In Case of Emergency
The recent corporate scandals reminded me of the huge impact a crisis can have on a brand and of the importance of having a crisis management plan in place before a crisis hits. As I observed how the management of Enron, Martha Stewart and Arthur Andersen handled their individual crisis, I was fascinated by what seemed to me an appalling disassociation with the brands they'd so carefully built over the years. It appeared that even these mega-corporations had not properly prepared for the crisis situation in which they found themselves.
On the other hand, I was very impressed with Quad/Graphics' handling of the one-two punch it recently had been dealt. First, there was the horrible fire in the Wisconsin plant that left one person dead. Then, came the untimely death of Harry Quadracci, who was not only the visionary head of the company, but also one of the industry's most respected spokespersons. The thoughtful and prompt response to both tragedies suggested to me that they had done their homework in crisis preparation. However, the ultimate impact of Quadracci's death to the Quad/Graphics' brand remains to be seen. Will the placement of his wife on the board quell shareholder and customer fears of loss of leadership?
What Constitutes a Crisis?
While I doubt most of us will have a crisis of the same magnitude as these large companies, many of us will confront times that can be potentially damaging to our brand. It's interesting to note that none of the mega-corp scandals involved product failure, such as what befell Firestone tires. Instead, management failure caused the crisis, which is particularly egregious, since it is the CEO who should lead the development of a crisis plan.
A crisis can be the result of product failure, human failure, management failure, natural disasters, as happened to Quad/Graphics, and, lest we forget, terrorism, and its effect on businesses in the World Trade Center. The impact a crisis may have on a company's brand is dependent upon several factors, including the strength of the brand at the time the crisis. The Martha Stewart brand, for example, was so strong at the time of the ImClone scandal that, in my estimation, had she chosen an open, honest communication strategy in response to the crisis, her alleged misdeeds would have been forgiven by her key brand torchbearers.
Several years ago, we were asked to advise management of a large San Francisco-based law firm on the handling of a sexual harassment suit they believed imminent. Our advice was to confront the allegation head-on, while at the same time publicize the many pro-feminist programs the firm had consistently implemented. In fact, the firm had an established reputation as one of the most progressive in terms of hiring and promoting female attorneys to senior partners. This was a critical brand attribute that, supported by testimonials from the firms' many female attorneys, helped mitigate the harassment charge in the eyes of the public, customers, and shareholders. The case was never brought to trial.
The law firm experience was particularly ironic because legal counsel and brand managers are usually at odds over how best to deal with a crisis. Legal counsel generally advises clients to remain silent for fear of self-incrimination, while brand communications experts advise clients to "tell the truth, tell it all, and tell it fast."
Crisis Preparation Guidelines
Of course, if senior management is the cause of the crisis, there's little hope of preserving a company's brand equity. The old saying, "the fish rots from the head," is especially portentious, given the current corporate scandals and the public's increasing mistrust of business in general. However, according to most brand specialists, the public will give a strong brand at least one chance to make a mistake.
Hopefully, the crises we may confront will not be of our own doing, but rather of circumstances beyond our control. Responses to product failure, a natural disaster, or even a terrorist act can be prepared for in advance to protect our brand asset. Here are some guidelines:
1. Appoint a crisis management team comprised of the CEO, senior management, public relations staff, and legal counsel.
2. Identify and train a spokesperson, ideally the CEO, who believably and empathetically represents the interests of all customer tiers, from employees to shareholders.
3. Sketch out "worst case scenarios" of possible crisis situations and identify customer tiers that will be most affected. Crisis scenarios may range from product failure with a major customer to a natural disaster that halts production.
4. Prepare internal response strategies to each crisis scenario. These might include pre-arranging a contingency production partnership, an employee hotline, and emergency vendor communication channels.
5. Prepare external response strategies to the media. Identify and build relationships with key local business and trade media, so you become the trusted "source" of information at the local level. Unless your crisis is a disaster of national proportion, media coverage will begin at home. Cultivating open, honest communications now with your local media will enable you to take control of the story and its repercussions.
6. When a crisis hits, prepare a simple message with no more than four points: This is what happened. These are the people who were affected. This is what we did in response. And this is what we're doing to make sure it doesn't happen again.
7. Take responsibility. If the buck stops at your door, don't abdicate or point fingers. Your integrity and leadership is likely the biggest reason employees and customers remain with you.
8. Protect your employees and customers. These are your most critical brand stakeholders; they should be top priority in your crisis communications strategy
Most important, if or when a crisis hits, don't fall silent and hope it'll go away. It won't. Your detractors, competitors and the media will quickly fill the communications void. You'll be left with the business of rebuilding a brand that took years and lots of money to establish.
Charlotte Mills Seligman is president of Traversant Marketing Communications. The firm specializes in planning and executing integrated marketing programs for printing and allied graphic arts companies, with nearly two decades of expertise in the industry. Previous columns and issues of the company's Ti Monthly e-newsletter are posted on http://www.traversant.com. Inquiries should be directed to (415) 357-2929 or charlotte @traversant.com.
© 2002 Charlotte Mills Seligman
October 25, 2002