In the Hot Seat, Smart Responses in the Face of Corporate Crisis

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The ever evolving corporate landscape can be exciting and daunting. As technology, management and the workplace evolve so do many possible different crisis. They are are less obvious and can be much …

The ever evolving corporate landscape can be exciting and daunting. As technology, management and the workplace evolve so do many possible different crisis. They are are less obvious and can be much more difficult to anticipate. This presentation explores a process that will help you understand emerging crisis and how they should be approached.

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  • 1. Stacy Armijo Senior Vice President Pierpont Communications
  • 2.  Reductions in force  Plant closings  Discrimination  Workplace violence  Loss of life  Litigation  Environmental accidents  Online security breaches  Bankruptcy  Boycotts and protests  Labor issues  Mergers & acquisitions  Product recalls  Employee misconduct  Outsourcing  Fraud  Weather, disasters  Terrorist situations  Shareholder activism  Regulatory targeting Some you can anticipate, some you cannot
  • 3.  Long-standing policies that could present new challenges  Negative reactions to new policies  Product / campaign launches that fall flat  Employee issues (work-related and otherwise)  Upcoming regulatory challenges
  • 4. Review & Recover Act & Adjust Assess & Diagnose Listen & Anticipate
  • 5. Get “in the know”  What are the controversial topics in your industry? Are you conversant in them?  Would you be looped in on sensitive employee issues?  Would you be informed of unusual legal matters?  How would you be notified of an upcoming service interruption or new product roll out? Get out of “the bubble”  Do you know employees in multiple areas outside your reporting structure?  Do you follow social & traditional media relevant to your industry?  Do you engage with other industry players outside your company?
  • 6.  What do we know (not “think” or “suspect”)? What don’t we know?  What are we doing now? What do we plan to do in the future?  How might this affect our organization? Among whom?  For each audience…  How widely known now? In the future?  How will their knowledge affect our organization?  How could we address their concerns now? In the future?  Should we communicate? If so, how, what channels, when?  What policies might apply? Did we act in accordance with them?  Who will decide if / how to communicate? Who should review communications?
  • 7.  If you don’t identify the issues, someone else could (at your organization or outside it), affecting the response.  The first to speak (if you choose to do so) shapes the issue.  Prompt action sends positive messages about the importance of the issue and professionalism of the organization.
  • 8.  Customers  Students  Investors  Alumni  Members  Competitors  Regulators  Donors  Vendors  Contractors  Suppliers  Employees  Strategic partners  Financial analysts  Industry analysts  Faculty  Legislators  Clients Plus, “industry” (prospective customers, employees, partners, etc.)
  • 9.  No hard and fast rules; exercise judgment based on answers to all of your questions in the assessment  Be the baby bear… not too little, not too much  Don’t stick your head in the sand when your marketplace pulse is clear an issue exists  Don’t issue a news release to combat the perspective of a limited few with no influence  Recognize that responses will evolve, so you can start small / focused while being ready to escalate, if needed
  • 10.  Plan the “who,” not the “what”  Reps on the Issues Management Team  Executive / Ownership + relevant operations  Communications (internal, external, gov affairs)  Legal  Human resources  For active crisis, name a lead  Speeds decisions, crucial to timely response  Should not be person “putting out the fire”  Consider each audience, assign liaisons to guide communications, keep pulse
  • 11.  Immediate action + long-term outlook = Smart response  Communication style: Straight-forward, candid, like a real human being  Choose your spokesperson carefully and prepare them effectively  People first, always; Don’t speculate, ever  When you can’t say, say what you can  To communicate unpopular positions, focus on the process in addition to the outcome  Be extra careful with communications; they could all become subject to discovery
  • 12.  Be the source of crucial information  Be the cool head in the room  Speak in possibilities and liabilities, not opinions and ultimatums  Your domain is anticipating reaction among external audiences to decisions / announcements (or lack of action); own it and share your perspective  Some of my favorite phrases…  “Help me understand how this affects so-and-so?”  “If we were asked…, how would we respond?”  “One possibility is…, how should we prepare for that?”  Don’t be afraid to take on the attorneys to balance legal liability with reputation damage (both of which have substantial cost)
  • 13.  Operate at a business-as-usual pace  Point fingers, outside or inside your organization  Assume you can control every aspect of your response  Talk to and make decision based only on those “in the bubble”  Be defensive, in either manner of response or tone of messages / spokespersons  Let technology or personnel paralyze you
  • 14. Issues and crises are constantly evolving. The right course of action last year, last month or even last hour may no longer be best in light of new information or changing sentiment among audiences. Keep the pulse and constantly assess whether the current direction, in method and message, is still the right one and make recommendations accordingly.
  • 15.  Remember, it’s probably not as bad as you think  Recovery is a marathon, not a sprint  Recovery from one bad quarter financially requires 7 consecutive quarters of positive performance  Netflix: Just hit one billion in revenue for a quarter (a record) and still hasn’t fully recovered its stock price from 2011 policy change  To take fuel out of the old story, start a new one (and avoid “going underground”, leaving the market’s last memory of you a bad one)  Before and after, focus on depositing into your “goodwill bank”
  • 16. Stacy Armijo Senior Vice President & Austin General Manager Pierpont Communications 512-448-4950 sarmijo@piercom.com www.piercom.com