University of Miami Challenges Company May Face when Dealing with A Crisis Discussion

Discuss several challenges that a company may face when dealing with a crisis. In your opinion, are companies ready for a crisis that can occur? Provide one example of a recent crisis where an organization was ready. Provide one example of a recent crisis where an organization was not ready. When writing your discussion, sure to include examples from the assigned readings/videos (In addition, you may also include personal experiences).

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Are Organizations Ready for Crisis?
A Managerial Scorecard
Anne H. Reilly
This exploratory study sought to develop and test a new
construct, “crisis readiness,” and to examine the relationship of organization size, prior experience with crisis,
and managers’ job level with crisis readiness. A survey
methodology was used to measure managers’ perceptions
of their organizations’ levels of readiness for crisis. In
the sample of managers surveyed, the seventy.^nine
respondents reported on average slight agreement that
their organizations were ready for crisis, although they
disagreed on average that they were well-informed about
their organizations’ crisis management repertoires. The
study found strong support for the hypothesis that increasing size is associated with increasing crisis readiness,
and partial support for the hypotheses that prior experience with crisis and higher job levels are associated with
higher crisis readiness scores. The implications of these
results are discussed, together with some suggestions for
organizations concerned with increasing their readiness
for crisis.
AS THE BUSINESS environment gets
more complex, so do the crises experienced by organizations. The examples of Tylenol, Challenger, and
Bhopal illustrate that major crises not
only affect the organization involved,
Anne H. Reilly is a doctoral candidate in
the Department of Organization Behavior,
Kellogg Graduate School of Management,
Northwestern University, and a former
commercial banker. Her primary research
interests are organizational crisis, strategy,
and change. She is presently at work on
her dissertation, which focuses on strategic
preparation for better crisis management in
the banking industry.
The author gratefully acknowledges helpful
comments by Robert Duncan, Denise Rousseau, Larry Cummings, and Robert Dewar
on an earlier version of thispaper.
but also have significant repercussions
throughout the community, the industry, and sometimes the world.
Crisis management is becoming an
increasingly important issue as managers seek ways to cope effectively
with these high-magnitude threatening events.
To date, most of the organizational
behavior research on crisis has focused
on case studies of specific crisis
events, frequently political crises (Hermann, 1972; Allison, 1971; Starbuck,
Greve & Hedberg, 1978). The study
described in this paper uses a different
unit of analysis. Instead of concentrating on particular events, this
study addresses the general issue of
crisis readiness in organizations. The
study surveys individual managers
about their perceptions of .their firms’
readiness for crises. Managers are
an important component of an organization’s readiness for crisis because managers are critical actors in
any organizational change situation
(Tushman & Romanelli, 1985; Hambrick & Mason, 1984).
This empirical study had several
goals. First, .this study proposed a
new construct, “crisis readiness,” and
conducted an initial empirical test of
the construct’s validity. The concept
of crisis readiness merits examination
because of its implications for effective
crisis management: an organization
which is ready to cope with crisis argue that an organizational crisis is for numerous reasons. First, crisis
should be better able to manage it, best viewed as a turning point (cf readiness strategies can improve the
ceteris paribus, than an organization Turner’s “precipitating event” (1976); environmental enactment process
which is not prepared. A survey in- Kanter’s “galvanizing event” (1983)). (Pfeffer & Salancik, 1978) through
strument was developed to measure
making potential crises salient to the
The definition of organizational firm (cf Kahneman, Slovic & Tversky,
perceived crisis readiness, and its
psychometric properties were assessed. crisis used here draws from Milburn, 1982). Identifying potential weak
This instrument is a useful diagnostic Schuler, and Watman’s concept of spots in the organization’s crisis mantool, enabling an organization to ex- organizational crises as “situations in agement repertoire, such as informaamine, from its managers’ perspective, which organizational survival is, and tion dissemination or media relations,
the firm’s ability to cope with tin- is perceived to be, at stake” (1983): can serve to counteract any illusion
expected threats. The instrument 1161). This definition implies ele- of invulnerability (Janis & Mann,
identifies weak spots in the firm’s ments of high magnitude, the need 1977) to crisis.
crisis management repertoire, and it for taking action, and the necessity
In addition, scholars and practican sensitize the organization’s mem- of a timely response. Specifically, the
alike have argued for the benebers to the possibility of crisis occurzational crisis as a situation which fits of rehearsing for crisis (cf Milburn
potentially threatens the existence of et al, 1983; Fink, 1986), as the miliIn addition, this study also sought the affected organization.
tary does with its war games. Kiesler
to explore the relationships between
and Sproull note that the process of
certain key organizational characterpreparing may be as important as
istics and perceived crisis readiness THE STRATEGY OF CRISIS
the content: “The plan itself may
rating. Data on these relationships READINESS
not work, but planning activities proare useful in determining what factors
Many researchers have noted that vide an opportunity for cognitive replay a part in improving an organi- an organizational crisis can serve as a hearsal of coping with high uncerzation’s readiness for crisis. Testing determinant of a firm’s strategy, forc- tainty” (1982:563). Finally, crisis
these hypotheses is also important for ing an abrupt change in a company’s readiness can serve as an important
purposes of integrating crisis readi- strategic plans and orientation (Mintz- means of building slack (Thompson,
ness into the existing organization berg and Waters’ “imposed strategy,” 1967; Pfeffer and Salancik, 1978)
theory research. Finally, this study 1985; Ouinn, 1977; Tichy, 1983). into the organizational system, slack
represents exploratory research with Van de Ven and Hudson (1985), sug- which can provide additional resources
the goal of learning more about the gest that crises may sometimes even be at a time when resource availability
domain of organizational crisis. The necessary for an organization to reach is critical. For example, if time and
data generated from this study will its action threshold for making needed managerial attention are assumed to
be useful in both theory-building and shifts in its strategic plan. As Pennings be crucial crisis management resources,
future research, as it provides some notes, “it may be a crisis situation a crisis preparation plan can serve to
insights into managers’ perceptions of that provokes a decision leading to a buffer the demands on those resources
the general organizational crisis do- change in the past strategy toward a during a crisis (Fink, 1986; Smart,
new direction in the future” (1985: Thompson, and Vertinsky, 1978).
A review of the organizational
crisis literature shows that crisis has
been defined in numerous ways, with
multiple criteria. According to Hermann’s definition (1963, 1972), a
crisis is a situation incorporating three
conditions: (1) a threat to high
priority goals; (2) a restriction in the
amount of time available for response;
and (3) a surprise to decision makers
(1972:13). The managers interviewed by Reilly (1986) suggested
that a situation represents an organizational crisis if it manifests the following five attributes: high magnitude,
requires immediate attention, an element of surprise, the need for taking
action, and is outside the organization’s control. Some researchers also
The view of organizational crisis
taken in this study adds a reciprocal
dimension to the relationship between
crisis and strategy. Not only does
crisis affect strategic outcomes, but
strategy affects crisis outcomes as
well. Like Hrebiniak and Joyce
(1985), this perspective proposes tiat
both environmental determinism (the
occurrence of threatening events) and
strategic actions (an organization’s
crisis management repertoire) must
be studied in order to fully explain
the crisis outcome. An organization
which has strategically prepared for
potential crisis should be better able
to manage the threatening situation,
ceteris paribus, than an unprepared
Strategic preparation for crisis is
critical to effective crisis management
The construct of crisis readiness is
proposed to have the six core com-
The forms and natures of possible
organizational crises are infinite, and
bounded rationahty clearly prohibits
organizations and individuals from
developing specific contingency plans
for every conceivable crisis situation.
Crisis readiness is therefore defined
broadly here as the readiness to cope
with the uncertainty and change engendered by a crisis. Crisis readiness
is an “umbrella strategy” (Mintzberg
and Waters, 1985): an umbrella of
crisis readiness general guidelines
which are appropriate for complex,
unpredictable, and uncontrollable environments (cf Mitroff, 1986).
ponents listed below. Each component
was operationalized in this study using
a separate subscale to assess managers’
perceptions of the particular dimension.
1. The organization’s ability to respond quickly to a crisis.
2. How informed the managers are
about the organization’s crisis
management repertoire.
3. Managers’ access to the organization’s crisis management plans,
resources, and tools.
4. How adequate the firm’s strategic crisis planning is.
5. The organization’s media management ability in a crisis.
6. The perceived likelihood of
crisis striking the organization.
Together, these components are predicted to denote how ready an organization is to deal with potential crises.
Organization’s Quick Response
In general, an organization unable
to respond rapidly to a potential crisis
will be less ready to manage that
crisis effectively (cf Milburn et al.,
1983; Reilly, 1986). Most crises are
characterized by a sense of urgency;
a rapid response is therefore critical
in controlling the damage or avoiding
the losses engendered by the threatening situation. Response time in crisis
may be determined by numerous organizational characteristics or procedures: e.g., its ability to make appropriate decisions quickly (cf Janis and
Mann, 1977; Kiesler & SprouU, 1982);
its flexibility (cf Harrigan, 1985); and
the level of organization members’
resistance to change (cf Staw, 1982;
Weick, 1982).
