Crisis management

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Experts provide tips on what to do when bad things happen to your business

Bad things happen to good companies, and good people do bad things.

That’s why crisis management and public relations experts says it’s necessary in business to plan for the worst and be prepared for any potential crises that could happen and negatively affect the company’s reputation and its bottom line.

Each business has between four and six known risks that vary depending upon the industry and range from potential product defects to worker safety issues.

“A business owner and a leader today needs to have their eyes open and realize that sometimes bad things do happen to good companies, and good people sometimes make bad decisions,” says Eileen Wixted, the founder of Wixted & Co., a crisis management firm in West Des Moines. She says embracing risk is an important business decision to manage and plan for.

Here are five questions to ask yourself when analyzing your company’s risk and developing a crisis management plan:

1. What is a crisis?

A crisis is any act or issue that affects the business’ ability to continue to operate. Its effects vary depending on the size and type of business or industry. A case of food poisoning could ruin business for a smaller restaurant, while a larger grocery store chain can likely absorb the effects.

Crises come at different levels.

Operational: There is an explosion, natural disaster or other type of incident that prevents or harms the company’s ability to operate its facility or facilities.

Personnel: Issues related to employees such as claims of sexual harassment, embezzlement, fraud or any activity that is not in the best interest of the company.

Reputation: This most likely is a product or customer service-related issue that could cause customers to no longer want to do business with the company or has negatively affected them in some way, or something that makes employees say they are no longer proud of or want to be connected to the business.

“Things happen; things go wrong,” says Ryan Hanser, president of Hanser & Associates, a public relations firm in West Des Moines that handles crisis management. “A crisis is when something goes really wrong, and everybody is looking to see what will the organization do to make it right.”

Most times it is an incident that is visible to all stakeholders — from employees to customers to the public at large — and requires the company to take action, he says.

2. Am I prepared?

Wixted says many potential crises arise from patterns or business practices or other situations in which the owner or manager should be aware of the potential for a problem.

“Sometimes people think a crisis is something that goes boom in the night,” she says. “In 2017, the majority of crises are not the type that go boom in the night. They tend to be cultural or pattern of behavior crises.”

While it’s important for a business to have a crisis communications plan, the owner also needs to consider the company’s response to everyday “normal” situations, such as who’s in charge, who is called if there’s an issue, what is the company’s operational plan and what policies and procedures are in place.

For example, a transportation company may incentivize its drivers for arriving at destinations on time or even early. Since the policy has been in effect, the number of crashes with fatalities or injuries has increased.

“In today’s hyper-connected world, every business practice ends up being under the microscope,” Wixted says.

If the company didn’t change its incentives policy, that action will likely be questioned.

“That’s where it can become uncomfortable, and for leaders of a company, it becomes a failure of leadership,” Wixted says.

Waukee city officials do not have a crisis communications plan, but they do have a communications plan in which employees respond to situations such as adverse weather and any other potential situation that could affect residents or the community through a chain of command and the appropriate channels to notify the media and residents, says Summer Evans, the city’s marketing and communications director.

3. Where do I get help?

Professionals who specialize in public relations and crisis management can assist a business owner with learning what might be a future risk, as well as developing a response plan.

“They might have a different view of risks, and they’ve seen the patterns where organizations don’t see the risk,” Hanser says. “The crisis you don’t have to manage is a win.”

Wixted asks businesses to first evaluate their operational procedures and then the company’s policies and procedures to ensure none unintentionally create risk.

Wixted has worked in crisis management for more than 25 years and says with each crisis that occurs, the company conducts a root cause or post-mortem evaluation to determine what went wrong and when.

“There have always been early warning signs,” she says. “A crisis just doesn’t occur overnight.”

Each industry and business has between four and six known risks that need to be identified in to create a crisis communications plan, experts say.

Wixted suggests business owners look to their competitors to learn about potential situations. Once those operations and policies and procedures are evaluated, and risks are identified, then a crisis communications plan can be drafted.

“Ask yourself: ‘Am I prepared from an operational standpoint and a response standpoint and then a communications standpoint,’ ” she says.

Waukee public officials also are preparing for any crisis they may encounter at the city, school, police or fire level. For the past year, emergency services personnel and city and school officials have been participating in tabletop exercises where they rehearse various scenarios and how each department would respond, says Police Lt. Troy Mapes, who has been leading the exercises.

Evans says her part of the plan would include preparing a media staging area at the site of the incident if it is safe or elsewhere, as well as moving to a location that has Internet and telephone access, so she can be available to officials and the media.

Much of the training exercises have been directed to how to handle emergency situations, disasters or threats at the city’s schools that could include a natural disaster, an active shooter or any situation that could harm students, but other exercises have included the greater community.

“We never want that to happen, of course, but we’re doing everything we can to be prepared,” Mapes says. “With the things that have occurred across the country through the years, we thought it was important we keep our students and our residents as safe as possible, so we can be prepared and do a better job.”

The group, which involves the Waukee fire and police departments, the Westcom dispatch center, the Dallas County Sheriff’s Department, school and city officials, the school district’s busing company, and any entity that would respond to an emergency, will undergo an actual drill in the fall to test the plans.

