WHAT a few weeks we’ve had in Northern Ireland with the aeonian political party rollercoaster attempting to secure a deal to restore a functioning Assembly. We’ve been here before of course, with the same negative outcome.
In business you don’t often get the chance to make the same mistake twice. You learn, you get your systems into place, you re-build and you make sure it doesn’t happen again. Integral to those mistakes for any organisation is how it manages that process and the fall-out from it, especially if it is public facing. And this is something the talks process has not managed at all.
Be it the political or the business arena, there’s a lot that can be taken from author Peter Drucker’s quote: ‘management is doing things right, leadership is doing the right things’.
The art of building and maintaining reputation and dealing with issues and crisis management, requires a combination of these skills. This requirement has never been more challenging than it is today, and of course, the world of digital and social media has been the seismic shift that has put businesses more visibly under the microscope, in real time.
In a recent survey undertaken by PwC, 65 per cent of CEOs said they’d experienced at least one crisis in the past three years. Over half had gone through two or more during that time and almost 20 per cent say they had faced five or more crises in the last three years.
The most pertinent insight from these findings is that managing frequent crises is becoming the new normal for businesses of all sizes. Increasingly it is less ‘if something hits’, more a matter of ‘when’. Businesses, government officials, universities and media outlets all make mistakes but whether they experience a public relations issue or a major crisis often depends on how they respond. In short, how they react dictates the impact on the brand and any fall out from customers, business partners or wider stakeholders.
A crisis by its very nature isn’t isolated and contained. It builds and unfolds in multiple peaks and troughs with resultant effects which can be long lasting. Some crises are anticipated, others unlikely, and some are simply impossible to foresee. The most recent high-profile scandal involving Oxfam is a relevant example and demonstrates just how vulnerable organisations are, no matter what service they provide or the sector they operate in.
It, along with other high-profile cases including Hillsborough, the Catholic Church, Volkswagen and United Airlines underline the rapid nature of a crisis and the detrimental impact it can have when not properly handled.
The learning that businesses must take from Oxfam is that due to their initial inept response, the issue had not been properly dealt with originally. The story first broke in 2011 when six Oxfam staff members in Haiti were sacked after being found guilty of sexual misconduct. Had the charity not suppressed the story at the time they would have better protected its reputation in the long term and may have gained credit for acting quickly.
During such a crisis as we have seen time and time again, staying quiet and burying the corporate head in the sand will lead to poor decisions. It’s always better to face up to a bad news story quickly, apologise if you got it wrong and at least get perspective and messages included when the story breaks, rather than risk an investigation and retrospective exposé as per Oxfam.
The rules have changed, and search engines have very long memories. Any high-profile organisation that expresses an opinion or has a position on a specific issue should have already considered and addressed any skeletons in the cupboard that may retrospectively embarrass it, hold it to account or accuse them of hypocrisy.
Rapid, real-time and pervasive communication has substantially increased concerns over the speed at which a crisis can escalate. In the digital and social age, news is instant with reputations changing locally, nationally and internationally at the press of a button.
Indeed, social media can accelerate and even directly cause, a crisis. Last month outrage from Apple customers online prompted four US House Republicans, including the chairman of the Energy and Commerce Committee, to write to Apple chief executive Tim Cook asking him to answer questions about its disclosure that it slowed older iPhones with flagging batteries. Social networks very rapidly spread these complaints and concerns, impacting the brand and its product.
The key to managing any crisis is to swiftly get a full understanding of the situation ranking the issue by the traffic light assessment in terms of potential impact. You have to quickly address it, acknowledge it and act. Every situation is different, but that’s why it’s so important to always be prepared with assimilated scenario planning having been conducted, crisis management plan and spokesperson in place. Then, if and when needed, it’s a matter of executing the plan instead of scrambling around trying to figure out what to do. Equally important is the post crisis strategy where lessons can be learnt from both crisis prevention and a crisis management perspective.
All companies can develop effective and scalable strategies to cope when things go wrong and emerge stronger from the experience. The most effective crisis management is not reactive, it’s proactive.
By planning ahead, defining purpose and the values they want to protect (and being aware of potential risks and reputational weaknesses), companies can ensure that they have the best information, the most efficient processes and the best people in place to support them. As Benjamin Franklin said: ‘failing to prepare is preparing to fail’.
Whilst social media presents a threat to companies that are not prepared to respond effectively, for those that are, those same platforms can be a formidable mechanism to communicate with customers, stakeholders and wider communities.
In 2012 HSBC’s ATM machines stopped working, leaving its customer base struggling to access their money. The company quickly adopted a posture of complete transparency immediately taking to Twitter to explain the situation.
They had their most senior members release statements and teamed up with journalists to get the message out. The company didn’t just try and handle the situation, they utilised social platforms to lead the situation, and as a result they received very few customer complaints and praise for their communication teams.
By being prepared to deal with a crisis which unfolds under the speed, interconnectedness and sheer unpredictability of the modern world, a company can emerge stronger in the eyes of shareholders, employees, the media and of course customers.
Gaps in crisis preparedness have destroyed value in many businesses and organisations. Those who survive a crisis are not the lucky ones - they are the organisations that live up to the Franklin legacy.
:: Claire Aiken is managing director of public relations and public affairs company Aiken.
:: Next week: Richard Ramsey