How Informed the Managers Are
If managers and other key employees know little about the resources
and tools allocated for crisis response,
they cannot be ready to deal with the
occurrence of unanticipated threats
(cf Turner, 1976). Their efforts to
respond to a crisis situation will be
short-circuited by the unavailability
of necessary information which can Organisation’s Media Management
be as basic as the home telephone Capabilities in Crisis
numbers of key managers or the
The fifth facet of crisis readiness
firm’s legal counsel. Furthermore,
in this study adds an exrestrictions in communication and internal
to the crisis manformation dissemination processes, as
well as content, can also endanger an agement repertoire. Efficient, rapid
organization’s crisis readiness (Mirvis internal operations may not be enough
and Marks, 1986; Staw, Sandelands & to ensure effective crisis management;
the organization may also have to
Dutton, 1981).
interpret a major crisis event to its
environment. According to one executive interviewed by Business Week,
Managers’ Access to Crisis
“If you aren’t geared up and ready
Management Resources
to inform the public [about the crisis],
An organization’s readiness for you will be judged guilty until proven
crisis depends as much on key per- innocent.” (12/23/85:75). Inmost
sonnel’s access to its crisis manage- cases, the interpreter of the crisis will
ment repertoire as it does on their probably be the media. Because the
level of infonnedness about that reper- potential consequences of mishandling
toire. Good decisions and knowledge the media can be so high (cf Fink,
about crisis management plans are of 1986), media management ability is
little use without effective deployment proposed as an important component
of resources (cf Smart, Thompson of crisis readiness.
& Vertinsky, 1978). Organizational
structure (such as Kanter’s integrative
versus segmentaUst organizations, Managers’ Perceived Likelihood of
1983) may determine resource access, Crisis Occurring
as may power and politics. Managers
Assumptions of rational organizamay vie for control over crisis mantional
behavior (cf Thompson, 1967)
agement resources: “emergencies are
suggest that an organization
distinguishing for the actors involved
. . . Crises are occasions for managers which perceives a high probability of
to demonstrate competence,” accord- experiencing crisis would attempt to
ing to Kiesler & Sproull (1982:562). deploy resources to prepare for such
an event, hence increasing its crisis
readiness. However, an organization
which is likely to be hit with a crisis
The Adequacy of Strategic
may not exhibit high levels of quick
Crisis Planning
response ability, informedness, access
This dimension aims to capture the to resources, media management caporganization’s overall focus on strat- abilities, and adequate crisis planning.
egically planning ahead specifically for
crisis. An organization with inadeEven if an organization believes
quate crisis planning may not be that it is subject to potential crises,
attending to tiie abrupt shifts or ac- it may not act on this attitude by
cumulating problems in its environ- preparing for them. Perhaps the orment (Turner’s “failures of foresight,” ganization has fallen prey to an “illu1976; Aldrich, 1979) which can pre- sion of invulnerability” (Janis and
cipitate a crisis. As Pfeffer and Mann, 1977) because of a sincere
Salancik (1978) note, if potential belief that the firm can handle anycrises are not salient to the organiza- thing the environment might throw at
tion’s selective perception mechanism, it. Or the organization may play
and such “environmental changes are ostrich, responding to a threatening
consistently missed, the organization environment with unconfiicted inertia
will be unprepared to face ithreats to (Janis, 1985; Janis and Mann,
survival” (1978:81). In addition, 1977) or threat-rigidity behavior
a firm with inadequate crisis planning (Straw et al., 1981). Furthermore, the
is unlikely to have specific resources perceptions of one manager may not
allocated to crisis preparation—e.g., coincide with those of the organizabackup computer systems or a public tion’s dominant coalition (Thompson,
relations department, thus lowering its 1967; Pfeffer & Salancik, 1978): alreadiness for potential crises.
though an astute individual manager
may perceive a high probability of Organization’s Size
crisis striking his organization, the
The substantial research on the rerest of the organization may assign lationship between organizational size
zero probability to the occurrence of and various organizational outcomes
provides conflicting implications reThe first five components of the garding the association between orcrisis readiness construct are all ex- gatiizational size and managers’ evalupected to be positively related to an ations of crisis readiness. Size was
orgatiization’s “crisis readiness” as operationalized in this study as a fivewell as positively related with each level continuous variable according to
other. However, because of the rea- the number of employees. The five
sons outlined above, the sixth pro- levels used were 1-25; 26-100; 101posed component — perceived likeli- 1000; 1001-10,000; and over 10,000
hood of crisis occurring — and the employees.
other five dimensions are predicted
On the one hand, some research
to be unrelated. Thus,
suggests that increasing size may be
associated with decreasing crisis readiHypothesis la:
ness. Large organizations may suffer
Managers’ perceptions of quick from cumulative control loss (Wilresponse ability, informedness, liamson, 1975), which restricts their
resource access, adequate crisis cotnmunication and itiformation displanning and media management semination ability, while resource acwin all be positively and signi- cess may become highly centralized
ficantly related with each other. and restricted in large firms (cf
Kanter, 1983). Hannan and Freeman
Hypothesis lb:
Managers’ perceptions of the (1977) argue that large organizations
likelihood of crisis occurring to are more likely than smaller ones to
their orgatiizations will not be exhibit structural inertia; hence, comrelated to the other five com- pared to small firms, big companies
could be less able to respond quickly
ponents of crisis readiness.
to a crisis situation. Big companies
in the life cycle stage of bureaucratic
THE RELATIONSHIP OF CRISIS decline may respond to potential
crises with formally rather than subREADINESS WITH OTHER
stantively rational behavior programs
(cf Dewar & Walsh, 1985). In StarThis study also sought to test some buck’s (1983, 1985) terms, they may
hypotheses concerning the relationship act as bureaucratic action generators,
between certain key organizational responding with an tmreflective, invariables and perceived crisis readi- appropriate approach to a potential
ness. Three factors were proposed crisis.
as important independent variables inIn contrast, other research on size
fluencing managers’ perceptions of
their organizations’ crisis readiness: imphes that larger orgatiizations may
(1) the orgatiization’s size; (2) the be more ready to cope with crisis than
company’s prior experience with crisis smaller firms. Because bigger organi(two organizational-level variables); zations tend to have more slack reand (3) the manager’s job level (an sources (Katz & Kahn, 1966), they
individual-level control variable). As may be more able to survive the enwill be discussed below, prior research virotmient resource scarcity engenderyields conflicting predictions concern- ed by a crisis than may a small uning the direction of these variables’ dercapitalized organization (Aldrich,
1979). Increasing size has been aseffects on crisis readiness scores.
sociated with an increasing number
An aggregate measxure of crisis of specialized functions and standardreadiness consisting of the sum of all ized procedures (cf Pugh, Hickson,
item scores on the six subscales was Child & coUeagties, 1963, 1972,
used as the dependent variable in 1974); hence, big companies are
testing this model. A low score on more likely to have specialized crisis
this aggregate measure denotes a high management teams and tools than
smaller organizations. Furthermore,
degree of perceived crisis readiness.
because of their larger resource pool
and specialized structure, bigger organizations will be more apt to have
specific boundary spatining activities
(Thompson, 1967; Pfeffer & Salanick,
1978), such as public affairs departments or economic and industry analysts on staff. This focus on the
environment could increase crisis
readiness through improving the organization’s quick response ability and
crisis preparation orientation.
Here, it is proposed that the benefits of more resources, specialized
functions, and greater environmental
scanning will outweigh the disadvantages of structural inertia and bureaucratic action generation in perceptiotis
of crisis readiness. Hence,
Hypothesis 2:
As organizational size increases,
crisis readiness scores increase.
Organisation’s Prior Experience
with Crisis
As with the research on size, the
organizational theory literature has
some contradictory implications for
the relationship between prior experience with crisis and present level of
crisis readiness. A dummy variable
was used to operationalize past history
of crisis in this study.
Some research would suggest that
past experience with crisis may yield
some organization behavior which
makes the company less ready to cope
with future crises. For example, a
prior crisis may have strengthened defensive routines (cf Argyris & Schon,
1978) or conflict, (cf Milburn et al.,
1983) within the organization, or engendered the threat-rigidity effects
noted by Staw, Sandelands, and Dutton (1981), all of which could lower
the firm’s quick response ability as
well as restrict information dissemination and resource access. Furthermore, several researchers have argued
that organizational actions are characterized by rigid tmderlying assumptions which are difficult to change (cf
Mitroff, 1984; Starbuck, 1985; Weick,
1982). Such assumptions (for example, “money spent to prepare for
something which will probably never
occur is money wasted”) may persist
despite strong historical evidence to
the contrary (e.g., poor performance
in prior crises), keeping the organization’s crisis readiness low.
However, other research provides the
opposite implications, suggesting that
organizations which have experienced
crisis in the past should exhibit
greater readiness for future crises.
Proponents of organizational learning
(cf Argyris & Schon, 1978) would
argue that an organization which has
been through a crisis should have
gained knowledge about how to respond to future crises from the crisis
experience. For example, if the firm
mismanaged its media relations during a prior crisis, the organization
would now be more knowledgeable
about dealing with the media. Vicarious learning may also occur (cf
House & Singh, in press) from the
organization’s industry competitors. If
the industry context is characterized
by recurring threats, the organization
may learn how best to cope with them
through both its own experience with
past coping behavior plus the observed
behavior of its industry competitors.
