CRISIS 'PR' MANAGEMENT

"Success does not happen overnight but failure does."

Among other functions, public relations is a fundamental process to mitigating harm, responding to stakeholder needs and repairing image following an organisational crisis. Crisis Management is vital component of (and perhaps the second half to positive) public relations. Responding to a crisis is an important part of public relations professional's job duties.

Before delving deep into this domain of 'crisis management' let us try and define 'crisis'.A crisis is a major, unpredictable event that threatens to harm an organisation and its stakeholders. While I do not propose a formal definition of the word crisis in this blog, I intend to treat any event that can, within a short period of time, harm an institution's constituents, its facilities, its finances or its reputation as a crisis.

Crisis events are unpredictable but not unexpected. It affects all segments of society. Three basic elements in a crisis can be summed up as follows :

1. Threat to company/organisation.
2. Element of surprise
3. Short-decision time

The various types of Crises can be listed as:

• Economic
• Physical
• Personnel
• Criminal
• Information
• Reputation-al
• Natural disasters

Crisis management is the new buzz word for the society, firm, businesses, etc. Everyone from celebrities, politicians, auto-mobile companies to theme parks in dire need to salvage their reputation from getting tarnished online. No organisation / person / firm / business wants to be in a situation that would earn them a bad name, image or reputation.

Crisis management is the art of making decisions to head off or mitigate the effects of such an event, often while the event itself is unfolding. This often means making decisions about your institution’s (organisation, firm, client,etc) future while you are under stress and while you lack key pieces of information. It is the systematic attempt to avoid organisational crisis or to manage those crisis events that do occur. It involves skills and techniques required to assess, understand and cope with any serious situation from the very moment it occurs to the point the recovery

procedure starts.

PROCESS OF CRISIS MANAGEMENT: FINK's MODEL

In 1986, Steven Fink was amongst the first to examine crisis occurring in stages. According to his model, a crisis consists of four stages:

1. PRODROMAL (PRE-CRISIS): This is the warning stage. If this stage is not recognized or does not actually occur, the second stage (acute crisis) can rush in, requiring damage control. Clues in the prodromal stage must be carefully observed.
2. ACUTE CRISIS: In this stage, the damage has been done. The point here is to control as much of the damage as possible. This is often the shortest of the stages.
3. CHRONIC CRISIS: This is the clean-up phase. It is a period of recovery, self-analysis, self-doubt and healing. A survey of Fortune 500 CEO's reported that companies that did not have a crisis management plan stayed in this stage two and half times longer than those who had plans.
4. CRISIS RESOLUTION: This is the crisis management goal. The key question here is: What can and should an organisation's leaders do to speed up this phase and resolve a crisis once and for all?

Managing a crisis is the second thing one can ever do for a successful business or organisation. Dealing with crisis needs accurate and decisive action. Here is an interesting example to show how a rapid and precise action saved the company from getting a bad name.

' A gun manufacturing company loses a gun while on transit and before the public or the media ever comes to know about this, the company is able to find it and put it back into the inventory.'

Such should be the approach of managing a crisis. Let us, in brief, look at the various steps of handling a crisis:

1. ASSESS: Reasonable amount of time should be devoted to actually assess the whole situation. It is important, for a moment, to step backwards, gather facts, objects and develop a clear picture of the situation / crisis.
2. ENGAGE: It is important to engage all stakeholders. Trust insiders who will have the knowledge and will help in analysing the crisis or planning effectively to manage it.
3. PLAN: Once all data has been put in place, develop the best, typical plans. This helps to act quickly, confidently and effectively.
4. ACT: Be pro-active, not re-active. It's about execution.
5. COMMUNICATE: It is of utmost importance that communication should take place transparently and honestly. Consider and respect your audience.

A Crisis should follow the simple principle of :

• Be First- Get message out first to control content and accuracy
• Be Right-Say and do the right thing
• Be Credible-Be open, honest and speak with one consistent voice

The other guidelines of Crisis Management are :

1. Communicate accurately and openly about the crisis and maintain openness with stakeholders.
2. Communicate quickly to maintain a proactive response to the crisis.
3. Maintain flexibility consistent with the relative levels of uncertainty and ambiguity.
4. Closely monitor reactions in the media and from various stakeholder groups.
5. Maintain consistency of message with a credible designated spokesperson, usually the CEO.
6. Use a crisis management team to co-ordinate and assess the crisis response.
7. Engage in crisis planning to create and maintain a crisis response capability.
8. Work to establish positive stakeholder relations and corporate image prior to the crisis.

ISSUES vs CRISIS

Whenever we talk about Crises, we often tend to invade borders of Issues and Issue Management. But the fact remains that there are differences between Issues and Crises.

"An Issue Ignored Is A Crisis Invited"- Henry Kissinger

In the quest to achieve strategic objectives, an entity to ensure that it has sound issue management practices in place to meet the expectations of its stakeholders, externally and internally. The need for a strategic 'common sense' approach to managing business issues has never been more important for any entity, specially when radical changes are taking place at national and international levels.

