Chapter 3 - Crisis Management (with tables).pptx

SM108 Chapter 3 Introduction Crisis to Public Managemen Relations t Asst. Prof. Dr G. Vimala  1. To discuss the importance in counselling on the actions an...

SM108 Chapter 3 Introduction Crisis to Public Managemen Relations t Asst. Prof. Dr G. Vimala  1. To discuss the importance in counselling on the actions and the managing the communication of an organization in crisis. 2. To explore the role of public relations in managing issues and risks and Chapter communicating in a crisis. Objective 3. To discuss, in detail, the s aspects of crisis planning, message mapping, and implementing crisis communication. 4. To examine how media relations differs in time of crisis than in normal everyday operations. What is crisis? Kathleen Fearn-Banks, in her book Crisis Communication: A Casebook Approach, writes, “A crisis is a major occurrence with a potentially negative outcome affecting the organization, company, or industry, as well as its publics, products, services, or good name.”  What is crisis communication?  Crisis refers to sequence of unwanted events at the workplace which lead to disturbances and major unrest amongst the individuals.  Crisis generally arises on a short notice and triggers a feeling of threat and fear in the employees.  In simpler words crisis leads to uncertainty and causes major harm to the organization and its employees. What is crisis communication?  Crisis management is the application of strategies designed to help an organization deal with a sudden and significant negative event.  A crisis can occur as a result of an unpredictable event or an unforeseeable consequence of some event that had been considered as a potential risk.  In either case, crises almost invariably require that decisions be made quickly to limit damage to the organization.  The nature of the potential damage varies based on the nature. What is crisis communication?  In most cases though, a crisis can affect health or safety, the organization's finances, the organization's reputation, or some combination of these.  A devastating fire could be a crisis that puts the organization's finances in jeopardy.  However, if the fire occurs during business hours, then the fire might also jeopardize health and safety since employees may find themselves in harm's way. Crisis management  Crisis management seeks to minimize the damage a crisis causes.  However, this does not mean crisis management is the same thing as crisis response.  Instead, crisis management is a comprehensive process that is put into practice before a crisis even happens.  Crisis management practices are engaged before, during and after a crisis.  Introduction A crisis, in other words, puts a great deal of pressure on organizations to respond with accurate, complete information as quickly as possible. How an organizations to respond with accurate, complete information as quickly as possible. How an organization responds in the first 24-hours, experts say, often determines whether the situation remains an “incident” or becomes a full-blown crisis.  Introduction  Public Relations professional must be ready to confront crisis at a any moment – whether the crisis has been festering for years or occurs in an instant. They are the integral part of crisis management teams.  So, a set of best practices and lessons gleaned from our knowledge of crisis management would be a very useful resource for those in public relations.  The best place to start this effort is by defining critical concepts  Definitions There are plenty of definitions for a crisis.  A crisis is defined here as a significant threat to operations that can have negative consequences if not handled properly.  A crisis can create three related threats: (1) public safety, (2) financial loss, and (3) reputation loss.  Some crises, such as industrial accidents and product harm, can result in injuries and even loss of lives.  Crises can create financial loss by disrupting operations, creating a loss of market share/purchase intentions, or spawning lawsuits related to the crisis. Cont.… definition  According to Dilenschneider (2000) noted in The Corporate Communications Bible, all crises threaten to tarnish an organization’s reputation.  A crisis reflects poorly on an organization and will damage a reputation to some degree.  Clearly these three threats (public safety, financial loss, and reputation loss) are interrelated.  Injuries or deaths will result in financial and reputation loss while reputations have a financial impact on organizations.  Effective crisis management  Effective crisis management handles the threats sequentially.  The primary concern in a crisis has to be public safety.  A failure to address public safety intensifies the damage from a crisis.  Reputation and financial concerns are considered after public safety has been remedied.  Ultimately, crisis management is designed to protect an organization and its stakeholders from threats and/or reduce the impact felt by threats. Effective crisis management  Crisis management is a process designed to prevent or lessen the damage a crisis can inflict on an organization and its stakeholders.  As a process, crisis management is not just one thing.  