Furthermore, the sahence heuristic
(Kahneman et al., 1982) may affect
managers’ evaluations of their organizations’ crisis readiness. If the
company has had past experience with
an organizational crisis, especially recent experience (cf Hambrick, 1981),
managers at all levels may be aware
of and informed about the firm’s crisis
readiness repertoire.
The prediction made here is that
organizational leaming and salience
will outweigh threat-rigidity effects
and rigid assumptions in affecting
present crisis readiness levels. Thus,
Hypothesis 3:
An organization which has experienced a crisis in the past
will show a higher crisis readiness score than an organization
which has not experienced a
Manager’s Job Level
Given the methodology of this
study, manager’s job level was proposed as an important individual-level
control variable because of its potential inflationary impact on organizational crisis readiness ratings. Studies
by Hambrick and his colleagues (cf
Hambrick, 1981; Hambrick & Mason,
1984) of the effects of top management characteristics on organizational
outcomes have shown that job level
(along with other variables such as
age, education, and career experience) can affect an executive’s perceptions about his organization as a
whole. In this study, job level was
operationalized as a continuous variable with six levels, ranging from (1)
owner/officer to (6) line or staff employee. The same coder assigned all
job level ratings in order to assure
consistency across levels.
Seventy-nine individuals from seventy different organizations located
primarily in the Midwest voluntarily
completed the survey instrument. A
wide range of industries and occupations was represented in the sample
(Kish’s purposive sampling, 1965),
ranging from retail store manager,
newspaper editor, attorney, hotel public relations executive, banker, pharmaceutical researcher, marketing consultant, physician, academic administrator, accountant, engineer, software
sales manager, to entrepreneur. All
respondents were employed full-time;
97% were coUege graduates. Their
career backgrounds were varied. Fiftytwo percent of the sample reported
job experience in sales, marketing, or
distribution at some point during their
careers; 44% had had experience in
general management; 32% had
worked in finance or accounting; 29%
in human resources or public relations; 27% had worked in production
and operations; 20% had job experience in engineering, design, or R & D;
and 10% reported experience in legal
work. The mean tenure in their
present position was 3 years, with a
range in tenure from a few months
to ten years. The respondents ranged
in age from 24 to 75, with a mean
age of 36.
Several reasons may explain why a
higher job level may be associated
with a higher rating of crisis readiness.
First, compared to lower level managers, upper level managers tend to
have longer tenure with their firms,
and longer tenure has been related
to greater commitment (cf Salancik,
1977). Higher level executives who
are more commited to their firms may
tend to view their companies favorably across the board; this halo effect
may spill over into the crisis readiness rankings. Second, because of the
nature of their powerful positions and
their limited peer group, top executives may also be more prone than
middle or lower level managers to
the effects of illusion of control
(Langer, 1975) and group think
(Janis, 1985; Janis & Mann, 1977).
Upper level managers may thus be
more likely than lower level managers
to believe that they and their organi- Procedure
zation are ready to manage any crisis.
The survey instrument used in this
Finally, the salience heuristic (Kahne- study was a four-page questionnaire.
man et al., 1982; Kiesler & Sproull, For purposes of inducing a common
1982) may also play a part: the frame of reference, the cover letter
higher an executive is in the organi- included the following definition of
zation, the more likely s/he is to organizational crisis: “A situation may
know about and have access to any be considered a potential organizacrisis readiness resources the com- tional crisis if it represents a significant
pany has in place.
threat to the existence of the affected
organization.” In addition, three exThis study attempts to control for amples of organizational crisis were
the predicted positive relationship be- provided: Union Carbide’s industrial
tween managerial position in the disaster at Bhopal, the Tylenol tamphierarchy and the reported organiza- erings, and a hypothetical small contional crisis readiness ratings by in- struction company whose bookkeeper
cluding job level as a control variable. embezzled the company funds and
fled to South America.
Hypothesis 4:
The higher the job level, the
higher the crisis readiness score.
The first section of the survey instrument included twelve demographic
questions in three categories: organi83
zation (e.g., size, company’s experience with crisis); job (e.g., occupation, tenure in position); and individual (e.g., age, personal experience
with organizational crisis). The second
section of the survey consisted of
thirty items about organizational readiness for crisis and six items about
specific crisis management tools and
procedures. The respondents were
asked to rate their level of agreement
or disagreement with items 1 through
24 using a five-point scale anchored
by 1 = Stron^y Agree and 5 =
Strongly Disagree. The remaining
twelve items also used five-point
scales, but the anchors were specific
to the questions asked (such as very
important to very unimportant, or
very accessible to very inaccessible).
The five-point response array was
judged adequate, as only 3 respondents marked a few in-between values.
Two missing data values (“I don’t
know” and “Not relevant”) were
The crisis readiness items in the
survey instrument comprised six subscales. Each scale originally consisted of five items measuring the
respondents’ perceptions of the six
proposed dimensions of crisis readiness: quick response ability, informedness, resource access, media management ability, adequacy of crisis planning, and perceived likelihood of
crisis. One outlier item each was
eventually removed from the access,
media management, and likelihood
somewhat ill-informed about their organizations’ crisis management repertoires (mean response ^ 3.16). The
reliability indices were calculated by
SPSS-X using Cronbach’s alpha procedure (SPSS, Inc., 1986). As Table
1 shows, the reliabilities of these exploratory scales were good, particularly the scale reliabilities for crisis
planning, informedness, and quick
response ability.
ment were all positively and significantly correlated with each other,
and there was no statistically significant relationship between perceived
likelihood and the other five dimensions of crisis readiness.
Factor Analysis
One of the goals of this exploratory
research was to examine the construct
validity of the crisis readiness concept,
testing how the proposed subscales
related to each other (Ghiselli et al.,
1981). Table 2 summarizes the intercorrelations among the six proposed
dimensions of crisis readiness. The
table shows strong support for both
Hypotheses la and lb. As predicted,
quick response, informedness, access,
crisis planning, and media manage-
The survey items were factor analyzed in order to identify the common dimensions of perceived crisis
readiness underlying the measures.
The SPSS-X principal analysis procedure with a varimax rotation was
used (cf. Comrey, 1973). With 27
items, and using the “little jiffy” technique (Comrey, 1973), the factor
analysis yielded three factors. Given
that the crisis readiness construct proposed six dimensions, the principal
analysis procedure was rerun with
four, five, and six factors. But the
three-factor structure remained cleanest. These factors explained 53.2%
of the common variance in perceived
Scale Means and Cronbach’s Alpha Reliability Coefficients
No. Items
Quick Response
Access to Resources
Crisis Planning
Media Management
* On a five-point scale, with 1 = Strongly Agree
Measures and Indices
Table 1 lists the mean values for
the instrument’s six scales. As shown,
the respondents indicated strongest
agreement with the likelihood of a
crisis occurring to their respective organizations (mean response = 1.82).
