Tuesday, August 10, 2010

Crisis Response Is All About Balance

As I wrote recently, BP's handling of the public relations disaster it was faced with following the Deepwater Horizon disaster surely won't be taught to students as a template for crisis communications. However, when it comes to crisis response, it's important to note that a balanced approach is key to minimize damage.

This month's crisis involving a major business brand involves Hewlett-Packard's decision to fire former CEO Mark Hurd following a sexual harassment claim from a woman who worked as a contractor for the company. Seeking to counter the notion that boards of directors are often asleep at the wheel and slow to respond, the company's board pressured Hurd to tender his resignation, which he did on Aug. 6. While the company certainly hoped Hurd's departure would make the issue disappear and allow the firm to return to normal, in some ways, it's been anything but that.

The New York Times reported on Tuesday that the company followed the advice of its PR counselor, APCO, which told the company's board the best stance would be to fully disclose all elements of the case, ranging from the unsupported allegations of sexual harassment, to Hurd's alleged falsification of expense reports – itself grounds for termination. One would imagine both APCO and HP were calculating, and certainly hoping, that in the end this would be the best course of action. However, in the ensuing days following Hurd's departure, the company has endured a mixed bag, with corporate governance experts saying the board acted appropriately, while many others see Hurd's departure as an event that could harm H-P's long-term performance and its ability to transform itself into a services company along the lines of IBM.

While most PR pros won't be called into handle a crisis of this magnitude, this situation is also one that can serve as a template of sorts because it perfectly illustrates how crisis response involves making tough decisions that involve alternatives that all look dangerous. Generally speaking, crisis communications pros do recommend companies to take swift command of a situation because you don't want to appear oblivious to a crisis, a la BP. However, that doesn't mean that a swift decision on big issues should be an immediate reaction. If you recall, what got BP so much negative press was the fact that many executives were seen as viewing the disaster as an intrusion into their lives. Certainly, no one was happy that it took as long as it did to cap the well, but on the whole, that wasn't the key fact that made it such a crisis for the company.

Likewise, many believe HP should have taken the time to conduct a more thorough investigation of the alleged harassment. If, following an investigation, the evidence showed that Hurd did act improperly toward the former contractor, then HP's board would have been on firm ground to dismiss him. However, if an investigation determined that there was little or no evidence of harassment, then shareholders, customers and most other influential groups would have probably supported the board's decision to keep him.

What both of these cases show is that it's often the mishandling of information during a crisis, and not necessarily the decisions made in its wake, that bring the most harm to a company's reputation. Influential audiences want a company to conduct a thorough investigation so that all the key facts can be unearthed because this will likely result in smoother sailing for the company later on, regardless of the specific circumstances. These cases show that what companies involved in a crisis need to do quickly is communicate all the information they know about a crisis and provide regular updates to key audiences. Also, they should ensure that the company's CEO, or another high-ranking official, quickly assumes the defacto post of crisis czar and always appears in command of the situation.

Finally, it's important that your messaging remain consistent. In other words, don't give one set of messages to one audience and a separate message to another based on what you fear their reactions might be. It's better to be open and honest from the "get go" rather than risk the chance that the attempt to over manipulate the message will come back to "bite" later.

The last, and sometimes most important, piece of the crisis communications puzzle is the crisis response plan. This plan lays out the procedures that must be taken in the event of a crisis and designates the individuals that will perform key tasks, such as communicating with employees or the media. Every organization that faces the prospect of dealing with a crisis, even if that crisis at first seems mundane, should have a crisis communications plan. In addition, you should make sure that every key employee is aware of its existence and clearly understands his/her responsibilities should a crisis occur.

Remember that every organization, no matter how large or small, faces significant consequences from improperly handling or responding to a crisis. Given that, it's important to make an investment in planning now to avoid a big problem down the road.

Tuesday, August 03, 2010

BP Spill Likely to Serve as Template for Bad Crisis PR

When a company finds itself in a crisis that matches the level of the Deepwater Horizon disaster in the Gulf of Mexico, odds are a wave of bad publicity will be coming your way regardless of what steps you take to correct the disaster and how you handle the PR aspect of the crisis. We all know that this disaster will rank as the worst environmental catastrophe in our country's history. At this point, I'd say the public relations response will also rank as one of the worst as well.

From the beginning, the parties involved, which not only include British Petroleum but Transocean and other international players, did almost nothing right when it comes to communications. Rather than portraying an image that they were taking charge of the situation, everyone almost immediately began to pass the buck and start debating who was at fault and who bore the primary responsibility of responding and cleaning up the disaster.

That type of strategy showed from the get-go that the executive suite, and particularly those involved with and concerned with the company's ongoing financial affairs, were in charge of the response. No one with any training in crisis communications would have handled things the way the parties involved did in the beginning. What has transpired since is a situation that could pose as serious a threat to BP, like Johns Manville.

Never heard of them? The company developed asbestos, which was used in a variety of commercial purposes following its debut in the 1930s. Virtually all the pipes in this country were made from asbestos before the advent of PVC a few decades later. Johns Manville was one of the nation's industrial giants until financial losses that were the result of lawsuits filed over the lung damage caused by asbestos drove the firm into bankruptcy. It reorganized under bankruptcy protection in the late '80s and became part of the Berkshire Hathaway conglomerate in 2000. It hasn't manufactured asbestos in decades and still is a leader in a variety of building-product categories.

The point of that anecdote is that many executives are foolish enough to think that missteps will never cost them dearly, no matter how big the failure. Many always believe their company will be a large enough ship to withstand any wave, even though history is full of examples to the contrary. While no one thinks of it at the time the collapses begin, one of the key threads in many disasters of this type involve communications and the way a company handles crisis response.

This makes it vital to think about how you and your client or the company for which you work will respond to a crisis should one occur. The first and most important rule is to develop a crisis communications plan in advance and make sure everyone in the organization is aware of it and the procedures that are to be followed. All it takes is one person, no matter what level of the organization he or she occupies, to be "off script," and major damage can be wrought.

The second rule is to realize that once a crisis hits, you'll be in the limelight and likely may stay there for quite some time. One of the reasons BP CEO Tony Hayward got so much negative press about that now-infamous golf outing is not only because people found it in poor taste, but also because they couldn't believe he would let himself get caught golfing in the midst of a crisis. Being in the limelight obviously has its perils, but it also presents a unique time to take command of a situation and reverse a bad situation quickly. Smart companies do all they can to turn the situation around as quickly as possible.

Another wise tactic to follow is to make sure that anyone in your organization or working for a client has been media trained. Many executives like to think that they've got a "gift" when it comes to media relations, but honestly few do, and you don't want to take that chance with your client. If you have a good relationship with the client, they should be willing to take your counsel when it comes to media training and other elements that are vital to the successful handling of a crisis. If they aren't willing to take your counsel, that should raise big, red flags.

With any luck, most of you won't find yourself in the midst of a major communications crisis. However, PR pros often are surprised to find themselves in the middle of a crisis -- either because they thought they did everything to avoid one or because they thought the client was too "mundane" to ever find itself in the midst of one. As is the case with any disaster, the best defense is preparation. Good preparation can not only safeguard your client relationship and the success of your PR and communications program, it might very well save your client from ruin.