“It takes many good deeds to build a good reputation, and only one bad one to lose it.”
Benjamin Franklin
Learning Objective1: How to
prepare for a crisis (Pre-)
· Is it
possible to be prepared for a crisis?
o
Why is it important to prepare for potential
crises?
· Recognizing
the signs (in which circumstances a crisis possibly occurs?)
Learning
Objective2: Crisis communication (During)
· Define the
scale of the crisis
· How to
manage the communication during crisis?
o
What to consider? External/ Internal
Learning
Objective3: Effects of crisis (Post-)
· How to
recover from a crisis?
· How to hold
up the reputation post-crisis? Consider internal and external elements
|
A proactive approach consists of monitoring your public reputation on a regular basis via “social media monitoring.”
Social media monitoring allows companies to gather public online content (from blog posts to tweets, from online reviews to Facebook updates), process it, and see whether something negative or positive is being said affecting their reputation.
Social media monitoring can be both DIY (Google Alert is an example of a free web monitoring tool accessible to anyone) and professional, depending on the size of the business involved.
An article from HBR
"Reputation and its risks" here gives practical advice:
Effectively managing reputational risk involves 5 steps:
1) assessing your company’s reputation among stakeholders - Three questions need to be addressed: What is the company’s reputation in each area (product quality, financial performance, and so on)? Why? How do these reputations compare with those of the firm’s peers?
Various techniques exist for evaluating a company’s reputation. They include media analysis, surveys of stakeholders (customers, employees, investors, NGOs) and industry executives, focus groups, and public opinion polls. Although all are useful, a detailed and structured analysis of what the media are saying is especially important because the media shape the perceptions and expectations of all stakeholders.
2) evaluating your company’s real character,
3) closing reputation-reality gaps,
4) monitoring changing beliefs and expectations,
5) putting a senior executive below the CEO in charge - the CEO has to give one person responsibility for making these things happen. Obvious candidates are the COO, the CFO, and the heads of risk management, strategic planning, and internal audit.
Learning Objective1: How to prepare for a crisis (Pre-)
· Is it possible to be prepared for a crisis?
o Why is it important to prepare for potential crises?
· Recognizing the signs (in which circumstances a crisis possibly occurs?)
Paul Argenti "Corporate Communication", fifth edition:
"A crisis is a major catastrophe that may occur either naturally or as a result of human error, or even malicious event. 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. A crisis usually has significant actual or potential financial impact on a company, and it usually affects multiple constituencies in more than one market."
Crisis characteristics:
1) the element of surprise (Philip Morris found carcinogens in its filters) leads to loss of control!
2) insufficient information (no facts - a lot of explaining)
3) the quick pace of events (things escalate rapidly)
4) intense scrutiny (media spotlight, Martha Stewart)
Organizations tend not to understand their vulnerability until after a major crisis occurs. Lack of preparation can make crises even more severe and prolonged when they do happen.
3 case studies:
1982 - Johnson & Johnson's Tylenol Recall
1990 - the Perrier Benzene Scare
1993 - Pepsi-Cola's Syringe Crisis
With personal Computers and Internet organizations face new crises online - data theft and beyond. Besides the damages businesses must cover for the affected customers, doubts about online security can arise doubts in corporate reputation's of many online retailers and bänks. (Argenti, p.257-267)
How to prepare for a crisis:
First, understand that today every organization is at risk.
Communications managers can use information about what has happened to unprepared organizations in earlier crises.
Assess the risk for your organization. Some industries are more prone than others. Publicly traded companies are at risk because in case of a crisis they face a selloff in the stock. Privately held companies should worry about the possibility to lose goodwill, which can affect sales.
Then brainstorming session that includes the most senior managers in the organization and the representatives. The goal is to develop ideas about potential crises, and decide which of them have most potential to occur.
Determine which constituencies would be most affected by the crisis and pay attention to the most significant groups.
Next steps are set communication objectives for potential crises, analyze channel choice, assign a different team to each crisis, plan for centralization.
Learning Objective2: Crisis communication (During)
· Define the scale of the crisis
Factors that shape the reputational threat
The threat is the amount of damage a crisis could inflict on the organization's reputation if no action is taken. Three factors in the crisis situation shape the reputational threat: (1) initial crisis responsibility, (2) crisis history and (3) prior relational reputation.
Initial crisis responsibility is a function of stakeholder attributions of personal control for the crisis by the organization – how much stakeholders believe organizational actions caused the crisis (
Coombs, 1995). Research has consistently demonstrated that increased attributions of crisis responsibility by stakeholders produce lower reputational scores among those same stakeholders. The reputational threat to an organization increases as stakeholders' attributions of crisis responsibility to the organization intensifies (
Coombs, 1998;
Coombs and Holladay, 1996,
2002,
2004).
Situational crisis communication theory's research has identified three crisis clusters based upon attributions of crisis responsibility by crisis type: (1) the victim cluster has very weak attributions of crisis responsibility (natural disasters, workplace violence, product tampering and rumor) and the organization is viewed as a victim of the event; (2) the accidental cluster has minimal attributions of crisis responsibility (technical-error accident, technical-error product harm and challenge) and the event is considered unintentional or uncontrollable by the organization and (3) the intentional cluster has very strong attributions of crisis responsibility (human-error accident, human-error product harm and organizational misdeed) and the event is considered purposeful (
Coombs and Holladay, 2002).
Crisis history is whether or not an organization has had a similar crisis in the past. According to Attribution Theory, a history of crises suggests an organization has an ongoing problem that needs to be addressed (
Kelley and Michela, 1980;
Martinko et al., 2004). Prior relational reputation is how well or poorly an organization has or is perceived to have treated stakeholders in other contexts. Prior relational reputation is unfavorable if the organization has a history of treating stakeholders badly (
Porritt, 2005). An unfavorable prior relational reputation suggests an organization shows little consideration for stakeholders across a number of domains, not just in this crisis.