The mean responses for the ability
to respond quickly, access to crisis
management resources, media management readiness, and crisis planning
scales were on the agreement side of
the scale ratings, with the mean values
relatively close to the neutral midpoint anchor. And in general, the
respondents considered themselves
Scale Intercorrelations
.41 * *
Crisis Planning
** p < .01 * p < .05 (two-tailed tests) n = 79 CoLUMBLA. JOURNAL OF WORLD BUSINESS crisis readiness. Table 3 presents the results of this factor analysis. The first factor generated explained 40.5% of the common variance. As shown, it appeared to be a general factor comprising high factor loading on all five Planning items, all five Quick Response items, all five Informed items, and all four Access items. The four Media Management items loaded together on Factor 2, while the third factor was comprised of the four Likelihood items. Regression Analysis This study also explored the relationship of crisis readiness ratings with several organizational characteristics. Table 4 summarizes the results of the multiple regression analyses. As shown. Hypothesis 2 was supported, as increasing organization size was significantly related (P < .02) to higher evaluations of crisis readiness. The results showed partial support for Hypotheses 3 and 4, with beta coefficients in the predicted direction but not statistically significant. As proposed by Hypothesis 3, a company which had experienced crisis in the past was associated with a higher level of current crisis readiness. Table 4 also shows that the higher the job level, the higher the crisis readiness score, as predicted by Hypothesis 4. As discussed above, perceived likelihood of crisis was predicted to exhibit a different response pattern than the other components of crisis relationship; thus, this component received special attention in the analysis. First, size, experience with crisis, and job level were regressed on an aggregate crisis readiness score which excluded the likelihood items, but the same pattem of results was observed. These three independent variables were then regressed on the likelihood subscale alone. In this analysis, past experience with crisis was shown to be a statistically significant predictor of crisis likelihood scores. Managers working for an organization which had undergone a crisis in the past rated their organizations as more likely to experience crisis SPRING 1987 than managers working for an organization which had never experienced crisis. The other two independent variables had a minimum effect on these results. DISCUSSION Construct Validity As discussed above, factor analysis of the survey item pool yielded TABLE 3 Factor Analysis of Crisis Readiness Items Item Dimension Communality FACTORS 1 35 Planning .82 .86 33 Quickness .72 .84 21 Planning .71 .84 14 Planning .72 .83 2 Quickness .67 .82 22 Informed .73 .80 15 Quickness .63 .76 31 Informed .65 .75 13 Quickness .57 .74 2 1 Planning .56 .73 17 Informed .66 .71 11 Informed .70 .68 8 Planning .44 .66 Access .58 .63 5 Informed .44 .59 6 Access .42 .55 32 Access .39 .55 Quickness .23 .48 19 Media Management .77 .61 9 Media Management .55 .71 34 Media Management .24 .47 4 Media Management .26 .47 10 Likelihood .73 .84 36 Likelihood .37 .61 3 Likelihood .31 .55 16 Likelihood .26 .50 12 7 .49 % Variance Explained 40.5 6.8 5.9 % Variance Cumulative 40.5 47.3 53.2 TABLE 4 REGRESSION COEFFICIENTS Variable Beta P Size -.279 .02 Past Experience -.105 n.s. .172 n.s. R2 Aggregate Crisis Readiness Score Job Level • T h e lower the score, the higher the crisis readiness .08 n = 79 85 a three-factor structure explaining a total of 53.2% of the common variance. Although this study proposed six facets of crisis readiness, this three-component factor structure may be explained if crisis readiness is conceptualized as comprising both internal and external elements. Factor 1 was a general factor loading on aU the Quick Response, Resource Access, Informedness, and Crisis Planning items. This pattern may imply that an organization's crisis readiness may include a four-facet concept comprising the firm's internal functionings. Perhaps these dimensions are perceived as too similar or too. closely related for managers to distinguish among them: e.g., quick response ability may be determined by level of informedness, resource access, and adequate crisis planning. This potential explanation is strengthened by the statistically significant intercorrelations among the four subscales; as Table 2 shows, no intercorrelation is less than .62. The remaining two scales broke out cleanly in the factor analysis. All four media management items loaded together on the second factor; all four likelihood items loaded onto Factor 3. These two dimensions reflect an external dimension of crisis readiness: the ability to interpret environmental demands (perceived likelihood) and the ability to communicate with the environment (through media management) . Therefore, among this sample of managers, an organization was perceived as ready for crisis if its internal house was in order—as reflected in the Quick Response, Informedness, Access, and Planning dimensions— and if its external activities were under control—Media Relations and Crisis Likelihood Assessment. The subscales themselves showed good reliability, as Table 1 illustrates, and they exhibited the predicted pattern of interrelationships. Table 2 indicates support for Hypothesis la and convergent validity (Cook & Campbell, 1979), with the first five dimensions positively correlated with one another (P < .05); in fact, nine of the ten intercorrelations were significant at the P < .001 level. In addition. Table 2 showed that, as Hypothesis lb predicted, there was no 86 statistically significant relationship between an individual's expectation of crisis occurring and his rating of any dimension of his organization's readiness for crisis. The results of both the scale intercorrelations and the factor analysis show clearly that managers can and do distinguish between assessing the probability or organiza-, tional crisis and assessing the level of organizational preparation for it. elli et al., 1981). Job level may not have emerged as a statistically significant predictor of crisis readiness evaluations because of this survey's sampling plan. The manager respondents differed across levels as well as across organizations, and they were expected to differ in their knowledge of their firms' crisis management repertoires. IMPLICATIONS AND CONCLUSIONS Relationships with Other Variables As shown in Table 4 above, the results of the multiple regression analyses provided strong support for Hypothesis 2, concerning the positive relationship between organizational size and perceived crisis readiness; partial support for Hypothesis 3, which predicted that a company which had experienced crisis in the past would be more ready for crisis at present; and partial support for Hypothesis 4 concerning the role of job level as a control variable in the equations. The link between organizational size and crisis readiness found in this study is a strong one supported by both the regression and the correlational analyses. No sigiiificant relationship was found between size and past history with crisis, or size and likelihood of future crisis. Hence, among this sample of managers, large organizations are not perceived to be more subject to crises; they are perceived to be more prepared for them. Furthermore, the correlation between size and job level was not significant, so the observed relationship between size and perceived crisis readiness is unlikely to be a sampling artifact due to job level of respondent. The fact that Hypotheses 3 and 4 received support in direction but not in significance may be a function of this study's methodology. For example, managers whose organizations have experienced crisis may rate their organizations more harshly in terms of their present crisis readiness because they remember the problems and mismanagement during past crises. Managers in companies who have not experienced crisis may therefore be rating their organizations' crisis readiness from a different baseline (Ghis- Crisis readiness data generated from managers' perceptions of their organization is important. This data is useful at the level of the single organization for measuring the managers' knowledge of the organization's crisis readiness procedures and plans, or assessing their access to crisis management resources. This survey can be used to identify weak spots in an organization's crisis management repertoire (e.g., media relations or communication networks), thus highlight-: ing potential difficulties in crisis management plan formulation or implementation. In addition, managers' perceptions about their organization's crisis readiness can be compared with the firm's public stance on crisis management planning, as one means of contrasting desired crisis readiness with actual crisis readiness. Furthermore, the results of this study have some broader implications for those firms concerned with increasing their readiness for crisis. According to this sample of managers, there is a strong likelihood that their firms may experience a crisis in the future. This high probability assessment implies that crisis management merits the attention of a rational organization (Thompson, 1967). However, despite these managers' overall opinion that crisis is a likely contingency for their firms, this sample of managers reported only slight agreement that their organizations were ready for crisis. This gap between high likelihood and low readiness suggests that prudent organizations should: (1) reassess their assumption about the likelihood of crisis occurring, and (2) move to increase their readiness for crisis. The dimensions of crisis readiness proposed in this study can provide a COLUMBIA JOURNAL OF WORLD BUSINESS useful framework for accomplishing these objectives. The first step is diagnosing the particular weak points. According to the study's results, while quick response ability, resource access, crisis planning, and media management ability are generally adequate, managers did perceive substantial room for improvement in these areas. Furthermore, this study revealed that organizational communication processes are clear candidates for increased attention in most firms. The manager respondents reported on average that they were not wellinformed about their organization's crisis management repertoires. Qrganizations may be restricting crisis management information to all but a select few managers, a policy which has the advantage of confidentiality but the disadvantages of reduced information fiow and fewer contributing decision makers. The next step is to determine how organizational characteristics, such as the firm's strategy, structure, culture, and leadership, may be contributing to the specific suboptimal crisis readiness dimensions. For example, a slow crisis response ability may be a function of a highly bureaucratic organization which delays the crisis decision- making process through rigid proce- larger firms by allocating resources dures and red tape. Step three involves and people to environmental scanning modifying the organization's activities and boundary spanning activities, thus so as to improve its crisis readiness speeding response time to external along the focal dimensions. For ex- events. Organizations who have never ample, an internally-focused, produc- experienced crisis can learn about tion-driven organization may be able crisis readiness techniques by carefully to strengthen its strategic crisis plan- examining the organizational systems, ning process through adopting a long- procedures, attributes and behaviors term organizational strategy which of competitors who have undergone focuses on external contingencies, a crisis. such as industry changes and techThe issue of strategic crisis mannological shifts, as well as internal agement warrants such future study, issues of efficient production. and the field is open for research at This project's findings about the multiple levels, from managers' perrelationship of size and past history ceptions of their organizations' crisis with present crisis readiness also im- management repertoires to organizaply some tentative suggestions for or- tions' tactics in responding to crisis ganizations trying to improve their situations. Given the increasing frereadiness for crisis. The managers quency of high-magnitude organizasurveyed in this study reported in- tional crises, perhaps the first step is creasing size and past experience with to challenge our existing assumptions crisis as positively associated with about an organization's susceptibility present crisis readiness. While these to crisis in today's complex environattributes may not be manipulable ment. According to Mitroff and organizational characteristics, organi- ICilmann, "The phenomenon of corzations may nevertheless be able to porate strategies forces us to acknowlselect some relevant aspects of large edge that our earlier images of the size and past history and incorporate corporation and its relationship to the them into their current crisis prepara- surrounding world are no longer suftion activities. 