An Issue can be defined as "an emerging or unresolved matter which can impact the business and affect reputation; or the 'gap' between what an entity and does, and what stakeholders expect it to say or do." Issue management is the process used to close that gap. Issue management involves many parts of an organisation. That is why it is unique from traditional strategic planning, or corporate governance or public relations.

CRISIS: DANGER OR OPPORTUNITY ?

In the very context of crisis management, we often end up asking ourselves whether Crisis happens for good of for bad. In other words, is Crisis a Danger or an Opportunity. In the Chinese language, the meaning of crisis is actually made up of two word signs. The first one is pronounced wei, which means danger while the second symbol which means jei, indicates opportunity. When combined together, it has the meaning of crisis. It is interesting to see how a symbol, which denotes a message of distress, combines in itself a symbol for opportunity.

WHAT TO DO WHEN IT ALL GOES WRONG?

Let us know browse through a couple of case studies that will help us to learn and know more about this subject of crisis management. While one talks about 'How Best To' handle a crisis, the other shows 'How Not To.'

JOHNSON & JOHNSON AND TYLENOL- 'HOW BEST TO' HANDLE A CRISIS

Crisis need not strike a company purely as a result of its own negligence or misadventure. Often, a situation is created which cannot be blamed on the company- but the company finds out pretty quickly that it takes a huge amount of blame if it fumbles the ball in its response. One of the classic example of how a company can get it right is that of Johnson & Johnson, and the company's response to the Tylenol poisoning.

What Happened

In 1982, Johnson & Johnson's Tylenol medication commanded 35 per cent of the US over-the-counter analgesic market-representing something like 15 per cent of the company's profits. Unfortunately, at that point one individual succeeded in lacing the drug with cyanide. Seven people died as a result and a widespread panic ensured about how widespread the contamination might be. By the end of the episode, everyone knew that Tylenol was associated with the scare. The company's market value fell by $1bn as a result.When the same situation happened in 1986, the company had learned its lessons well. It acted quickly- ordering that Tylenol should be recalled from every outlet -not just those in the state where it had been tampered with. Not only that, but the company decided the product would not be re-established on the shelves until something had been done to provide better product protection. As a result, Johnson & Johnson developed the tamper proof packaging that would make it much more difficult for a similar incident to occur in future.

Danger & Opportunity

• The cost was a high one. In addition to the impact on the company's share price when the crisis first hit, the lost production and destroyed goods as a result of the recall were considerable.
• However, the company won praise for its quick and appropriate action. Having sidestepped the position others have found themselves in- of having been slow to act in the face of consumer concern- they achieved the status of consumer champion.
• Within five months of the disaster, the company had recovered 70% of its market share for the drug-and the fact this went went on to improve over time showed that the company had succeeded in preserving the long term value of the brand.
• In fact, there is some evidence that it was rewarded by consumers who were so reassured by the steps taken that they switched from other painkillers to Tylenol.

Conclusion

The features that made Johnson & Johnson's handling of the crisis a success story can be enumerated as follows:

• They acted quickly, with complete openness about what had happened and immediately sought to remove any source of danger based on the worst case scenario- not waiting for evidence to see whether the contamination might be more widespread.
• having acted quickly, they then sought to ensure that measures were taken which would prevent as far as possible a recurrence of the problem.
• They showed themselves to be prepared to bear the short term cost in the name of consumer safety. that more than anything else established a basis for trust with their customers.

'HOW NOT TO HANDLE A CRISIS':TOYOTA

In Japan, there is a proverb, "If it stinks, put a lid on it." Alas, this seemed to have been Toyota's approach to its crisis (2009-2010), initially denying, minimizing and mitigating the problems involving brakes that don't brake and accelerators that have a mind of their own. President Akio Toyoda, grandson of the founder appeared less than forthcoming about critical safety issues, risking the trust of its customers world-wide. The following is a bulleted time-line of the major events from a public relations standpoint :

• Lexus ES350 fatal crash
• 3.8 million Toyota/Lexus floor mat recall
• 4.2 million brake override amended recall
• 2.3 million accelerator recall
• Sales halt for eight models
• Televised Congressional hearings

Toyota is synonymous with Japan so when trouble hit the world's leading auto-maker, it was easy to conclude that a cloud has fallen over the Land of the Rising Sun. Toyota's troubles started in 2008 when its global sales started shrinking due to the financial crisis that hit the US, its biggest market. It had hoped to recover its sales figures last year through cost-cutting measures.

This has been a public-relations nightmare for Toyota, as its brand name has been synonymous with quality and reliability. Crisis management does not get any more woeful than this and the cost of this bungling was- the initial $2 billion recall and the loss of 17% of share value when the gas-pedal recall was announced. For some people, it was not surprising that Toyota's response was dilatory and inept, because crisis management in Japan is grossly undeveloped. Over the past two decades there has been not one instance where a Japanese company has done a good job managing a crisis. The pattern has been the same ever- typically involving slow initial response, minimizing the problem and too little compassion and concern for consumers adversely affected by the product. The absence of a structure to quickly get accurate information to top management hampered an accurate and adequate response. that left the management unprepared to deal with media questioning and conveyed an image of stonewalling and indifference. Perhaps, there was a cultural element to this penchant for mismanaging crisis. the shame and embarrassment of owning up to product defects in a nation obsessed with craftsmanship and quality raises the bar on disclosure and assuming responsibility. The shame of producing defective cars is supposed to be other firm's problems not Toyota's and PR disaster that was in place during the crisis clearly showed how unprepared the company was for crisis management and how embarrassed it was.

