Articles

ACUTE ISSUE & CRISIS MANAGEMENT
By Terence Fane-Saunders
Chairman and Chief Executive, Chelgate Ltd

No organisation is immune from the threat of a crisis.

Whether you are the government of a country, or the manager of a "mom and pop" corner store, the rule is just the same. Things do go wrong. The test of competence, the real challenge to reputation, will lie more in the way you respond than in the fact the crisis arose in the first place. Indeed, there are many examples of companies emerging from crisis with their reputation actually enhanced.

At Chelgate, we estimate that more than 75% of good crisis management takes place before the crisis has arisen. Effective recovery has its roots in prudent preparation. In the intense heat of a major crisis or acute issue, there will be little or no time for anything other than direct, active management of the situation. Organisation of resources and facilities, preparation of materials, development of contact lists and check lists can all be done in advance, and are all difficult to do in mid-crisis.

A few years ago I was called in to help a food company manage a situation where one of their products was responsible for an outbreak of serious food poisoning among children. Worryingly, the company had no plans for acute issue or crisis management. The very experienced chief executive had considered time and money spent on crisis planning to be alarmist and over-dramatic. In his experience, situations like these did not arise in a well managed company.

The result was that a crisis turned into a disaster. The factory was closed and the product vanished from the supermarket shelves. Eventually, with much hard work, and at great cost, the situation was recovered and we were able successfully to reintroduce the product.

The chief executive, however, lost his job. He had left his business unprotected, on the basis that he had never had a crisis before - which was as sensible as the businessman who refuses to take out life insurance, and leaves his family unprotected, on the grounds that, in his experience, he never dies.

Good managers depend on experience. But sometimes experience can be an obstacle. This is particularly the case when you are planning for the rare or exceptional, and crises fall right into this category. Disasters, by their nature, are unlikely, and it may seem strange to be spending time and resources preparing for the unlikely; strange, but necessary.

Who's telling your story?

Of course not all crises hinge around physical events. It does not require a fire, explosion or product contamination to plunge you into crisis. Sometimes the issue is quite simply one of confidence.

A few years ago a giant property company was teetering close to the point of collapse. Its sector was in trouble, the value of its portfolio had fallen like a stone and sales had dried to a trickle. That said, it was still a solid, well-run business with an outstanding portfolio of investment properties , well-placed to spring back as the market cycle reversed. The real threat it faced was one of confidence. The stock market was in retreat, its share price had plunged, other well-known competitors had already collapsed and its bankers were growing nervous.

Our first task was to ensure that news about this firm emanated from the firm itself. We had seen other similarly troubled companies retreat into sullen silence, believing that if they "kept their head down" they might avoid attention. Of course, all that happened was that the market was fed instead by information, comment and rumour from other sources, much of it mischievous, some of it downright hostile.

The first rule, then, of good crisis management is to be the principal trusted source of information about your own affairs.

But in the case of this property company, we realised that it was not enough simply to be singing solo. What the company had to say was important and had genuine impact, but there would always be natural audience cynicism. "They would say that, wouldn't they".

A vital task then was to identify the other sources of trusted information and comment about this company's affairs, and to develop a strategy to tie them closely in to the company's message. This was not merely a question of supplying them with a sustained flow of relevant information. Meetings, briefings and relationship building contact all helped build confidence and added credibility to the company message.

Progressively, across the marketplace, other voices, expert, respected and authoritative began to speak of their faith in the firm's future. Steadily, confidence was restored, the crisis passed and the firm emerged, as it had always believed it would, on the next crest of the property cycle.

So, the second rule of crisis management is to know who is talking about you, and whose opinion counts. Work to bind these sources to you both with information, and, where appropriate, through direct personal contact.

Look Both Ways

One of the most difficult tasks in crisis management is the delicate balancing act required when key stakeholder groups require radically different, even contradictory messages.

A little while ago I received a call from the representative of a government who had been receiving a particularly rough ride in the British media. The difficulty here was that some of the accusations had some validity, particularly if seen from the leafy comfort of a middle class London suburb. It would have been wrong, both tactically and morally to deny that certain events had taken place. Even more important, though, within the culture and beliefs of this nation, it was entirely proper that these things should have happened.