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San Francisco: Jossey-Bass Publishers, 1985. Weick, K.E., "Management of Organizational Change Among Loosely Coupled Elements," in P.S. Goodman and Assoc. (Eds.), Change in Organizations. San Francisco: JosseyBass Publishers, 1984. Perrow, C. Normal Accidents: Living with High Risk Technologies. New York: Basic Books, Inc., 1984. Williamson, O.E., Markets and Hierarchies. New York: The Free Press, 1975. COLUMBIA JOURNAL OF WORLD BUSINESS Special Report: Crisis Management & the Media Crisis Management & the Media If you find yourself with hours, or even minutes, before a crisis occurs there is still time to train. --Joe Hodas, executive VP of channels, and partner, Vladimir Jones © 2012 by Access Intelligence, LLC. Federal copyright law prohibits unauthorized reproduction by any means and imposes fines of up to $100,000 for violations. 2 Play The Role of The Tough Reporter in Your Crisis War Room By Joe Hodas E xecutives don’t want to think about crises before they’re in one, and they certainly don’t see the point of spending money and time on a crisis that hasn’t yet occurred. Too often, they think that if a crisis does arise, they can wing it. As a professional winger, I can safely say that nothing can prepare you for cameras, lights and questions as you try and explain loss of life, loss of shareholder value or other crisis scenarios with limited information, muffed by a veil of chaos and fear. Nothing. Create a simple plan. If you fnd yourself with hours, or even minutes, before a crisis occurs, there is still time to train. Better yet, you can actually kill two birds with one stone because you will also have to craft messaging for your various responses and communications. There’s no better way to test your messaging than to run it through a real-time, iterative process grounded in media training. If it doesn’t sound good the frst time it rolls off the lips of your CEO, odds are likely that it’s not the right message. Below are eight steps/considerations for media training in a storm that should help you prepare for, though maybe not conquer, whatever crisis you face: 1. Find a dedicated war room immediately. If it has presentation capabilities, that’s great. But mostly it just has to be a room large enough to hold a crowd and convenient enough for all to access. 2. Identify your team. Keep it managable. In a crisis, when time is of the essence, less is If you find yourself with hours, or even minutes, before a crisis occurs, there is still time to train. r r r r r r 3. r more. Otherwise you’ll never get to consensus on the messaging and you won’t get to run through any of it for practice. I recommend some combination of at least the following representation: Legal counsel: Just to be safe. CEO/president: If at all possible, and depending upon the nature of the crisis, this should also be your spokesperson. Subject matter expert: This will vary depending on the crisis. PR counsel: That’s you. Note taker/researcher: If you are going to act as the PR counsel, it’s benefcial to have someone there to capture words, expressions, facts etc., so you can focus on driving the discussion. CFO: Why the CFO? CFOs tend to have a very analytical mind and they often know the risks associated with certain messaging and have a good sense for any insurance or third-party vendors that should be involved. Development of messaging. Ideally, you have spent about two hours developing two columns: Facts: These are the elements you know to be true about the situation. 3 Don't Panic: Use This Checklist for Containing a Crisis Situation For organizations mired in a crisis, having a plan, swift stakeholder communications and active reputation management are crucial to help mitigate controversy. David Kalson, CEO of Ricochet PR and 20-year crisismanagement veteran, recommends an organization use this checklist to work through a bad situation: ❏ Draft a team. Assemble a crisis response team with the CEO as the ultimate decision maker and choose your spokesperson(s). Ensure that operations and communications are closely coordinated by including both operational managers as well as communications managers on the team. Also include legal experts and subject-matter experts, e.g., if the crisis is an IT security breach, the head of IT must be on the team. ❏ Categorize the seriousness. How many people are victims, real or perceived? Is the media covering it? Which media? Some are more influential, hence consequential than others. Can the crisis be contained at a local facility or does it impugn the entire corporation, nationally or globally? ❏ “Tell it first and tell it fast” to audiences r Messages: These are the words that you’ll use to communicate the facts. What you really want to get to, for the purpose of media training at least, is a series of three to fve (three is ideal) broad messages that cover only the most essential points of the situation. Each of those can be supported by three messages/facts. If you go any deeper than that, it’s easy for your spokesperson to get confused, share too much or the wrong information. One of the downsides to media training during a crisis is that as you go through the messaging process, it’s easy to forget what was merely part of the “discussion” versus an actual key message. 4. Now that you have your messaging, it’s time to try it out in front of an audience. If you have the time and technical capabilities, it’s 4 ❏ ❏ ❏ ❏ affected by the crisis. Make your organization the authoritative informational resource on the crisis, or else someone else will take that role from you. Tactics could include an apology to victims, Web site content, op-eds, remuneration to victims, ads, regulatory filings, legal actions, etc. Focus Internally. Make your employees a primary audience so they are equipped to carry your crisis-related messages to customers and into the community while they maintain their productivity and morale. Break out the influencers. Whenever possible, use respected third-party experts to tell your story during a crisis. Be media savvy. Use media/presentation training during a crisis and rehearse before going before the media or groups. Rule No. 1. Empathize (be human) to victims, real or perceived. They don’t care how much you know until they know how much you care. — PR News Editors best to capture the training on video. This way, you can play back the critique via video, rather than interrupting it in real time. Also, the video will help you see exactly how your spokesperson might come across on camera, which can be much different than seeing him or her in person. 5. Opening Statement. Start your training with your spokesperson making an “opening statement” to set the stage/tone for questions. 6. This is the fun part; you get to be the nasty reporter. Really grill your spokesperson and switch up the style. Try to use as many tricks of the trade as you can, such as: r Silence: So often, when a reporter lets the silence sit for a few seconds, the interview subject will try to fll the silence with words— sometimes words that should never have left © PR News his or her mouth. r Interruptions: Don’t let your spokesperson fnish his or her sentence. See how many times you can do that before they get fustered. r False or misleading info: Feel free to throw out a question or some information your spokesperson has never heard or considered. See if he or she can bring it back to the key messages. r Confrontation: Ask your spokesperson something that borders on personal/ emotional and see if he/she can come across as sympathetic, but not necessarily as the bad guy. 7. Analyze, analyze, analyze. Which messages worked, which didn’t? Which facts did your spokesperson get wrong? Did he/she lean too much to one side of the camera? Was the spokesperson able to convey sincerity and integrity? Did he/she fall for any reporter tricks? 8. Finalize the messaging document and make sure everyone who needs it has a copy. And go ahead and use that messaging to begin drafting that frst release/statement to post to your Web site, Facebook, Twitter, the company blog and the wires. In all, this exercise requires at least three hours. The media training itself, however, shouldn’t go on for more than two hours. You don’t want your spokesperson to get run down before the crisis even hits. Also, make sure everyone in the room agrees to a specifc time frame to declaring a situation a crisis or not. If it’s decided that the situation is not a crisis, then you’ve still come up with a wonderful way to get your spokesperson invested in media training. PRN Joe Hodas is the EVP of channels for Vladimir Jones, and is a partner in the agency. He has more than 17 years of experience in consumer branding. 5 Doing It Right: Message Mapping, Construction and Framing By Cindy Rakowitz I n today’s world, where news spreads like wildfre through digital platforms, it has become mandatory for individuals and organizations to develop a clear, unifed message for times of crisis. We no longer enjoy the luxury of a 24-hour news deadline; the media and members of the public now demand an immediate response to a crisis situation. Immediacy, simplicity, honesty, responsibility and repetition drive a powerful message home. Doing It Right After a U.S. “Mad Cow” disease scare, authorities on the condition issued a report through the traditional press and social media platforms. The report stated that: r This was an isolated incident. r Tainted meat and dairy never became a part of the food supply. r It is safe to eat beef and drink milk. Through an immediate internal investigation and response, there was never the need for spin control. Written with authority, the report prevented uncertainty and potential panic. Ultimately, the response to this contained incident reinforced consumer trust in our food inspection and distribution system. Effective crisis public relations— quenching rumors, correcting misinformation and refuting lies— can save lives, reputations, reduce damage and disruption and expedite rescue and recovery. When an organization devises a comprehensive crisis-management plan, the communications 6 Delay, default and denial are weapons the public and media will wield against you. section should focus on message development. This should include these items: 1. Designated spokesperson. It is best to use a single individual to represent the company, respond to media questions and release statements. In addition to the spokesperson, designate technical experts to provide supplemental information and support to the spokesperson. The designated spokesperson should also collaborate with outside agencies to ensure consistent messages. 2. Mission statement. A mission statement defnes the company’s reason for existence, guiding the actions of the organization. It provides the framework for all business strategies and decisions, including crisis response. 