POSITIONING

A COMMUNICATIONS MANAGEMENT NEWSLETTER

Spring 1997                                                                                                                                     VOL. 8 NO. 1

CRISIS COMMUNICATOR'S JOB: PUT OUT THE FIRE

Ed Dandridge, Principal with Bozell Sawyer Miller, had just left a meeting in New York City's financial district when he witnessed a scene right out of a movie: Hundreds of dazed men and women stumbling around aimlessly on the street, many covered in soot, several collapsing in front of him. His first reaction was that there must have been a fire. Only hours later, did he learn that the World Trade Center had been the victim of a terrorist bombing.

The next morning, he and 15 colleagues returned to the devastation, only this time as crisis consultants hired by the Port Authority of New York and New Jersey.

"For the next four months, we worked 18 to 20 hour days from a virtual 'war room' next to the bomb site and conducted our daily crisis council activities from there," Dandridge remembers. "Within 72 hours, we commissioned our research division to conduct focus groups of those who were effected by the blast and to identify their key safety and security concerns. We used the tri-state area cable systems to broadcast daily briefings to public officials, tenants, employees, the police and the media on a daily basis."

The team had its work cut out for it. It needed, quickly, to segment audiences and communicate a series of different messages to audiences that included victims of the blast, potential tenants, commuters, area businesses, tourists, and, of course, the media.

We worked closely with the media to make sure they assumed ownership in reporting the progress of the building as it was being rebuilt and improved," he recalls. "We worked closely with the Port Authority team to make sure their heroic restoration efforts were presented to all the key constituencies as quickly as possible so that the World Trade Center could get back to business."

Whether it comes in the form of a safety claim against a product, an unforeseen disaster, or a bankruptcy, a crisis can seriously undermine public and/or shareholder perception of an organization, and can last for years. According to Harris Diamond, Dandridge's colleague, and chief executive officer at Bozell Sawyer Miller, crises come in two categories: character/ideological, where an event causes the loss of a company's integrity; and financial, where a company's market value plummets for any one of a number of reasons.

A loss of integrity is far more difficult to recover from, says Diamond. As a recent example, he points to the Dick Morris sex scandal.

"The issue with Morris was not so much that he was having sex with a prostitute, but that he had betrayed the confidence of the President of the United States," says Diamond. "This type of situation - betrayal of trust - is almost never recoverable. I'm not saying he will never work again, but trust will always be an issue for him in his career."

In a financial crisis, a company may file bankruptcy, its stock may drop or it could face a class action lawsuit, Diamond says. "Yet, it's easier for a company to recover from this because the market can always change and management usually survives."

Dealing with Crisis

"How a company deals with a difficult situation plays a key role in how that company is perceived by consumers and whether trust in the company and its brands will be saved or lost," writes Morri Berman, Senior Vice President and Partner, Director of Media Training/Presentation at Fleishman-Hillard in New York City in an article in Marketing Review. "Every organization needs to recognize that it could be involved in a crisis ... and every company should have a crisis plan in place."

Having a plan in place is a way to prevent going down "rabbit holes and wasting time," says Armando Ojeda, Vice President - Prevention, Safety & Health at Levi Strauss in Dallas. "Speed is extremely important in getting information and responding to the public. This way you are able to shape the story and not have the media or victims shape it for you."

Such a plan - which often includes establishing a broad-based senior level team and identifying a single spokesperson or central location for funneling news inquiries - may be critical, but doesn't by itself put out the fire which, in almost all cases, comes suddenly, without any warning.

"No matter how much crisis planning you do, you are always surprised when it occurs," says Albert Tortorella, Senior Vice President, Corporate Communications at UST in Greenwich, Connecticut and formerly Vice Chairman at Burson-Marsteller in New York City, "Some people believe having a practiced plan eliminates this, but it doesn't always because a company's daily routine changes and management's focus becomes the crisis."

Three years ago, an off-duty Federal Express pilot hijacked one of the company's DC-10's, injuring several employees. "All the crisis models we had in place beforehand never could have predicted that," says Tom Martin, now Vice President and Director-Corporate Relations at ITT Industries in White Plains, New York, who until recently held a similar title at Federal Express. "But you still need to have fundamental concepts in place that can be used in most situations."

Corporations seem to be taking crisis communications far more seriously today. After all, it has been shown time and time again that a corporate crisis that is not deftly handled can virtually destroy a product or even the company itself.

According to a recent survey conducted by The Corporate Response Group and George Washington University, almost half of the companies responding reported an intensifying of headquarters' support of crisis management and an integration of their crisis plans into an overall corporate structure. The study points to several driving forces behind this trend, most significantly "an increased sense of vulnerability to natural hazards and the impact on corporate America of a string of recent crises." In other words, no one is immune.