The government's representatives could not and would not either deny or apologise. This would have been utterly at conflict with their primary stakeholders - the people of their own country. At the same time, though, the media assaults threatened to create a crude and misleading caricature of that country in western eyes.

Sometimes you have to accept that you cannot please everyone. But this did not mean that there was nothing to be done. The media, having adopted this caricature, were lazily reinforcing it with half-truths, two-dimensional reporting and prejudiced comment. Our first task was to help this government make use of the proper mechanisms of response when traduced. Just as important, we let it be understood that these mechanisms would be used. We did not expect to win many friends this way, but at least we were able to put a brake on some of the more inaccurate and ill-informed reporting.

The danger in a situation such as this, where there is a fundamental collision of cultures, is that any debate will degenerate into a simple slanging match : "You are wrong" "No you are".

We realised that the conversion of critics would be an unworkable objective, so instead we attempted to introduce a third element into the debate. It was not, we suggested, a question of one side being right and the other wrong. The real problem lay in a form of neo-imperialism in which some western commentators believed that they had the right not only to judge others by their own codes of law and custom, but to seek to impose these on others. This at least created a platform whereby a co-existence of opinion might exist : "I believe in the superiority of our laws and customs, but I also recognise your right to believe in and uphold yours".

I would not claim that this led to a reversal of opinion and comment, but for a period, at least, there was a noticeable shift.

September 11th

It is impossible now to write any kind of piece such as this without some reference to the terrible events of September 11th.

For those who argue that there was even one iota of justification for the attack, I have no advice to offer. This kind of atrocity must be condemned by any nation, and civilisation or faith with any belief in the sanctity of human life.

The danger for the United States and its allies, though, and one which they have clearly recognised, is that any response will be seen as an attack on Islam. It is not, and must not be allowed to become so. However, the war of global opinion is perhaps even more significant than the war of guns and bombs in Afghanistan, and my sense is that here the U.S. and its allies are losing ground. It is not enough for President Bush and Prime Minister Blair to assure the world repeatedly that this is not a war against Islam. Their problem is similar, though on a massively greater scale, to the property company I have already described. There are too many other influential and authoritative sources of comment and information shaping attitudes on this issue for the words of the U.S. and British governments to carry enough weight in isolation. The need to engage with the Muslim community; to inform, explain and demonstrably listen is just as acute - perhaps more acute - than the need to bomb Afghanistan, and deserves an equal commitment of resources, attention and time. To an observer, it does appear that the bombs have the present priority.

For the leadership of Muslim nations there is, equally, a hugely difficult task to address. They see, on the one hand, the U.S. and its allies demanding whole-hearted, unquestioning support. If you are not with them, you are with the terrorists they say. On the other, their people are hearing in the mosques, and seeing in the media that this is a war against Islam. Even qualified support for US action may seem a deep and unforgivable betrayal to their most important stakeholders - their own citizens.

The danger here is polarisation. There are approaches which Muslim nations could now adopt which would challenge and refute this polarising trend. This is not the place to spell out the very complex strategies now needed, but they require careful and well conceived engagement with vital stakeholders, both domestic and international. This is an issue where simply arguing your case will never be enough. Indeed, it will simply entrench already polarised positions.

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At Chelgate we have had to manage a great number of crises over the years, and we have helped put crisis communications procedures in place for a very broad range of organisations. Increasingly I have become convinced that if complacency is the greatest threat to effective crisis planning, it is followed hotly by two commonplace tools of crisis management consultants: procedural manuals and scenario planning.

Where's that Manual?

Manuals are dangerous because they create a false sense of security. Earlier this year I visited a well-known manufacturer to talk about their crisis management procedures. "Of course, we do have a crisis manual", the chief executive told me.

"Tell me about what it says", I enquired.

"Oh I haven't had a chance to look at it. It was done before my day" he replied. He had been with the firm for almost a year.

"May I see it?", I asked.

His eyes flicked around the bookshelves in his room. "I think my secretary has it". She in turn thought Personnel had borrowed her copy just before Christmas.

Had it been readily to hand, it still would have been of limited value. A manual is not a system. It has a list of procedures, many of which are outdated as soon as they are printed. More important, it does nothing to address the fact that crisis preparation is a constant, continuing process, not a single-time inoculation.