Hanser says a professional firm can conduct similar exercises to discuss the “what-ifs.” Various crises are discussed and evaluated as to how they would be handled, and each person recites his or her role and what they would do. Employees need to be refreshed on the exercise and new ones need to receive the information, so the organization is always ready in case of a crisis, he says.

4. How do I deploy action, handle the media?

A crisis communications plan can range from five to 500 pages, but the fundamentals are the same: understand and recognize when you accept responsibility, Wixted says.

The plan also will include details about the key business functions that need to be operating as quickly as possible and the resources that will be needed to make this happen, along with the roles of specific individuals or classes of employees during the crisis.

Hanser says it’s ideal to enact the first steps of the plan within 15 minutes of a crisis. The plan already lays out what type of crisis that could occur, how it could filter into various scenarios, how the company will fix the problem, and how to and whom will respond. Business owners make the mistake when they delay a public response.

“Otherwise, the organization is slow to react, and that’s more reputation damaging,” he says. “Then everyone comes in to fill in the story, and that’s when it catches fire. Then you’re caught managing the record. You need to own the conversation from the start.”

The public response should show the organization is caring, compassionate and concerned, and that it will make up for it to those who were affected, he says.

At the city of Waukee, whenever Evans receives a call from the media about a pre-known event or issue, she’s prepared to direct them to the appropriate individual or to release any information that is part of the public record. If she is unaware of the topic ahead of time, she’ll find out what the reporter needs and gather the information.

“We certainly aim for transparency, but everything is just so situational,” she says.

Transparency is best when dealing with the media, Hanser says.

“Tell the truth, and tell it all, and tell it fast,” he says. “To the extent you can’t tell it all, it’s because you don’t know it all. … Even if you don’t know it all, the effort to get out in front is important. You need to let journalists know you aren’t hiding and that you’re available.”

Wixted says a company, likely with the help of lawyers, will want to manage liability for any issue that has resulted from the crisis, but that the company still needs to communicate a message of understanding.

“You can accept responsibility – your thoughts and prayers are with someone and apologize for the inconvenience – but it doesn’t mean you’re to blame,” she says. “Our culture demands that people step up and acknowledge that something has happened.”

A company needs to step up quickly in its response and be the first to issue facts by posting information to its website and then directing media calls, employees and others to the site for additional information.

“Today, with just a few key strokes, your news can be shared, and it’s out and everybody begins piling on,” Wixted says. “From the communications standpoint, we want you to be prepared from the acknowledgment standpoint, which buys you time. Acknowledge you know and you’re investigating. It positions you as a source of accurate and timely information.”

Preparing for the media is important, but Wixted says the message a business gives to its employees, board of directors, customers and regulators is just as important. A prepared business owner will already have a plan in place and know whom to inform if there has been a problem. Working with a professional crisis management or public relations firm can allow the business owner and his or her employees to walk through these scenarios ahead of time, or receive help at the time of a crisis.

“Preplanning is important because in those moments and hours after the unthinkable happens, you will not be able to concentrate well or make strategic decisions,” Wixted says.

A business crisis tends to make leaders and those who were in charge defensive, which results in poor decision-making and evokes feelings of fear, outrage, anger, confusion, vulnerability and more.

5. Can I live with any potential fallout?

Hanser says companies can improve their image during a crisis.

“The opportunity embedded within crisis is to exceed people’s expectations,” he says. “If you do more than is expected of you in the face of something terrible, you’re going to come out winning.”

By addressing policies and procedures and any warning signs early on, the business owner will save himself or herself a lot of money and potential damage to the company’s reputation, as well as ensure it meets the requirements of any regulations and is not at the risk of being shut down or fined.

“Everybody is afraid of the media,” Wixted explains. “Everybody is afraid that sometimes in a crisis that their reputation will be harmed. That’s a legitimate concern, but a more significant concern is that you will be shut down by regulators or others or all of your customers will no longer show up.”

In any crisis, Wixted recommends clients think PEAR:

• People: Has anyone been affected and how?

• Environment: Are there any threats to the building, water and air supply, or other environmental factors?

• Assets: Have the company’s assets or products been affected?

• Reputation: Has the company taken responsibility and acknowledged early on there was a problem? Are they frequently communicating updates?

“People are fairly forgiving that bad things happen to good people,” she says. “What they won’t forgive is someone who appears arrogant and doesn’t appear to care about the people who have been affected.”

Hanser says a good example of a company that managed a potentially damaging situation is Clow Valve Co. in Oskaloosa. The company, which sells and manufactures millions of fire hydrants, learned in 2006 that a lubricant in two of its brands of fire hydrants caused corrosion of the internal parts. This could have led the hydrants to become inoperable.

Hanser & Associates helped the company notify clients and the public of the issue and the company’s response, which was to locate every hydrant and replace the parts at Clow’s expense. The company provided free contractors to inspect the hydrants and to replace them, or to provide a replacement kit and pay for the labor to have the work done. Media coverage was positive of the situation, and Clow receive positive feedback from fire chiefs for its honesty and being proactive.

“It was about communicating there was a problem and fixing it,” Hanser says. “We hold this up as doing the right thing.” ♦

 

 

 

 

 

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