As we’ve learnt, the Chinese sign meaning crisis is the combination of the “danger” and “opportunity” signs… Indeed, there is always a good and a bad side to a new event and that reminds me of a French expression: “what doesn’t kill makes you stronger”. So managing well a crisis can get you an even better reputation than the one you used to have!I’ve also read that the first cause of a crisis is management decisions (or indecisions); then come mechanical failures, and then human errors. That led me to think that if management is crisis’ main cause, this means that we can manage the risks of crisis…
Risk management
We could say that first come the risk, then an issue, then a crisis, and then a disaster… And I’ve learnt that since 1999-2000 organisations use more and more risk and issue management than crisis management. So identifying a risk actually became a skill, and is now a key part of corporate governances. The risk analysis is mainly built on an environmental scanning (political, economical, legal etc), as well as on using analogies, and on feedbacks (from stakeholders or the public) and audits. Indeed, Issue Audits can provide an Issue Brief that identifies the corporate and the brand positions on each issue, and details the process and responses needed. It means that each organisation has a risk profile, and so a recommended position, that is a key to handle any risk of crisis.
There is also a skill called issue management, that has been developed by Howard Chase in 1976; it’s an ongoing form of risk assessment. The idea is that issues have a lifecycle so can be monitored so as to prevent them from becoming a crisis. So all this tells us what experience shows: it’s better preventing than treating.
Crisis reveals an organisation’s responsibility
When we couldn’t prevent risks from becoming a crisis, we have of course to manage the crisis, and if possible use it as an opportunity for the organisation to gain credibility. And what can lead to this goal is the organisation’s responsibility during the crisis, its professionalism and reliability. Indeed, if you can prove that you’ve done everything within your power, you won half the battle. So a crisis’ outcomes are all about how you control it: you need to very quickly communicate in order not to be isolated, through giving accurate information and dialoguing with stakeholders, the public and the media. If you use the right channels and clear messages, you can have an opportunity to improve your image.
Tools to handle a crisis
This leads us to some tools that are useful to use in a crisis time: the basic one could be using a Holding Statement, that contains 3 steps: 1)Why is it a crisis?, 2)Holding a position, 3)Reassurance + what we do about it.
In more details, I’ve read that there are usually 6 stages during a crisis, so following them here can make this clearer:
1. What is at stake: define a strategy
2. Internal communication
3. Release statements: this is where we have to handle media stories by giving YOUR version (because something is going to be written anyway, so it’s better if it’s your story). Here covering up doesn’t work, given journalists’ experience and on line activists (for example on www.corpwatch.org , www.moles.org , www.gm-info.org.uk etc); there will always be someone to catch you! So it’s better to fairly establish your facts, and define who are the “goodies” and “baddies” as journalists are going to look for them.
4. Communicate (staying on messages); if something hasn’t been double checked it’s better to say “I don’t know”, otherwise this can also be used against the organisation… In one word, what I’ve learnt for 3 and 4 is that you have to show responsibility towards the media.
5. Consolidate and monitor
6. Recovery: media evaluation and debriefing: the debriefing report will be very useful for the potential following crisis.
I think it’s also important to notice here the existence of other tools, used in case of disasters: the Emergency Operations Centre (EOC), Business Recovery Centres, and the website www.it-disaster-recovery.com
Case study: Cadbury and salmonella
When I was thinking of examples to illustrate these theories, I remembered the crisis that a
ffected Cadbury in July 2006: Cadbury was hit by a salmonella contamination outbreak, which cost them over £40 millions in product recall, lost sales and damaged reputation. Early signs indicated that there were low levels of contamination in certain products, BUT Cadbury did not inform the Foods Standards Agency. The contamination was caused by a leaking waste piper near a conveyor belt.This was a classic case of not responding soon enough and crisis followed, with 1 million chocolate being recalled and destroyed. That shows very well that in a crisis, timing is everything.
Link to my personal crisis…
Now that I’ve made this analysis, of course I can say that it can help me when I’ll have to face a crisis in my professional life. But what about my private life? Can I avoid or at least reduce personal crisis by managing the risks? Is the best way to handle them being strong and responsible? Well I would say that in my private life I’d rather feeling remorse than having regrets… But then, I surely have to assume this by showing responsibility. And for my future professional life, I’d say that analysing risks is a key to preventing a crisis, and responsibility is a key to handle it.
Sources:
-Pam Williams’ 23rd January 2008 presentation, University of Westminster
-John Dalton’s 18th December 2006 presentation, London School of Public Relations
-Article about Cadbury and salmonella’s story:
http://www.timesonline.co.uk/tol/news/uk/article682877.ece
