Bad CEO behavior. An oil spill. A dangerous product. These are the kinds of catastrophes that come to mind when many of us think of the corporate crisis cautionary tale. It’s something that happens to someone else. Not us. Many executives tell themselves that they’re too small to suffer a major disaster. They think there isn’t anything on their corporate radar that can do that much damage. And if something does happen, they believe they can respond quickly and avert any real crisis. Large companies may have anemic or woefully out-of-date plans in place. Or they believe they can throw money and staff at the problem.
If the COVID-19 pandemic has taught us anything, it’s that no matter what the size of your company or how healthy your market is, no one’s immune from damaging forces beyond their control. Who would have thought a global pandemic would sound the death knell for an additional 200,000 businesses, according to the Fed. We’ve seen legacy brands such as Hertz, Neiman Marcus, Gold’s Gym and J. Crew file for bankruptcy protection. A crisis can be the end for even the healthiest companies.
|This article is featured in O'Dwyer's Nov. '21 Technology PR Magazine
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We don’t need to look to a once-in-a-hundred-year pandemic for dangers to companies. To be effective, we must broaden how we define and mitigate a crisis. If a competitor suddenly announces a product that exceeds your product’s key features and is backed by top brand endorsements and a high-quality marketing campaign, would that pose a threat to sales? Would a social media firestorm criticizing the company based on a policy or controversial customer action affect your ability to sell and hire? Would an unflattering analyst report damage the sales funnel? How about a problematic funding or IPO effort? Could that bring on a financial crisis? The smart executive realizes that threats come from beyond the scope of traditional crises. They come in all shapes and sizes and at any time. Rethinking what qualifies as a crisis and then undertaking thorough preparation is the best approach to mitigate even the most damaging product, market, natural disaster and global event.
As a PR practitioner with more than 35 years of experience, I’ve crafted custom crisis protection models for companies from startups to multi-billion-dollar brands. These shields of protection can focus on competitive threats, product issues, stock de-listings, social media revolts, community issues, management team errors or misbehavior, employee misconduct on social media and more.
There are four critical elements to an effective process which will help identify and lessen—and can sometimes completely eliminate—certain threats:
Threat assessment matrix: This stage helps identify any threats to the company that could result in critical damage. It also identifies key stakeholders that the crisis can directly affect and influence. Potential crises may include product failures, social media campaigns—involving employees or those outside the company—competitive strikes, a problematic funding or IPO event, executive misbehavior, an embarrassing email or video and more. Once these events have been identified, an audit must be conducted to measure the sentiments of key stakeholders such as influencers, media, partners, groups, employees and analysts. This baseline audit is done to form a basis of comparison which allows you to effectively measure the scope and effect of the crisis.
The message matrix: In this stage, protective foundational messaging and customized narratives for critical stakeholders and personas are developed and tested. A matrix is as simple or complex as the number of stakeholders and the threats to the company. They can be calibrated according to likelihood and level of damage.
The playbook: Next, a custom playbook is created. This document will identify players and proactive and reactive programs and processes. While a master crisis playbook is essential, depending on the scope and nature of threats, some companies are well-advised to develop playbooks for individual divisions or threats.
Post-threat analysis and correction: If a crisis occurs, a thorough assessment of the event and response is carried out and any necessary corrections made. While an internal investigation is warranted, when a serious crisis occurs that results in injury or loss of life, severe property damage, major financial loss, criminal activity, and legal issues, the company must hire a reputable, fully-independent firm with deep knowledge of the financial, legal, technical and market implications to ensure a fully accurate and impartial assessment. In some cases, local, state and federal authorities must also be notified and cooperated with.
The crisis plan is a necessity, not an optional activity to be implemented if resources and time allow. Taking a laissez-faire approach to the possible—and in some cases, the probable—can be deadly. Don’t get caught in a game of Russian roulette. The stakes are too great. The PR professional must initiate and play a central role in ensuring the company is protected. Assess and prepare to alleviate—and in many cases avoid—threats to your company’s survival. Ensure the entire C-Suite is onboard and participating in planning, prevention and action. Crisis planning should be the ultimate team effort.
Julie Karbo is CEO of Karbo Communications.