Crisis management can be divided into three phases: (1) pre-crisis, (2) crisis response, and (3) post-crisis. Effective crisis management  The pre-crisis phase is concerned with prevention and preparation.  The crisis response phase is when management must respond to a crisis.  The post-crisis phase looks for ways to better prepare for the next crisis and fulfills commitments made during the crisis phase including follow-up information.  The tri-part view of crisis management serves as the organizing framework for this entry. 1-PRE-CRISIS PHASE  Prevention involves seeking to reduce known risks that could lead to a crisis.  This is part of an organization’s risk management program.  Preparation involves creating the crisis management plan, selecting and training the crisis management team, and conducting exercises to test the crisis management plan and crisis management team.   Both Barton (2001) and Coombs (2006) document that organizations are better able to handle crises when they: 1. Have a crisis management plan that is updated at least annually, 2. Have a designated crisis management 1-PRE- team, 3. Conduct exercises to test the plans CRISIS and teams at least annually, and PHASE 4. Pre-draft some crisis message 5. The planning and preparation allow crisis teams to react faster and to make more effective decisions. 6. Refer to Barton’s (2001) Crisis in Organizations II or Coombs’ (2006) 7. Code Red in the Boardroom for more information on these four lessons.  Table 1: CRISIS PREPARATION BEST PRACTICES 1. Have a crisis management plan and update it at least annually. 2. Have a designate crisis management team that is properly trained. 3. Conduct exercise at least annually to test the crisis management plan and team. 4. Pre-draft select crisis management messages including content for dark web sites and templates for crisis statements. Have the legal department review and pre- approve these messages.  CRISIS MANAGEMENT PLAN  A crisis management plan (CMP) is a reference tool, not a blueprint.  A CMP provides lists of key contact information, reminders of what typically should be done in a crisis, and forms to be used to document the crisis response.  A CMP is not a step-by-step guide to how to manage a crisis. Barton (2001), Coombs (2007a), and Fearn-Banks (2001) have noted how a CMP saves time during a crisis by pre-assigning some tasks, pre-collecting some information, and serving as a reference source.  Pre-assigning tasks presumes there is a designated crisis team. The team members should know what tasks and responsibilities they have during a crisis.  CRISIS MANAGEMENT TEAM  Barton (2001) identifies the common members of the crisis team as public relations, legal, security, operations, finance, and human resources.  However, the composition will vary based on the nature of the crisis.  As noted earlier, a CMP serves only as a rough guide.  Each crisis is unique demanding that crisis teams make decisions.  Coombs (2007a) summaries the research and shows how practice improves a crisis team’s decision making and related task performance. SPOKESPERSON  A key component of crisis team training is spokesperson training.  Organizational members must be prepared to talk to the news media during a crisis.  Lerbinger (1997), Feran- Banks (2001), and Coombs (2007a) devote considerable attention to media relations in a crisis.  Media training should be provided before a crisis hits.  The Crisis Media Training Best Practices in Table 2. Table 2: Crisis Media Training Best Practices 1. Avoid the phrase “no comment” because people think it means the organization is guilty and trying to hide something 2. Present information clearly by avoiding jargon or technical terms. Lack of clarity makes people think the organization is purposefully being confusing in order to hide something. 3. Appear pleasant on camera by avoiding nervous habits that people interpret as deception. A spokesperson needs to have strong eye contact, limited disfluencies such as “uhms” or “uhs”, and avoid distracting nervous gestures such as fidgeting or pacing. Coombs (2007a) reports on research that documents how people will be perceived as deceptive if they lack eye contact, have a lot of disfluencies, or display obvious nervous gestures. 4. Brief all potential spokespersons on the latest crisis information and the key message points the organization is trying to convey to stakeholders.  COMMUNICATION CHANNELS An organization may create a separate web site for the crisis or designate a section of its current web site for the crisis. According to Taylor and Kent’s (2007) that having a crisis web sites is a best practice for using an Internet during a crisis. The site should be designed prior to the crisis. Stakeholders, including the news media, will turn to the Internet during a crisis. Crisis managers should utilize some form of web-based response or risk appearing to be ineffective.  Intranet sites can also be used during a crisis. Intranet sites limit access, typically to employees only though some will include suppliers and customers. Intranet sites provide direct access to specific stakeholders so long as those stakeholders have access to the Intranet. This intranet is designed to reach employees and other key stakeholders. With a mass notification system, contact information (phones numbers, e-mail, etc.) are programmed in prior to a crisis. Contacts can be any group that can be affected by the crisis including employees, customers, and community members living near a facility.  