The manual had actually been little more than a talisman, a charm to ward off the evil of crisis. Had one struck it would have been of little help because there was no system in place.

In crisis preparation, we believe our task is to put in place a system which will develop and evolve, will be constantly updated and will actively engage the management team. Yes, we use system handbooks which require constant usage. But we burn manuals!

The Tenth Scenario

One popular theory of crisis planning is around scenario planning. It might equally be based around Russian Roulette.

A popular approach is to identify the nine most likely crises, and prepare detailed response strategies for each. The theory is that virtually any situation you care to imagine will fall into the context of one of the nine scenarios.

The weasel word is "virtually". It breaks the law of Sod. Prepare nine scenarios and you can be certain that the disaster waiting for you would have been number 10 in the list. It will be different, wholly illogical and defying all sensible expectations.

A few years ago I returned to the UK to take over as Chairman of one of the largest public relations consultancies. If someone had told me that, at the end of my first three months I would face the most horrendous crisis of my professional career, I could have listed not just nine, but nineteen or twenty nine scenarios before I came close to the events that actually took place.

The risks facing a PR firm would normally be associated with the communications process. Information leaked, or released at the wrong time; a critical mistake in a financial or legal announcement; provision of untrue information and so on.

The events that drove this particular crisis were of an entirely different order.
This is not the place to dwell on a personal tragedy, but the essence of the situation was the death of a highly regarded, much loved colleague, killed by the husband of a former employee. Overnight we were the lead front page tabloid news. Television cameras and photographers clustered outside the office hounding returning staff members.

Scenario planning would have been of little use. This was always going to be what we call the Tenth Scenario.

Another example was a client in a very sensitive area of the defence industry. Again, it would have been possible to spend all day listing likely scenarios without imagining the event which actually took place. The first I heard was when I received a call to tell me that the highly regarded Chief Executive was at his local police station responding to charges of child abuse . In fact, in this case, the allegations had been made by an unhappy and unbalanced former nanny and were quickly refuted, but for a few hours that organisation was staring into the abyss of a crisis which it could never have anticipated.

So How Do You Prepare?

When a crisis breaks much of the material you need, many of the resources and facilities, can have been prepared in advance. At Chelgate, we have developed long check lists , against which we examine the needs of the organisation.

Many of the elements are common sense. But practised common sense tends to be safer, and more comprehensive.

Here are just a few examples :

Photographs of key personnel can be prepared, captioned and held ready for distribution. Among other advantages this reduces the possibility that the photograph used will be of a wild-eyed, highly stressed corporate officer , deprived of both sleep and a decent razor. But it is important that these stock photographs are not the cheerful portraits you might choose in other circumstances. The last thing you want is a headline announcing some terrible event alongside a photograph of the company Chairman grinning from ear to ear.

Mini biographies can be just as useful. Remember this is not the occasion for pages of background on former achievements. A crisis means that journalists also will be working under pressure, and they need to be able to get quickly to heart of the matter.

Contact lists will also be vital in managing communications during a crisis. Of course you will have your media lists, but it should not stop there. In particular, think what other sources of information and comment the media may turn to. For example, these might include emergency services, local and political community leaders, industry or professional bodies, unions etc. It is important, too, to remember that the people actually managing communications on behalf of these organisations will not necessarily be the people with whom you have normal operational contact. You also need to ensure that you know how to reach them out of office hours.

Crisis communications centres can and should be planned in advance. You will need a room where media can wait, and where they can be briefed. You really won't want them milling around the front of your office or plant, aiming cameras and microphones at anyone arriving or leaving. But you will need a separate area where your crisis communications team can work in privacy. You also need to consider where incoming telephone calls will be handled.

And do make sure you have a key! Some years ago, while working in the Far East, I received a call from an airline client with news that a cargo plane had crashed. "I'm on my way to the office now" he yelped, crashing the 'phone back onto its hook. Half an hour later I joined him at his office, or rather, outside his office building. My client was jumping from foot to foot in agitation. "It's locked. The door's locked" he cried, pounding helplessly on the reinforced glass. This particular building was always locked at night, but there was supposed to be a night watchman to let you in. The trouble was that like many of his kind in that particular city, he had quietly taken himself off to a favourite corner of an upper floor for a little sleep, and was not to be roused. Meanwhile Head Office were desperately ringing the empty office twenty floors above us. And then the first journalist arrived….

