EMB
PREVENTION
IS BETTER THAN CURE
For crises to be avoided in the first place, business leaders
should consider the following:
Do you run crisis management simulations?
Do your team members know what their roles are or how they
should respond in a crisis? Running crisis management simulations
can limit real-life damage and improve decision-making ability.
Do you acknowledge your vulnerabilities?
Even in the good times, business leaders should recognize
their organizations’ vulnerabilities and fallibility. Operating with
invulnerability can lead to disaster down the line.
Does your organization have crisis management capabilities
independent from PR?
Your public relations personnel may not be equipped to handle a
reputational hit. A separate crisis management team, however,
is there to manage and prevent exactly that.
Do you have external expert counsel?
Having the right in-house capabilities is vital, but external advice
you can trust can provide crucial perspective to help avert a crisis.
Have you developed a communications strategy?
It is important to have a solid communications strategy in place
long before a crisis calls for it. The right person must also be
in place to communicate the message clearly and consistently.
Are you on top of goings on?
Stay informed about happenings across all your organization’s
locations and departments to increase the chances of identifying
and handling issues before they become problems.
To restore confidence in leadership, an organization needs
to fix its reputation, and fix it convincingly, in order to assure
customers and other constituencies that positive change has
occurred or that their original confidence was not misplaced.
Often this is easier said than done.
This is the challenge VW (at the time of this writing) is still
wrestling with. With a situation as technologically complex as
VW’s emissions systems cheating, it wasn’t readily apparent
precisely how the fraud occurred or who in the organization
was responsible. But to have the best chance of survival
in dangerous waters, a company must be able to get to the
bottom of the problem and repair its reputation, both inside
and out, to right the ship.
Inability to accomplish a clean fix also helps explain why
organizations like FIFA and Petrobras, the state-run oil giant
of Brazil, have lingering problems. While executives from
both organizations have been accused of accepting bribes
and money laundering, they’ve also contested the charges to
varying degrees. While in some instances contesting charges
may absolutely be the right thing to do (when a company is
genuinely convinced it is innocent and charges are without
merit), it’s hard to convince stakeholders that problems really
have been resolved while legal wrangling is ongoing.
Communicate effectively
Once a problem has been resolved or a successful resolution
is well underway, it’s time to communicate candidly, clearly
and consistently.
When a company’s reputation is called into question, there
is no place for stonewalling. Again, my personal experience,
which involved a CEO’s unexpected termination, taught me
that repeating the same carefully honed and 100% accurate
message over and over again to multiple audiences—customers,
employees, sales force, etc.—was integral to restoring confidence
in the organization, and hastened a complete recovery.
Since all communications related to the situation in question
will be scrutinized by multiple audiences including the media,
credible, consistent communication is a vital element of any
game plan to preserve reputation—and in the face of repeated
damaging publicity, relaying the message once is not enough.
For every instance of negative media coverage, a company
must strike back with a positive story, told through one
transparent voice.
This explains in part why organizations like FIFA, which have
spent years evading problems and issuing what, with the
benefit of hindsight, now appear to be less-than-truthful
denials, will have trouble regaining public trust.
Establish controls to prevent recurrence
Companies whose reputations have been tarnished or
compromised need to convince multiple parties that not
only has the problem been fixed or that allegations proved
unfounded, but that such situations won’t recur. Leadership
needs to credibly demonstrate that the issue has been
constructively resolved for the long term.
This is why Tylenol is the success story of this genre. In Johnson
& Johnson’s case, the quick decision to create containers with
tops sealed with unbroken plastic, not only saved the company
but also in the process revolutionized pharmaceutical
packaging for the good of the industry and the public at large.
While Tylenol’s example goes above and beyond the solutions
that most companies in crisis can reasonably hope to achieve,
the point is, they need to show that their improvements are
permanent, not merely a short-term fix.
This is the challenge that organizations like Volkswagen, FIFA,
Petrobras and MTN Nigeria are now dealing with. But for
multinationals, the challenges don’t end there. Companies with
a footprint in multiple territories must also consider the broader
impact that a reputational crisis in one country has on their wider
operations. For instance, with all eyes on Nigeria, MTN Group
was distracted from its other key markets to its detriment.
Whatever the location, reputational crises can occur in an
instant, and fully restoring public trust is a lengthy process
that often requires a thorough management housecleaning.
The public needs to feel confident that the environment that
gave rise to the problems in the first place no longer exists.
Successful business invariably involves detailed planning and
preparation. Reputational threats can lead to dangerous highstakes environments, but proper plann ing long before any
action is actually needed can improve the odds of a positive
outcome. While I hope this article will prove to be of interest
and value, my larger hope is that you never have an emergency
requiring you to use it.
Victor Lipman. A former vice-president of corporate communications for a Fortune 500 company. He’s
the author of The Type B Manager: Leading Successfully in a Type A World (Prentice Hall Press). He is a
regular contributor to Forbes and Psychology Today on management topics, and has his own consulting
firm, Howling Wolf Management Training.
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