Table 3: summarizes the Crisis Communication Channel Preparation Best Practices Table 3: Crisis Communication Channel Preparation Best Practices 1. Be prepared to use a unique web site or part of your current web site to address crisis concerns. 2. Be prepared to use the Intranet as one of the channels for reaching employees and any other stakeholders than may have access to your Intranet. 3. Be prepared to utilize a mass notification system for reaching employees and other key stakeholders during a crisis 2-Crisis responses PHASE  The crisis response is what management does and says after the crisis hits.  Public relations plays a critical role in the crisis response by helping to develop the messages that are sent to various publics.  A great deal of research has examined the crisis response.  That research has been divided into two sections: (1) the initial crisis response and (2)reputation repair and behavioral intentions. INITIAL RESPONSE  Practitioner experience and academic research have combined to create a clear set of guidelines for how to respond once a crisis hits.  The initial crisis response guidelines focus on three points: (1)Be quick, (2)Be accurate, and (3)Be consistent. Table 4: Initial Crisis Response Best Practices 1. Be quick and try to have initial response within the first hour. 2. Be accurate by carefully checking all facts. 3. Be consistent by keeping spokespeople informed of crisis events and key message points. 4. Make public safety the number one priority. 5. Use all of the available communication channels including the Internet, Intranet, and mass notification systems. 6. Provide some expression of concern/sympathy for victims 7. Remember to include employees in the initial response. 8. Be ready to provide stress and trauma counseling to victims of the crisis and their families, including employees.  REPUTATION REPAIR AND BEHAVIORAL INTENTIONS  The reputation repair strategies vary in terms of how much they accommodate victims of this crisis (those at risk or harmed by the crisis).  Accommodate means that the response focuses more on helping the victims than on addressing organizational concerns.  The master list arranges the reputation repair strategies from the least to the most accommodative reputation repair strategies.  For more information on reputation repair strategies see also Ulmer, Sellnow, and Seeger, 2006). TABLE 5: MASTER LIST OF REPUTATION REPAIR STRATEGIES 1.Attack the accuser: crisis manager confronts the person or group claiming something is wrong with the organization. 2. Denial: crisis manager asserts that there is no crisis. 3. Scapegoat: crisis manager blames some person or group outside of the organization for the crisis. 4. Excuse: crisis manager minimizes organizational responsibility by denying intent to do harm and/or claiming inability to control the events that triggered the crisis. Provocation: crisis was a result of response to some one else’s actions. Defeasibility: lack of information about events leading to the crisis. Accidental: lack of control over events leading to the crisis. Good intentions: organization meant to do well 5. Justification: crisis manager minimizes the perceived damage caused by the crisis. 6. Reminder: crisis managers tell stakeholders about the past good works of the organization. 7. Ingratiation: crisis manager praises stakeholders for their actions. 8. Compensation: crisis manager offers money or other gifts to victims. 9. Apology: crisis manager indicates the organization takes full responsibility for the crisis and asks stakeholders for forgiveness. Reputation repair It should be noted that reputation repair can be used in the crisis response phase, post-crisis phase, or both. Not all crises need reputation repair efforts. Frequently the instructing information and expressions of concern are enough to protect the reputation. When a strong reputation repair effort is required, that effort will carry over into the post-crisis phase, or Crisis managers may feel more comfortable waiting until the post- crisis phase to address reputation concerns. REPUTATION REPAIR  Crisis managers follow a two-step process to assess the reputational threat of a crisis.  The first step is to determine the basic crisis type. A crisis managers considers how the news media and other stakeholders are defining the crisis.  Coombs and Holladay (2002) had respondents evaluate crisis types based on attributions of crisis responsibility.  They distilled this data to group the basic crises according to the reputational threat each one posed.  