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  1. 1. EDELMAN: CRISIS COMMUNICATION OVERVIEW Risk Management and Crisis Leadership: The Big Picture A company’s reputation and the image of its brands are valuable assets built through significant investments of money and time. A serious issue flaring into a full-blown crisis, or a sudden emergency, can put these assets - and the entire business - at serious risk. Mitigating this, there are three components to effective risk management: 1. Operational -- to ensure the chance of a physical emergency is minimised and response systems are in place to quickly manage any situation 2. Financial -- to ensure financial exposure is minimised 3. Reputational -- to ensure relationships with important stakeholders are managed, issues are identified before they develop into crises and appropriate preparedness systems are in place to ensure excellence in management response should the “worst” happen Academic research, Edelman’s own research and our years of global experience have shown that without this third element - good REPUTATIONAL reputational risk management - companies will suffer badly in the event of a crisis even if their PROTECT operational and financial risk THE management is to a global BUSINESS standard. In other words, all three elements are needed for true FINANCIAL OPERATIONAL protection against risk. Unfortunately, many companies spend time and money on the first two elements, but often neglect the third. “Crisis Communications” – What is it? Crisis Communications is the area of Public Relations which deals with reputational risk management. Crisis communications involves three core elements: crisis prevention, crisis communication preparedness and crisis communication response.
  2. 2. 1. Prevention “An issue ignored is a crisis invited” – Henry Kissinger 1 As referenced earlier, crises put CRISIS PREVENTION business at risk because of the operational and financial problems they cause, and the reputation and PROTECT brand damage that may result. BUSINESS 3 REPUTATION 2 Good crisis prevention involves sound on-going issues CRISIS CRISIS management. RESPONSE PREPAREDNESS Issues management involves building and maintaining strong relationships with key stakeholders - the people who matter to your organization. Depending on the nature of your business, these may include the government, the media, the local community, your suppliers, shareholders and investors, customers, employees, your key industry bodies as well as many other important groups. Edelman helps client companies manage issues and relationships to prevent issues flaring into crises and to ensure that if a crisis occurs, clients have the most goodwill possible with each stakeholder to help minimise any reputational or brand damage. But issues management is about more than just avoiding crises. A formal issues management program can enhance business relationships and improve the business environment to help strengthen your competitive advantage. 2. Preparedness It may seem surprising, but research proves it is not uncommon for companies to emerge from a crisis in a much more healthy state than when they went in. This is because companies who respond well to crises often impress investors, the government, the media and the community -- so much so that these key stakeholders’ respect and support for the company rises dramatically. Research and experience also shows that the key to recovering quickly and emerging strongly from a crisis lies in the perceived quality of the management team’s performance during the crisis. In other words, a good performance, and a performance that was seen to be good. That’s why good crisis communication
  3. 3. is as vital as good operational and financial crisis management. Good performance always comes from good preparation. Edelman can help develop a crisis communication plan that is right for your organisation and we can train your people in crisis response through simple desk-top role-play crisis simulations to full-scale crisis drills. Key to management’s successful performance are leadership, public visibility and regular communication from the highest level of management. To this end, Edelman also offers spokesperson training programs, so that key spokespeople are ready to face an often hostile media, government officials with their own agendas, and worried customers and employees. 3. Response Companies and organisations face and solve problems on a daily basis – that is the nature of business and a key task for management at all levels. However, any problem takes on new dimensions as soon as it escalates or is driven into the public domain. In terms of planning for the handling of serious issues or crises, the cross-over point into the public domain becomes of critical importance. Edelman has termed this point the Public Domain Interface (PDI). Post-event analysis of every issue Public Domain CMT and full crisis support or crisis of major proportion shows that early warning signals could Key management respond and should have been picked up and CMT readied sooner. In all cases the full effects PDI of the subsequent disaster would have been mitigated had rapid Increased monitoring and responses and actions been Company vigilance initiated at these critical early stages. Business as usual with 360° monitoring network Edelman recognises this issue and has developed a planning tool which assists management to recognise and capitalize on the various stages of live issues and potential crises. When applied to both crisis planning and handling, the simple colour code system equips issues and crisis managers to react speedily and with the appropriate levels of response. This proprietary management philosophy and set of tools is CARM (Crisis Alert Response Management). CARM uses a four-colour code system to determine appropriate response levels. Edelman is then able to provide clients the appropriate support in both strategic response planning and implementation whenever issues move into the public domain or crises occur.
  4. 4. How can Edelman help? Edelman can help with every stage of reputational risk management. But naturally, there is no “one-size-fits-all” approach. Levels of risk differ from business to business. It’s also important to be sensible about your level of investment in risk management. For example, a large multi-national oil company with a high risk profile would have very different requirements to a retail company operating in only one market. Edelman’s approach is superior because it is tailored specifically to meet your business needs. Further, our “Relationship Imperative” philosophy (see www.edelman.com) provides a unique and well-researched approach to developing corporate reputation and stakeholder relationships built on trust. Some of the services we provide include: 1. Prevention “Reputation Protection” Issues Management System Edelman’s has a simple, practical system for on-going stakeholder relationship management and issues management to prevent issues flaring into crises. Issues are mapped, tracked and managed on a continuous basis employing the CARM colour-coding system. Where appropriate, strategies are recommended for relationship management with your most important stakeholders. CARM Workshop A straightforward half-day training program and workshop for key executives to rapidly create “buy in” and awareness of good issues management and crisis prevention practice. The workshop also begins the process of mapping the business’ key stakeholders and the issues of importance to them. This is the first phase of the “Reputation Protection” system. 2. Preparation Edelman will audit your current level of crisis communication preparedness and make recommendations as to your specific needs. Edelman will update or implement your Crisis Management Plan so that the communications component achieves world class standards. Edelman will conduct Crisis Communication Response Training for your key management and staff who will be involved in handling communication response during a crisis. This usually includes your in- house PR and Marketing teams and your HR team, but may not be limited
  5. 5. to these groups. Depending on the specific requirements of your organization, training programs may include: Concise, practical theory sessions “Desktop” simulations Full response drills Edelman strongly recommends your key spokespeople are properly prepared for handling the media in a hostile environment. In addition to conventional media training, senior crisis spokespeople should participate in the Crisis Media Spokesperson Training. This session equips management with the key skills required to handle very difficult media environments and to convey the appropriate leadership, care and concern required to project strong leadership in crisis – the key to successful crisis management. 3. Response Senior strategic counsel for your Asia-Pacific management when they need it most from a dedicated team of crisis professionals Resources to support your team locally, regionally and globally with: Media monitoring and translation Multi-nation call centre support Media, government and investor relations Employee Communication Brand and reputation recovery post-crisis For more information For an initial consultation about Edelman’s Crisis Communications and Issues Management services -- and how we can design the right support for your organisation -- please contact: Charles Lankester, Managing Director Corporate Practice, Asia-Pacific Edelman 701 Central Plaza, 18 Harbour Road, Hong Kong Direct: +852-2837-4729 Fax: +852-2804-1303 Mobile: +852-6773-5127 Email: charles.lankester@edelman.com ###