3. Positioning. This is where a company needs to empathize with how the public perceives the crisis. If responsible, apologizing immediately wins sympathy and allies. Crisis-response messaging should be planned for these situations: r Unauthorized procedures, r Misuse of confdential information, r Errors in judgment and honest mistakes, r Attacks from hostile competition. © PR News 4. Media procedure. The PR director’s strong relationships with the media will help in the midst of a crisis. The PR staff should know how to handle the barrage of inquiries via telephone and social media. In today’s digital environment, the best source for updates and new information can be an organization’s Web site. In the event of a physical disaster, an off-site media center should be predetermined. All spokespeople should be media trained. 5. Prepared statements. Statements and news releases include the answers to who, what, where and when in response to a crisis. Demonstrating immediate concern along with an action plan will have a positive impact on public opinion. 6. Message mapping. It is imperative to anticipate every possible question in order to construct the best answers. This reinforces the public’s confdence and trust. For example, in the event of a railroad train collision, prepare to answer the following: r Cause of the crash and location, r Number killed or injured, r Number of survivors, r Nature of injuries suffered, r Care given to injured and where they are located, r Rescues in progress, blocked escapes, r Evacuations, shelter, relocation, r Testimony of participants, r Testimony of witnesses, r Responders from other agencies, r The number of rescuers and where they came from, r Prominent members of the response team, r Special equipment used, r Delays or interference with the rescue, r Property saved or lost, r Acts of heroism, r Only releasing the identity of victims to frst of kin—not the mass media. 7. Key audiences. Prepare a list of constituents and tailor statements to address specifc stakeholders, such as: r Local, national, global, digital and vertical media, r Employees, r Shareholders, analysts, bankers, stockbrokers and investors, r Customers, r Community organizations, r Distributors, wholesalers, retailers and consumers, r Suppliers, trade associations, strategic alliances and licensees, r Legislative, regulatory, judicial and government, r Special audiences, including the physically challenged, minorities, senior citizens and religious groups. It is important to note that “no comment” is never the right answer. In the face of uncertainty, admit that you lack answers and explain what actions you have underway to fnd out more information. Most professional news reporters appreciate the fact that you will work with them as you gather pertinent information. There are also situations where you may have to say, “Due to litigation, we are not at liberty to discuss the situation.” These words are substantially different from “no comment” or, even worse, avoiding the media. If at fault, deal with the situation immediately and take responsibility for your part. Delay, default and denial are weapons the public and media will wield against you. Being honorable and responsible does not automatically place you at a disadvantage with your audience. It means apologizing and making things right. Thoughtful advice from legal counsel and communications staff can go a long way. Constituents will use multiple methods to double- or triple-check your message and your responses to their questions. Formulate your responses through considering: r This is what we know, r This is what we do not know, r This is what is uncertain. 7 Framing, Bridging And Transitioning Crises, disasters and emergencies have tremendous emotional impact. The way you frame a message can either reassure or elevate concern. If announcing a warning message about a food, it is reassuring to hear, “Water is approaching the food stage, but the levies are holding, which will prevent considerable damage.” This brief notifcation addresses the warning, framed with an optimistic update. Many audiences have no fxed opinion about an organization or public fgure until a crisis occurs. The way the message is framed (by responders and crisis communicators) plays a signifcant role in winning people over or alienating them. Once an audience forms its opinion, it is diffcult to alter. Framing infuences people who have not yet made up their minds. Properly framed written and verbal statements have to be balanced, honest, relevant, timely, reliable and accurate. Framing can present bad news with compassion. Consider two different presentations with very different framing. Which of these medically equivalent MDs would you choose based on message framing? r Oncologist Dr. Davis, a gruff and experienced MD, enters the patient's room and says, “The kind of cancer you have is inoperable (Frame 1). Radiation will be ineffective (Frame 2). Traditional chemo is useless (Frame 3). Experimental treatments have a 45% chance of failing (Frame 4). What do you want to do?” Now consider this: r Oncologist Dr. Roberts bounces in and says, “Hello, how are you feeling this morning? I studied your chart carefully and we are going to attack this. The FDA has given us permission to run human trials on a new drug. The results are encouraging. About 55% of the patients treated with this drug experienced a four-month remission and 35% a six-month remission (Frame 1). Dr. Johnson was correct in his assessment that traditional treatment will not work (Frame 2). 8 But breakthroughs come each day and we can manage your pain while you have time with your family (Frame 3). Let’s move forward as a team and do our best to beat this thing.” Framing messages for TV news is essential, especially in response to a negative situation. One Friday night at a large Playboy media event, Hugh Hefner was seen smooching with young, attractive blondes. At that time he had not yet announced his separation from his wife. A master of framing messages, Hefner understood the urgency to announce his legal separation publicly before the news of the make-out sessions went public. For media interviews, frame a message properly through the “bridge” and “transition” techniques. As demonstrated in this situation, transitional phrases connect the answer to the interviewer’s question: Bloomberg Television reporter: How do you explain your company’s dwindling sales for three consecutive quarters since your appointment as CEO?” CEO: “I agree with you, Linda, that our company’s fnancials have been disappointing [non-defensive connect] and publicly traded companies face the challenge of reporting quarter by quarter, which doesn’t refect longer-term planning [bridge to the positive message]. We have hired a new management team and have made signifcant operational cutbacks. This will have a positive impact on performance.”” The tips shared in this article should help with simple pre-planning for a crisis situation. People have a tendency to think that they—or their businesses—are bulletproof. Companies ranging in size from a sole roprietorship to a large corporation should acknowledge risk and accept responsibility for safety, security, corporate sustainability, image and credib ility. PRN Cindy Rakowitz is the CEO of Blackman Rakowitz Public Relations. She has more than 25 years of experience in marketing, communications and public relations and was previously a division president for Playboy Enterprises. © PR News Crisis Tale: Under Intense Fire, Communicator Puts Out PR Blaze By PR News Editors I t is a typical 9 a.m. (Atlantic Standard Time) workday morning on Oct. 19, 2011 at Canaport LNG, a state-of-the-art liquefed natural gas receiving and regasifcation terminal in Saint John, New Brunswick, Canada. Typical until management is alerted to a fre at a petroleum company that borders Canaport’s property. As the frst liquifed natural gas terminal of its kind in Canada, fre is not Canaport’s friend. Hearing the news from Canaport’s incident manager, Kate Shannon, the company’s media relations director, moves to the Emergency Operations Center—one of Canaport’s large conference rooms. In the room are Canaport’s management team, including Fraser Forsythe, director of operations and incident manager during crises. It will be critical that Shannon and Forsythe work together for a successful conclusion to the crisis. “I have to coordinate operations and make the calls to emergency services, but it’s important to integrate those actions with communications,” says Forsythe. 9:30 a.m.: After soaking up as much information as possible within the emergency operations center, Shannon meets her goal of issuing a press release within a half hour of the frst call. Targeting the local press, partners and stakeholders (including local government offcials), the release covers the basic facts: There is a fre from a neighboring property that could threaten the Canaport facility; all emergency steps are in place, including calls to police, fre and ambulance personnel. PR during a crisis is still treated as an afterthought. On top of that, many organizations still don’t have crisis plans at all from which to draw. 9:35 a.m.: Shannon calls each of Canaport LNG’stsven familieis living in the near vicinity to give an update. 9:45 a.m.: The the fre is now spreading—getting closer to crossing into Canaport LNG’s boundaries and near its tanks and lines. Shannon starts revising the frst release to refect the update. Shannon checks with her communications response team of three, set up in one corner of the emergency operations center, which helps take calls while monitoring Twitter and Facebook chatter. 10 a.m.: A member of the local media shows up at Canaport LNG’s main gate, confronting security and insisting on access to shoot video of the fre. Shannon drives to the location, and directs the media crew to the best possible vantage point— without breaching the facility’s tight security perimeter. The updated news release goes out. 10:30 a.m.: Back at the operations center, the calls are coming fast and furious. One of them is from a neighbor. They don’t have a car, and are worried if they have to evacuate. Shannon lets them know that if that time comes, they will have transportation away from the terminal. 10:45 a.m.: A father calls, frustrated in his 9 Crisis Drills: A Three-Step Process When crisis consultancy Blue Water Partners takes corporate clients through its comprehensive—and Web-based—crisis exercise, it first tells participants what they can expect in going through the process, which includes inputs, action and outputs. Source: Blue Water Partners inability to contact his daughter, who works at the plant. Shannon works to get them connected. 11 a.m.: The fre department is now getting the upper hand on the blaze, which Shannon is happy to report in her next briefng. 