Table 6 provides a list the basic crisis types and their reputational threat. Table 6: Crisis Types by Attribution of Crisis Responsibility Victim Crises: Minimal Crisis Responsibility Natural disasters: acts of nature such as tornadoes or earthquakes. Rumors: false and damaging information being circulated about you organization. Workplace violence: attack by former or current employee on current employees on-site. Product Tampering/Malevolence: external agent causes damage to the organization. Accident Crises: Low Crisis Responsibility Challenges: stakeholder claim that the organization is operating in an inappropriate manner. Technical error accidents: equipment or technology failure that cause an industrial accident. Technical error product harm: equipment or technology failure that cause a product to be defective or potentially harmful. Preventable Crises: Strong Crisis Responsibility Human-error accidents: industrial accident caused by human error. Human-error product harm: product is defective or potentially harmful because of human error. Organizational misdeed: management actions that put stakeholders at risk and/or violate the law. Table 7: Attribution Theory-based Crisis Communication Best Practices 1. All victims or potential victims should receive instructing information, including recall information. This is one-half of the base response to a crisis. 2. All victims should be provided an expression of sympathy, any information about corrective actions and trauma counseling when needed. This can be called the “care response.” This is the second-half of the base response to a crisis. 3. For crises with minimal attributions of crisis responsibility and no intensifying factors, instructing information and care response is sufficient. 4. For crises with minimal attributions of crisis responsibility and an intensifying factor, add excuse and/or justification strategies to the instructing information and care response. 5. For crises with low attributions of crisis responsibility and no intensifying factors, add excuse and/or justification strategies to the instructing information and care response. 6. For crises with low attributions of crisis responsibility and an intensifying factor, add compensation and/or apology strategies to the instructing information and care response. 7. For crises with strong attributions of crisis responsibility, add compensation and/or apology strategies to the instructing information and care response. 8. The compensation strategy is used anytime victims suffer serious harm. 9. The reminder and ingratiation strategies can be used to supplement any response. 10. Denial and attack the accuser strategies are best used only for rumor and challenge crises. 3-POST-CRISIS PHASE  In the post-crisis phase, the organization is returning to business as usual.  The crisis is no longer the focal point of management’s attention but still requires some attention.  As noted earlier, reputation repair may be continued or initiated during this phase. There is important follow-up communication that is required. CONT… POST-CRISIS PHASE  First, crisis managers often promise to provide additional information during the crisis phase.  Second, the organization needs to release updates on the recovery process, corrective actions, and/or investigations of the crisis.  The amount of follow-up communication required depends on the amount of information promised during the crisis and the length of time it takes to complete the recovery process.  If you promised a reporter a damage estimate, for example, be sure to deliver that estimate when it is ready. CONT… POST-CRISIS PHASE  Crisis managers agree that a crisis should be a learning experience.  The crisis management effort needs to be evaluated to see what is working and what needs improvement.  The same holds true for exercises.  Coombs (2006) recommends every crisis management exercise be carefully dissected as a learning experience.  The organization should seek ways to improve prevention, preparation, and/or the response. Table 8 lists the Post-Crisis Phase Best Practices Table 8: Post-Crisis Phase Best Practices 1. Deliver all information promised to stakeholders as soon as that information is known. 2. Keep stakeholders updated on the progression of recovery efforts including any corrective measures being taken and the progress of investigations. 3. Analyze the crisis management effort for lessons and integrate those lessons into the organization’s crisis management system.  CONCLUSION  It is difficult to distill all that is known about crisis management into one, concise entry.  I have tried to identify the best practices and lessons created by crisis management researchers and analysts.  While crises begin as a negative / threat, effective crisis management can minimize the damage and, in some case, allow an organization to emerge stronger than before the crisis.  However, crises are not the ideal way to improve an organization.  But no organization is immune from a crisis so all must do their best to prepare for one.  This entry provides a number of ideas that can be incorporated into an effective crisis management program. CRISIS COMMUNICATION PLAN PUBLIC RELATIONS NIGHTMARES A Case Study Case study – Starbucks Handling Social Media Crisis WHAT IS CRISIS MANAGEMENT  References  Coombs, W. T. (2006). Code red in the boardroom: Crisis m anagement as organizational DNA. Westport, CN: Praeger.  Coombs, W. T. (2004b). Structuring crisis discourse knowl edge: The West Pharmaceutics case. Public Relations Revi ew, 30, 467-474.  Coombs, W. T. (2004a). Impact of past crises on current cri sis communications: Insights from situational crisis comm unication theory. Journal of Business Communication, 41, 265-289.  Coombs, W. T. (1995). Choosing the right words: The devel opment of guidelines for the selection of the “appropriate ” crisis response strategies. Management Communication Quarterly, 8, 447-476.