If I told you that a crisis is an opportunity for businesses to increase shareholder value, would you believe me?
Walking into PRSA’s Introduction to Effective Crisis Response seminar in Chicago on May 22, I viewed crisis management as an overwhelming, fast-paced communications task that meant hours of anxiety. Far from an opportunity. The workshop, led by Helio Fred Garcia and Adam Tiouririne of the Logos Institute, was an eye-opening experience that left my colleague and me confident that we can use crisis management as a way to create a powerful competitive advantage for our clients.
Advantage? Yes. At a moment when all eyes are on your company, you have more control than you think. When done right, your ability to manage crises can have a positive impact on your brand’s bottom line. In fact, based on research by Knight and Pretty with the University of Oxford, companies that respond to crises well not only protect their stock price but increase it, by an average of five percent. On top of its stock, a company’s reputation, operations, employee morale, demand for products and services, and strategic focus are protected when crises are handled well.
So, how can you go about managing crisis the right way? Here are four key steps PR practitioners at any business should follow:
Know the patterns.
Bad things happen, even to good people and organizations. It’s what you do next that counts. Historically, there are approaches that always work and those that never work. Understand the patterns by studying crisis and harvest the learnings—especially those occurring in your industry. How did the company respond? When did they respond? How was it received? Once you know this, understand you must intervene early enough to change the pattern.
Know what to ask.
When your CEO runs to you and asks, “What should we say?” you must begin by knowing which questions to ask. In order to regain the trust of your stakeholders, the most important question to ask is “What would reasonable people appropriately expect a reasonable organization to do in this situation?” Don’t be burdened by the thought that a common sense solution won’t work.
Know what to say, and when.
Once you have the answer to your question, keep in mind that the single biggest predictor of reputational harm in a crisis is the perception that you don’t care. Craft responses to the “what reasonable people expect” question at the granular level for each stakeholder group. Communicate these responses in a timely way that shows you care.
Gain first mover advantage.
Whoever is first to define the crisis, the company’s motives, and their actions wins. Don’t let the media be the first to define these. Be prepared by establishing a crisis response plan. Craft well-structured standby statements ahead of time that address acknowledgment of potential crisis events, frame your organization’s values, your approach for addressing the event, the actions you plan to take, and next steps for your company and stakeholders.
Having a structured crisis management plan makes courage (and anxiety) less necessary. When done right, you will remain calm, regain the trust of your stakeholders, and they will likely reward you for demonstrating skill during a time of catastrophe.