What's our policy? Who knows the procedures?

No amount of planning will ever remove the need for quick and effective executive decision making during a crisis. For the person having to make those decisions, though, this can be a minefield. Normal rules and procedures don't necessarily apply in mid-crisis. So it can be helpful to have a clear statement of policy agreed in advance against which those decisions can be measured.

For example, here is a clause from one organisation's statement of policy:

"We will provide timely, factual, accurate information to the media through a designated official spokesman".

So, for that organisation, all concerned know that covering up, holding back, delaying or putting a misleading gloss on the story, tempting though this may be, would all be directly against agreed policy.

In the same way, normal procedures need to be revised during a crisis. But mid-crisis is not the moment to work out new ones. So, it is important to agree in advance the responsibilities and actions that come into effect when a crisis strikes, and these should be rehearsed, practised and thoroughly tested well before that crisis ever strikes.

Is this a crisis or what?

Given that a crisis will often demand a drastic over-ride of normal operating procedures, and this in itself can be difficult and disruptive, it is important to know exactly at what point the crisis procedures should come into effect. This might seem simple enough: "When there's a crisis" I hear you cry.

Fair enough, but what's a crisis ? One person's crisis is the next person's Great Tea Trolley Disaster. You really need a very clear, specific and objective definition of what comprises a crisis from the point of view of your organisation. Again, this needs to be prepared in advance.

Are you on my team?

No single person can manage a major corporate crisis alone. Effective crisis communications demand first class teamwork, with each member of the team taking up his or her clearly defined responsibilities. The time to allocate those responsibilities and to prepare team members is again not when the crisis breaks.

It is important also to recognise that normal patterns of responsibility may need to be re-allocated under crisis conditions. For example, a chief executive may want to take personal control of the operational side of the crisis. But he or she may also be the person who must lead the communications process and act as the voice of the organisation. Depending on the nature of the organisation and the scale of the crisis it may be unwise and unrealistic to attempt to carry out both responsibilities.

In the same way, within the crisis communications team, responsibilities will not necessarily reflect the arrangements that apply under normal conditions. Some tasks will expand in scope and intensity, others may be unnecessary outside times of crisis. This means that members of the team may be asked to carry out roles with which they would not normally be familiar. Good crisis communications planning means that these people will be trained and rehearsed in their roles.

Who's Talking about Me?

It is easy to think that the task of a communications team is to prepare and issue information. But good communications must always be a two-way process - not only talking, but listening too.

During any high-profile crisis it is vital to know what is being said. If an inaccurate and damaging story runs on a radio or television news bulletin, you need to be in a position to act quickly to correct whatever has been said. This means that news monitoring must always be one of the key responsibilities assigned in any crisis planning exercise.

With a little help from our friends

This may seem the moment for the Chelgate company commercial, but the point is worth making anyway : use consultants. Use qualified, experienced, professional consultants, both to help you prepare, and then to help manage the crisis if and when it occurs.

Remember, though, that there are two different areas of crisis management: operational and communications. You may well want to engage operational crisis management consultants to help you plan for the management of the crisis itself. But for crisis communications planning, you need crisis communications professionals.

This advice about consultants is not just directed at organisations with small or inexperienced PR teams. In planning, a good consultant will bring new ideas and challenge assumptions in a way that is vital if your preparation is to be effective. Then, when the crisis breaks, and you are facing unprecedented levels of pressure on your communications team, it can be a tremendous advantage to have an experienced and trusted team of professionals (who already understand your organisation and its special requirements), available to supplement whatever in-house resources you may have. But if you have never met them before, if they know nothing about your operation, they will be much less use to you. So build your consultants into your team from the outset.

A consultant's objectivity can also be a tremendous asset. Even the most experienced and balanced of managers can find that the extreme stress of a crisis eventually interferes with the decision making process. Priorities can shift out of proportion; the urgent can push aside the important. The advice and support of a consultant who has been down that road many times before can be a very real and valuable advantage.

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