Keys to navigating a corporate crisis
Preparing ahead of time, identifying vulnerabilities and creating the right team to address them can be the difference between surviving or not.
When it comes to crisis planning, failure to consider the unexpected magnifies the impact of an already chaotic event. Throw in the use of social media by anyone who may or may not have actual facts, and a company’s reputation can be damaged in minutes.
At the recent Women, Influence, Power & Law (WIPL) event in Washington, D.C., two sessions looked at the steps to navigating a corporate crisis and how to recover once that crisis goes viral through social media.
“Build your team ahead of the crisis,” advised Sarah Isgur, a political analyst with CNN and a former Republican advisor and Department of Justice spokesperson. “Know who they are. Make sure there is a communications person in the room for everything before major announcements are made. You’ve already lost if they come into the process late.”
In addition to assembling and knowing who the crisis team will be ahead of time, Jaye Campbell, head of litigation at CoStar Group, also recommended knowing the team as well as the facts of the situation.
Monica Bernstein, senior vice president and general counsel of Crestline Hotels and Resorts, stressed the importance of having a crisis communication plan in place for emergencies. “When a crisis happens for us, it’s usually at the hotel level,” she said. “You need everything mapped out beforehand, such as who is on the phone trees, who is on the team from risk management, corporate communications and legal counsel to name a few. Employees will be frantic, so you have to map everything out ahead of time.” She also recommended tabletop exercises with staff to run through possible scenarios before they actually happen.
The people comprising a crisis team could include: legal representatives – i.e., general counsel, outside counsel, the insurance company, a communications person who may also be the representative to the media, a representative from operations and possibly law enforcement depending on the type of crisis. “Most of the crises we deal with happen in real-time,” Bernstein shared, “so we don’t have the luxury of a lot of time to plan.”
Determining who’s in charge depends on the type of crisis involved, explained Michelle Fang, chief legal officer for Turo, a peer-to-peer car-sharing service. “Is someone upset because of poor customer service or was there a data breach, or is human safety involved?”
To respond or not
Not every crisis demands a response. “You need someone with different perceptions to argue both sides,” warned Isgur. She shared that when she worked for the Justice Department, there were times they chose just not to respond. However, it is important to make a decision on whether a company will respond or not. “You can make a decision to make or not make a statement and make sure that everyone in the room knows what the decision is.”
If a company chooses to issue a statement, Campbell recommends keeping it short since, in all likelihood, it will be taken out of context. She also highlighted the fact that a company may have different audiences that need information such as employees, stakeholders, customers, government entities and stockholders. “The message to the employees should focus on why they are there and that they’re valued.” She also cautioned that any internal communication would make it out of the company and that messages should be crafted with that lens.
Isgur emphasized that authenticity is the keystone for communicating with employees. She suggested sending the message that’s going to press to employees ahead of time, letting them know, “Hey, we’re going to send this to the press and we wanted you to see it before it goes out.” This has a positive impact on employee morale because they can see the information before it goes out to the media and it also provides continuity for whatever is being released both internally and externally.
Social media in a crisis
The advent of social media has significantly changed the response time for any entity from days to mere minutes. Information that goes viral, even if it is incorrect, has the ability to change stock prices, affect product endorsements and change the way a company or individual is perceived by the public. “More than a quarter of crises spread globally within an hour, but companies can’t respond for almost 21 hours,” shared Angela Rodin, a principal with KPMG during a session on how to recover from a viral crisis.
While people still have freedom of speech, even on social media when they can hide behind names like “Big Daddy” or “Auto Racer 23,” they are still responsible for what they tweet or post, and sharing something inappropriate about an employer or co-worker, or posting a false claim can result in legal action.
There are protections in place for employees who are posting for a company, indicated Susan Duarte, director and senior counsel for Sprint. She also stressed the importance of having clearance or a release to post pictures and encouraged companies to have good processes in place for cease and desist orders.
Every crisis management plan should incorporate some elements of social media advised Aggie Gallagher, general counsel and chief compliance officer for Viiv Healthcare. She encouraged companies to have a plan, have the right people involved and make sure they are trained on social media and how to craft the company’s message. “You need a good social media policy for the organization. People need to understand what they can and cannot say about your company or product.” Equally important is knowing what to like or not like on social media.
The best types of crisis management teams are cross-functional and their composition will depend on the crisis involved. A core crisis team can be created and other experts pulled in as the situation warrants. What is non-negotiable is the failure to plan at all.
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