The Explosion of Flight #800

Even though no definitive explanation for last summer's crash has been determined, TWA has been castigated by everyone from the mayor of New York City to relatives of the victims for its handling of the crisis. What was perceived as the airline's lack of a quick and sensitive response most dramatically resulted in a loss of public and shareholder confidence and the resignation of its chief executive officer.

Chris Chiames, Managing Director of Public Relations for American Airlines and a former spokesperson for the ATA (American Transportation Association) believes that the airline was more a victim of its own circumstances than anything else. "A combination of poor staffing and preparation," says Chiames, "coupled with the geography of the tragedy happening in the world's media center was the worst-case scenario for a company that didn't have a proper communications strategy already in place."

Whole industries can suffer as a result of a crisis, as the chemical industry did in the aftermath of the Union Carbide accident in Bhopal, India. More recently, a ValueJet crash not only caused serious difficulties for the airline, but for other small carriers whose collective reputations for safety were also compromised.

Taking a Proactive Stance

Being proactive, rather than allowing the fire to spread, can make a difference in public perception.

Harlan Teller, Executive Managing Director, Corporate Communications at Hill and Knowlton in Chicago, says he has worked with clients who expected a crisis simply to go away by hiding or attempting to avoid media attention. "I tell clients that, 'Your crisis will go away eventually, but you need to focus [right now] on preserving the company's reputation, brand equity, employee loyalty and shareholder confidence.' The media should be seen as a conduit, rather than an adversary in achieving these overreaching objectives."

Dealing with the media, of course, in any public crisis, is key. "The media likes to uncover an issue, assign blame and have closure," says Tortorella. "In many cases, the media can bring a company more problems, so you better give them what they want."

Sam Falcona, Director of Public Relations for Sears, Roebuck and Company in Chicago, has seen his share of crises while working with the U.S. Navy and a nuclear utility company. Media perception, he says, is often as important as reality. His advice is "Tell the truth, tell it all and tell it now."

Ray O'Rourke, Executive Vice President, Director of Crisis Management at Burson Marsteller in New York City, is frustrated by "experts" who know few or none of the facts of a crisis, yet air their critiques in the press. "Second guessing by armchair authorities makes the job very difficult," says O'Rourke. "Management is already extremely self-conscious. It not only induces a level of self-doubt, but delays implementation."

"Media training is extremely important for a spokesperson to avoid the trap of assessing blame or pointing fingers, which can add to public speculation before all the facts are in," says George Palmer, a communications consultant in New Jersey. Other steps may include use of a 24-hour 800-number to offer timely updates and answer press inquiries, frequent updating of the company's Web page, video news releases, broadcast faxes, press conferences and satellite feeds.

Likewise, in response to the recent airbag controversy where airbags were held responsible for killing several young children sitting in the front seats of cars - the Chrysler Corporation established an education program for day care and elementary schools teaching airbag and seatbelt safety. "We are being proactive by going out into the community and taking responsibility for our products," says Jason Vines, Manager of Car Safety and Environmental Public Relations at Chrysler in Auburn Hills, Michigan. "This approach will not only be effective in promoting safety, but it demonstrates to the public that we have learned from the past."

Poise under pressure is another key factor cited by crisis communications experts. "Do not panic," says Russell Durbin, Senior Director of Public Affairs of the Worldwide Health Marketing Group at Merck & Co., Inc., in Whitehouse Station, New Jersey. "A calm, concerned approach will see you through any crisis."

How a corporation reacts to a crisis often reflects its culture and style. John Onoda, Vice President, Worldwide Communications at General Motors in Detroit, who previously worked at Levi Strauss in San Francisco, says, "At Levi's, there is an empowered culture because it is a privately held company located in the progressive Bay area where 'doing the right thing' is in many cases more important than profit. At GM, there is less an air of individualism and bringing values into play isn't as fully developed because there are tens of thousands of employees and a tumultuous history with the labor union and the town's families. There is much more emphasis on how the message will be perceived."

Views on the role a CEO should play varies. Some say a CEO should be protected, while others want to shove him into the spotlight. "Companies don't always need to use the CEO as spokesperson during a crisis," says Teller. "The concern or care of the company is underscored when the CEO is put out front. Sometimes, though, it may be an overreaction to make the CEO so visible. Each situation must be judged on its own merits."

The role of the CEO, in fact, may shift from industry to industry. Nick Ashooh of Niagara Mohawk in Syracuse, New York says that his CEO acts as the company spokesperson in a crisis. "This is reflective of an industry where a crisis tends to have the capacity for serious environment or safety ramifications," he says. Meanwhile, in industries where the crisis is less likely to have life and death consequences, the CEO is noticeably absent. "The CEO should embody the company's values, but should not be the front-line person," says Levi Strauss's Ojeda. "We have media-trained spokespersons for that."

Crises do pass. Yet, unless a crisis is adeptly handled, it might seem like ages to a corporation's executives and shareholders before news stations and newspapers tire of covering the story and late night television and talk radio hosts move on to new material. And, by then, it may be too late.