11:30 a.m.: The entire Canaport team listens to a local TV news special report of the fre. The station’s information is on the mark. 12 noon: The fre is close to being completely out—all that is left is scorched earth that has come a bit too close to the Canaport facility. For Shannon, it’s been a good day. Performing under pressure and discovering strengths and weaknesses is a positive thing, she says. And, she’ll be more prepared than ever for the “real thing.” Real thing? This was actually a crisis drill, engineered via an online application created by Blue Water Partners, a company that creates and executes “corporate war games.” The application is designed to be as real as a drill can get and involve as many staff, partners and key stakeholders as needed. Burton says up to 90 people have participated in a Blue Water drill. And “war games” is apropos, considering the 10 experience of Rob Burton, Blue Water’s director of risk management and the person who creates the games. Burton has served as a crisis management consultant in Pakistan and Afghanistan, and before that was in the U.K. Special Forces, where he admits that military drills featured bullets whizzing by participants. Organizations’ crisis plans need to be tested under fre, says Burton—though not in the literal sense. “Crisis plans are living documents,” he says. “They need to be built into an organization’s system, and they must be tested regularly.” There are some challenges unique to PR when it comes to these drills, says David Kalson, CEO of Ricochet PR, which has partnered with Blue Water to handle the PR aspects of the drills. One of the biggest PR hurdles? “Just to be in the room,” says Kalson. “PR during a crisis is still treated as an afterthought.” On top of that, many organizations still don’t have crisis plans at all from which to draw. For Shannon, the drill was an improvement over one deployed a year before. Information was fowing more freely from other sources, like HR and communications, she says. And while Blue Water provides realistic “injects” that take a crisis to the next levels—including simulated TV broadcasts, social media posts, and even live “actors” breaching security fences— Shannon says it’s tough for communicators to fully realize the intensity of emergency situations. That’s why she feels strongly about PR’s involvement in the planning of crisis exercises. As for the results of Canaport’s drill, Forsythe has just received an initial report on the drill created by two outside frms. A more formal, fnal report comes later, which gets shared with government agencies. Besides making an organization more crisis-ready, Burton sees another value of these drills: “Simply bringing people within an organization together who may not have much contact otherwise is very benefcial,” he says. Now that situation is a crisis in and of itself. PRN © PR News The Media Orchestra: Interpreting The Interplay of Media Types in a Crisis By Eric Koefoot, Chris Bolster and Sam Neer I n today’s media landscape, there are many potential fashpoints from which a crisis can originate and—equally importantly—many mechanisms to facilitate its spread across media formats. Perhaps the trigger is as simple as a misinterpreted comment by your CEO that has lit up Twitter. Maybe it is a YouTube video showing misuse of your product that has gone viral and is suddenly generating thousands of views. Or maybe the crisis was slower to come to a boil, like a customer's rant in the blogosphere gradually shared across social media until a mainstream journalist picks it up and blasts it nationwide. When these events happen, your normal day quickly stretches to a 24-hour marathon. The digital media environment has permanently changed the environment in which crisis communications professionals operate. Three of the more vexing problems that have resulted from the new environment include: r Diffculty maintaining an up-to-date view of the infuencers in a particular subject area. The days of knowing the key infuencers by looking at the byline of the local or national newspaper are long gone. The key infuencers who impact the industry and the key issues that matter to you are scattered across many different media channels, and they have diverse audiences and followings that reach niche audiences that did not even exist 10 years ago. r The absence of an effective (ideally predictive) early warning system. Sharing Responding quickly and effectively during a crisis is difficult because there is no clear indication of which influencers should be targeted for engagement and advocacy. and amplifcation across social media is becoming the norm, and coverage can spread like wildfre under your radar if you are not paying attention. Unless you understand and harness these sharing tools yourself, your chances of successfully intervening are signifcantly reduced. Like a bucket brigade combating a forest fre on a windy day, you are at the mercy of powerful forces. r The unmet need for a cross-media perspective on infuence and the propagation of a story. The fow of information and opinions today is vastly more complex, so a holistic view of the media landscape is becoming critical to addressing any issue. A “siloed” approach can no longer do the job, and the crisis professional must understand and manage a complex mix of constituents and media types. Who Has The True Influence? Anyone can now make his/her voice heard. The advent of social media has considerably expanded the set of people who could become infuencers. Despite this, many companies do not yet have a consistent approach to identifying and managing infuencers across traditional, social and 11 Questions To Ask For a Quick Crisis Response During a crisis, communications teams need to assess the situation quickly in order to effectively focus efforts and resources. Many data points need to be collected, distilled and regularly updated with speed and accuracy in order to keep the team’s response focused on the right leverage points and to assess the effectiveness of the team’s intervention. Some key questions to answer when in crisis include: t How much traction is the issue getting across social media? Is it still gaining momentum, or has it peaked—and can we let it die out on its own? t Is cross-pollination among media channels contributing to the spread of the issue? Is it still contained in social media, or has it broken out into other channels? Or after starting in traditional media, has it transitioned to social media as a “cause”? t Who are the most important influencers on this issue/topic? Which of these influencers have reacted, and which have so far remained silent on the issue (and thus may still be influenced)? t What are the best channels to use to address the crisis? Can our response to this issue benefit from sharing using social media? t Is our team prepared with the right information and insights to quickly respond to the right audiences using the right channels during a crisis? — Eric Koefoot, Chris Bolster and Sam Neer broadcast media. Teams are often organized by media type, making it more diffcult to see patterns across media and to identify the most important infuencers. Responding quickly and effectively during a crisis is diffcult because there is no clear indication of which infuencers should be targeted for engagement and advocacy. 12 These days, most journalists and other infuencers are producing complimentary content across multiple media platforms. A Twitter star may have a YouTube outlet account for multimedia, while a well-known journalist may have a Twitter account or personal blog to break news or offer deeper personal opinions free of some level of editorial oversight. Digital infuencers frequently use multiple channels to share and amplify their opinions. Crisis-targeting efforts must adapt to this new world. Playing on a New Field So what is a crisis professional to do? First and foremost, infuencer tracking and analytics should be implemented across all key media channels to identify and determine who really matters to the organization. Crisis preparedness should include compiling a list of infuencers by topic in advance, so the team will be able to swiftly focus on a short list for outreach in the early stages of a crisis. Teams need to measure all infuencers using a consistent methodology. That is not to say media type shouldn’t impact the level of infuence assigned to a person, but it does mean the entire ecosystem must be considered (and various outlets properly weighed) before accurate conclusions can be drawn. Infuence within a particular feld or subject does not automatically extend to others. When planning outreach, other factors that should go into a comprehensive infuencer metric include their most discussed topics, frequency of writing, the prominence of their primary outlet(s) and the range of their coverage across media types (as well as infuence within each). Such data can provide a powerful, actionable set of targets to act on in a crisis. Social Momentum Your crisis strategy often depends on how much attention coverage is getting. Sometimes a top negative story just fzzles and fades, and you’re happy to just let it go. Then there is that really bad story that just won’t die. During a crisis, understanding and tracking conversations around © PR News the key topics is vital to narrowing your team's focus to the items that need the most attention and action. Recent advances in social media have given users the ability to quickly amplify opinions of their peers, creating a “social momentum” that can blindside the best communications teams if they have limited their focus to traditional media. If a crisis breaks for your organization, and suddenly it is all over Facebook and Twitter, people may post rants and get dozens, hundreds or even thousands of likes and shares. In the Twitter world, abrasive 140 character comments are being re-tweeted across the Web like a spreading wildfre. It is critical to recognize that it is not just social media itself that warrants attention. Often it is the interplay among postings that gives you the actionable early warning you need. Concentrating on the key infuencers in the social sphere is vital, but it is often more important to identify the specifc content catching fre. As you observe the likes, shares and retweets, drill down to fnd the infuencer(s) that started it all. This is a logical place to begin your counter-offensive. When you address the issue at the source, rather than focusing on the side-effects or collateral damage, you may be able to create a second “follow-on wave” of positive reaction based on your thoughtful response to the issue. Once the origin of the negative posting has been established, your next actions should leverage the same sharing tools that initially enabled the problem to spread. Taking advantage of the same chain of media sharing can be an effective method to touch many of the people (including infuencers) who were exposed to the original problem coverage as it spread. Your crisis team needs to be well-versed in a variety of social sharing tools and have an appropriate plan of action (and established accounts) for each one. They should practice with these tools often enough that they don’t have to learn them on the fy during a crisis. With a mediasavvy communications team, a rapid response in social media is an important frst step of a smart, well-orchestrated response to a problem, and a conciliatory and informative post or Tweet can begin to win over those with negative opinions. The proper understanding of the sharing of social media is vital to creating a smart, appropriate crisis management response using the same tools that contributed to the crisis in the frst place. The Conductor’s Toolkit In many organizations today, crisis management involves segmenting coverage by media type; traditional, social and broadcast are all separate data sources, analysis tools, and analytical approaches, and in many cases they are managed by different teams (and sometimes even different departments). Traditional (offine or online) media relations usually falls under the communications team, while with surprising frequency responsibility for social media can be shared among the communications team and the often much larger marketing and customer care groups. This approach poses a challenge to properly coordinating strategy and activities, a factor that is only compounded in a crisis. Each group identifes its own infuencers to target, and some of the same people can be active in both traditional and social media. The diffculties in coordination certainly can result in wasteful, duplicative effort. But perhaps even more concerning, they can lead to a missed understanding of what position the infuencer is taking on an issue and even which infuencers the communications team should focus its limited resources on. In order to avoid this missed opportunity to understand the reach and distribution of key infuencers, PR teams must begin to take a holistic view of the media landscape, recognizing both the power and authority of traditional media and the publishing and sharing power of social media. Studying these different media types together can build a more robust and accurate view of where teams should focus in a crisis. Any tools that teams implement should help them understand which infuencers are acting 13 in multiple media channels, what they write about, how they share coverage and how broadly they are published, shared and followed. Using sophisticated monitoring tools, teams can isolate the infuential conversations, target the right people across multiple channels and ultimately react more quickly and effectively in a crisis. Sometimes the conversations that matter can be a surprisingly small slice of the total volume of coverage—particularly in the critical period just before or after the crisis materializes. If you want to detect these problems early, be sure to look for tools that can strip out the meaningless noise and detect the fainter signals that often precede a fullblown crisis. Bringing It All Together The changes in the media landscape over the last fve years require us as crisis communications 14 professionals to adapt our tools and approaches to dealing with crises in new and innovative ways. We need to understand how issues get momentum in social media, and effectively use those same tools to address the problem. And we need to understand the interplay between media channels and use it to surgically intervene to help get the crisis under control. The many types and forms of media, like instruments, have unique characteristics to contribute, and in the hands of a well-equipped conductor they can be brought into a pleasant harmony. PRN Eric Koefoot and Chris Bolster are managing partners at PublicRelay, a PR media intelligence company. Sam Neer is marketing manager at PublicRelay, responsible for social media marketing and strategic digital product development. © PR News Six Important Tips For Message Clarity By David Hamlin G etting the media and those they inform to understand the elements of a crisis and your response to that crisis right away is easier when one simple premise is applied: The audience is composed of total strangers. Once you understand that you’re talking to strangers—people who don’t have your background or knowledge and are considering the crisis for the frst time—the vocabulary rules become obvious: 1. Junk the jargon: While attorneys and legal beat reporters know exactly what a “TRO” is, the rest of the world doesn’t. Use “temporary restraining order” instead, at least for the frst usage. Better yet, defne it in context: “Our client does not believe that there is any need to restrain sales of their products temporarily or permanently.” 