Crisis history and prior relational reputation have both a direct and indirect effect on the reputational threat posed by the crisis. Either a history of crises or an unfavorable prior relational reputation intensifies attributions of crisis responsibility thereby indirectly affecting the reputational threat. Moreover, the two factors have a direct effect on the reputational threat that is separate from crisis responsibility (
Coombs, 2004a,
2004b).
· How to manage the communication during crisis?
o What to consider? External/ Internal
Crisis response strategies
| Primary crisis response strategies |
| Deny crisis response strategies |
| Attack the accuser: Crisis manager confronts the person or group claiming something is wrong with the organization. |
| Denial: Crisis manager asserts that there is no crisis. |
| Scapegoat: Crisis manager blames some person or group outside of the organization for the crisis. |
| Diminish crisis response strategies |
| Excuse: Crisis manager minimizes organizational responsibility by denying intent to do harm and/or claiming inability to control the events that triggered the crisis. |
| Justification: Crisis manager minimizes the perceived damage caused by the crisis. |
| Rebuild crisis response strategies |
| Compensation: Crisis manager offers money or other gifts to victims. |
| Apology: Crisis manager indicates the organization takes full responsibility for the crisis and asks stakeholders for forgiveness. |
| |
| Secondary crisis response strategies |
| Bolstering crisis response strategies |
| Reminder: Tell stakeholders about the past good works of the organization. |
| Ingratiation: Crisis manager praises stakeholders and/or reminds them of past good works by the organization. |
Victimage: Crisis managers remind stakeholders that the organization is a victim of the crisis too.
Source: http://www.palgrave-journals.com/crr/journal/v10/n3/fig_tab/1550049t2.html#figure-title |
What to include in a formal plan:
- a list of whom to notify in an emergency
- an approach to media relations
- a strategy to notifying employees
- a location to serve as crisis headquarters
- a description of the plan
(Source: Argenti, p.272-278)
Crisis communications should be coordinated by the corporate communication function, and communications professionals should be involved in crisis planning and crisis management. Ideally, a wider group of managers from throughout the organization - including the senior management spokesperson who will be facing the public - are included in all plannings of such events, in other words in-house collaboration.
Lawers may present a problem because they operate with a different agenda than communications professionals and do not consider how actions may be perceived By the public. A recent study states: "legal dominance is shortsighted and potentially costly". (Argenti, p.61-62)
The most important steps to take when communicating during the crisis:
Step 1: get control of the situation
Step 2: gather as much information as possible
Step 3: set up a centralized crisis management center
Step 4: communicate early and often
Step 5: undertstand the media's mission in a crisis
Step 6: communicate directly with affected constituents
Step 7: remember that business must continue
Step 8: make plans to avoid another crisis immediately
Source: Argenti p.279-282
Learning Objective3: Effects of crisis (Post-)
· How to recover from a crisis?
· How to hold up the reputation post-crisis? Consider internal and external elements
The diminish crisis response strategies argue that a crisis is not as bad as people think or that the organization lacked control over the crisis. If crisis managers lessen an organization's connection to the crisis and/or have people view the crisis less negatively, the harmful effects of the crisis are reduced. Managers need solid evidence to support these claims and even then might fail. Failure occurs when the news media or, in the case of online-oriented crises, people posting messages reject the crisis manager's frame and continue using a different frame. Stakeholders will be given competing frames and will select the frame provided by the source they find most credible. Diminish strategies are most effective when reinforcing existing crisis frames. Excuse strategies, lack of intent and/or volition can be used to reaffirm a crisis situation as residing in the accidental cluster. The value in reinforcing such a frame is that an accidental crisis is much easier and less expensive to manage than an intentional crisis (
Coombs and Holladay, 2002,
2004).
To change perceptions of the organization in crisis, managers present new, positive information about the organization and/or remind stakeholders of past good works by the organization. The key is to offset the negatives from the crisis with current or past good works. Rebuild strategies are the main avenue for generating new reputational assets. Rebuild strategies attempt to improve the organization's reputation by offering material and/or symbolic forms of aid to victims. The crisis managers say and do things to benefit stakeholders and thereby take positive actions to offset the crisis. Offering compensation or a full apology both are positive reputational actions. The rebuild strategies are used for crises that present a severe reputational threat such as intentional crises or accidental crises coupled with a crisis history and/or unfavorable prior relationship reputation.
Bolstering offers a minimal opportunity to develop reputational assets. Managers who have had positive relationships with stakeholders can draw upon that goodwill to help protect the organizational reputation, praise stakeholders for their efforts during the crisis as a means of improving relationships with them or draw sympathy from being a victim of the crisis. Praising stakeholders generates some goodwill and being cast as the victim evokes sympathy for the organization. Reminder, another bolstering strategy, uses past good works to counter-balance the current negatives from the crisis. The reminder strategy demands that there are good past works from which to draw. All bolstering strategies are best used as supplements to the three primary strategies and adjusting information.
A crisis will create negative affect, especially the intentional crisis cluster. Stakeholders become angry and may even enjoy seeing the organization suffer. Deny eliminates negative affect if people accept there is no crisis. Adjusting information and rebuild strategies are the most effective ways to reduce negative affect. Part of adjusting information is the expression of concern for victims. Expressions of concern themselves help to reduce negative affect. Expressing concern for victims (adjusting information) and reinforcing this compassion through compensation and/or a full apology serve to blunt feelings of anger (
Coombs and Holladay, 2005). A crisis can also evoke sympathy for the organization. The victimage strategy serves to reinforce the belief that the organization deserves sympathy.