2. Ax the acronyms: You may know what a NOFA is, but most folks don’t. “Notice of Funds Availability” is a perfect example of insider vocabulary. Even in cases where the acronym is reasonably familiar–EPA, ACLU, SPCA–a segment of the audience doesn’t know or has forgotten what those shorthand versions mean. Acronyms can also lead to confusion, since similarly named entities are commonplace (California Environmental Protection Agency, Hartford SPCA, Illinois ACLU). Full defnitions help the audience. 3. Illuminate: Saying “...the First Amendment will be violated...” is less effective than saying “...the First Amendment right to freedom of assembly will be violated...” The frst is ambiguous—free speech, free press or the right to petition? The second helps everyone understand the precise nature of the dispute. 4. Fill in the blanks: Don’t assume that strangers exposed to your statements share the same base of knowledge. Your clients may know to an absolute certainty that their actions were perfectly legitimate, but if you don’t say so, many will inevitably wonder why. Don’t leave room for anyone to fll in the blanks. 5. Craft carefully: A simple preposition can lead to signifcant misinformation. A “demonstration in Chicago” is not the same as a “demonstration through Chicago.” One stays put with modest disruption, and the other is a traffc snarling, logistically challenging parade. Since initial statements may well defne the issues, there is a signifcant advantage to be gained; by writing and speaking with extraordinary precision, the crisis can be defned on your terms. 6. Share and share alike: Before you release anything, make sure you have communicated with strangers effectively—share your communication with someone outside the communications team. Even under time pressure, take a moment to present your statement to a colleague who is not familiar with the crisis. Ask them to tell you what they read or heard. If the answer isn’t exactly the message you seek to communicate, fx it—spending weeks or months trying to correct misinformation or incorrect impressions is far more challenging than getting it right, right away. PRN David Hamlin is partner at Weisman Hamlin Public Relations in Los Angeles. He has worked on crisis campaigns for law frms, associations and nonprofts. 15 Blood on The Floor or Name Adored? Choose Your Spokespeople Wisely By Jane Jordan-Meier A t no time is an organization more vulnerable than when a crisis strikes. Crises are defining moments for organizations and their leaders. They are “make it or break it moments.” Rudy Giuliani became a national hero as New York mayor on September 11, 2001. President George W. Bush’s slide began when he took three days to properly respond to hurricane Katrina. Tony Hayward was sidelined not long after his now infamous “I want my life back” quote during the disastrous BP oil spill in the Gulf of Mexico. As the legendary businessman Jack Welch, former CEO and chairman of General Electric, said, “there is always ‘blood on the floor’ in a crisis and typically someone pays with his or her job.” Communicating in a crisis is not for the faint-hearted or the untrained. In a crisis, you need speed, decisiveness, authority and often significant courage. Welch says that even those who are “extraordinarily gifted” try to make the problem “disappear” by giving it to someone else to solve. Indeed, not the best strategy. The choice of spokesperson is a critical component for effective crisis management in this age of what Ian Mitroff, Professor Emeritus at the University of Southern California calls, the “super crisis.” Crises have the potential to destroy entire industries, bring down governments and adversely affect large regions of the globe. We now know that protests organized via Facebook can topple governments. And crises today are not only bigger, costlier and deadlier, but they come at us faster and faster. So who makes the best spokesperson? For many, the default is the CEO. After all, the CEO is (or should be) 16 the most prized communications asset at a company’s disposal. He or she drives corporate strategy and gives voice to performance and progress. The CEO establishes the building blocks of corporate culture and is often the public face of the company. They exemplify all that is good, bad, promising or disheartening about an organization. So when the CEO takes ownership of a crisis, and is the vehicle for the response, the reputation stakes rise dramatically. Communicating in a crisis is not for the faint-hearted or the untrained. The bottom line is this: • Is the CEO capable of connecting with stakeholders in a compelling, compassionate manner? It is a matter of credibility. As Martin Newman said in his report, ‘Shaken not Stirred’, for The Company Agency (London, 2008), “People are much quicker at spotting inconsistencies when times are tough. CEOs should never underestimate that every twitch of their facial expression is interpreted. When people are looking at leaders, they are constantly trying to interpret them in ways that are often subliminal.” It would be unthinkable that the president or CEO wouldn’t speak nor be present when an event is as devastating as the Fort Hood shootings or Joplin tornadoes, or when there are serious questions about national security, or the safety of employees and consumers. Alan Joyce, CEO of Australia’s iconic national airline, © PR News Qantas, was quick to defend its safety and reputation during its Airbus troubles in 2010. Notably, Rolls Royce, the makers of the engine that blew apart on a Qantas A380 Airbus, said very little. Often, the presence of the CEO conveys that the situation is serious enough to impact the company’s future. In this light, the CEO can fuel the bushfire rather than dampen the flames. Think of Tony Hayward’s performance during the disastrous oil spill in the Gulf of Mexico. Questions When Determining Crisis Communication Spokespeople Rushing the CEO to the front lines is easy. But my advice is to think very carefully about the issues at hand and the long-term implications when and if the CEO is put out front. As a basic rule, go for the person that is most credible, most believable, most authentic and has the genuine interest of the affected community at heart. Will they pass “the grace under fire” question? Are they believable in that first nanosecond? Research shows that it takes just a staggering 115 milliseconds for us to make a judgment based on body language. “Phony expressions usually do not fool us,” says Professor Beatrice de Gelder, a cognitive neuroscientist at Tilburg University in the Netherlands and Harvard Medical School. Generally, the best spokesperson is local, accountable and likeable (read likeable as respected and perceived to be competent). Recent research shows that, to be trusted in a crisis, stakeholders have to perceive an organization and/or leader as having a high degree of competency. Strong actions, demonstrating empathy and compassion will earn respect. Actions speak louder than words—especially in a crisis. However, if your crisis is truly a show-stopping event and the company’s reputation is clearly on the line (e.g., there have been multiple deaths, the scale of the crisis is huge), then it’s imperative that the head of the organization is quickly on the scene, getting their hands dirty and talking with the affected people. They may know less, but their physical presence sends two powerful messages: “I care and I am accountable.” Selecting a Crisis Spokesperson Core leadership values in recent years have focused on moving away from command and control to principles grounded in persuasion, enablement and empowerment. Here are the guiding principles to help with selection of a crisis spokespeople. Can you tick the following boxes for your designated spokespeople? If not, then think again. Are they authentic, genuine and convincing in what they say. ❏ Keep emotions under control. ❏ Speak persuasively. ❏ Think fast and formulate clear, succinct answers. ❏ Work under intense pressure. ❏ Handle the anxiety of standing before cameras. ❏ Command a high level of respect. ❏ Talk in simple, every day, jargon-free language. ❏ Use positive, active language rather than default to negative, toxic language. ❏ Know their stuff and exude confidence. ❏ Understand the needs of the media and are media trained. ❏ Be prepared to rehearse and speak to a “script.” ❏ Are they truth tellers. Excerpt from: The Four Highly Effective Stages of Crisis Management: How to Manage the Media in the Digital Age Training and Support So should you decide you need the CEO there because the scale and the potential damage to reputation are just too big, then make sure that he/she is very well trained and prepared. It should be obvious, but please never, ever let the CEO out without serious, professional and regular training and coaching. At media conferences: • Back up the CEO with relevant operational managers who can supply the more concrete details of the crisis—the boat captains, the engineers, the factory supervisors, etc. • The CEO is there to say they’re accountable, they 17 take responsibility to make sure that everything will be done to fix the problem and, above all, to provide empathy and demonstrate genuine concern, particularly at the beginning of a crisis. • It is the role of the front-line management, not the CEO, to provide the finer details of the recovery and response. They can speak to the technical and operational aspects better than most CEOs can. Since engagement is created by mid-level employees with serious knowledge of products and less perceived bias to exaggeration, test, test and retest your spokespeople. Train like your very life depended on it—it might. Scenario-based crisis training is critical. It will bring bad or weak elements to light. Cross-train 18 for multiple roles so that you have maximum flexibility in a crisis and, more importantly, a deeper coverage of responsibilities. Remember the Boy Scout’s motto, “be prepared.” Know your values, know the end game and, most of all, know how your key spokespeople will act. Remember, they will default to type and you will want to test that “default” mechanism before the crisis hits. PRN Jane Jordan-Meier is principal of Jane Jordan & Associates, a boutique training, coaching and advisory firm. She is a communication and media coach with more t...

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