Another reason why this was a poor crisis management, was the fact that Toyota did not actively p utilize social media platforms such as Facebook, Twitter or YouTube. Toyota had that opportunity to manage its own branding crisis but was not pro-active. The consequences of poor crisis management severely damaged its reputation as the number auto-mobile brand with $30.5 million brand earnings (according to Interband).

The crisis, though, offered an opportunity to reform Toyota's corporate culture and improve quality assurance by becoming more focussed on the customer, using two-way flow of information and feedback' improving corporate governance by appointing independent outside directors and making risk management more than an after-thought.

Successful crisis management requires timing, response and sincerity that Toyota unfortunately did not show.

Social Media and Crisis Management

In this digital age, crisis management, crisis management is not just about contacting news outlets or writing an apologetic press release. Today, crisis management requires swift, sweeping action on all digital fronts: social media, blogs and company websites. Digital crisis communications is a new aspect that needs to be management plan in times of crises. Social media, blogging and tweeting have proven to viable, usable communications tools with far reaching uses- some of which are still being defined or refined. One such use just now emerging is to incorporate social media resources with traditional media to communicate in a crisis. Some experts are referring it to as 'digital crisis communications.'

As with all aspects of PR, marketing and advertising the internet is changing things up, making them easier and also at the same time, more difficult. As a result, consumers/buyers are able to contribute to the PR surrounding a company through W-O-M (word-of-mouth), reviews, etc, making crisis PR more difficult for companies than ever. This particular characteristic of PR today means one important thing for companies: a crisis can grow and fast. There are things that a company can do to help prevent a crisis from growing too out of hand in the first place, though. For example, creating and maintaining relationships with consumers, so that when a crisis does arise buyers know and are perhaps advocates for a company. Companies can also try to diffuse the damage of a crisis as it is taking place. With correspondence, action and taking responsibility, a company can help to halt the spread of negative W-O-M a crisis can generate.

Toyota, during its crisis, had a great opportunity to utilize social media channels, such as Facebook and Twitter, but showed half-hearted effort. Facebook was not utilized by Toyota to reach out to its nearly 70,000 fans. The Japanese company also under-utilized its Twitter account to get the news to its 14,000 followers. They had posted a mere six tweets regarding the recall- not as much as one might expect a brand in crisis management mode.

An interesting case study in the domain of social media-crisis management and digital crisis communications is the Domino's Pizza fiasco that damaged the reputation of a 50-year old brand. let us look at the presentation below to get an in-depth picture of the crisis.

The role of PR practitioners in crisis communication, is expanding to match this broadened notion of crisis. Public relations, from this perspective, is a crisis and risk management function responsible for understanding the role of communication in crisis incubation, the development and maintenance of crisis management plans and response capacities and the contingent elements of effective post-crisis communication.

Source of Pictures: Google

Presentation: Slideshare

PR = SPIN = WAR = PROPAGANDA ?

"The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country."

(Edward Bernays, 1928)

Our first lecture session on the 'Issues in Public Relations' was on War and PR - how the two have been inseparable through time. Here we got an opportunity to view the BBC Documentary War Spin which presented a devastating account of how US and British government and military forces set out to mislead and misinform the public during their war against Iraq- aided by hundreds of compliant "embedded journalists".

Presented by BBC war correspondent John Kampfner, the documentary was subtitled Saving Private Jessica: fact or fiction? because it focused initially on how the widely circulated account of the US navy seals rescue of Private Jessica Lynch owed more to Hollywood myth making than reality.

The documentary depicted only a small part of the spin/ propaganda aspect of war. Let us now try and reflect on this old, yet new topic of War, Propaganda, PR and Spin.

The Art of War and Public Relations: Strategies for successful litigation PR

Ever wondered what is that one thing that unites political leader Napolean, political scientist Henry Kissenger, American businessman Lee Iacocca, Basketball coach Pat Riley and lawyer Gerry Spence?

"A Wise Leader Plans Success, A Good General Studies It."

If I am right, you did not. Well, to be honest, even I didn't until I was exposed to the topic of war and propaganda. The answer to my question is, they along with hundreds of American businessmen, litigators, marketers and PR professionals have studied the lesson taught in the 2,500 year old masterpiece: The Art of War. The author, general Sun Tzu, was an extraordinary philosopher and military strategist during the reign of the King of Wu in China. His compelling and detailed text on tactics, terrain, manoeuvring and the politics of war reflects the strategies that enabled the armies of Wu to handily prevail over their enemies.

It was not until the 1970's that the teachings of Sun Tzu became widely known in the United States, where it still continues to be the subject of serious study in military circles. It contains valuable lessons that are as germane today as they were more than two millenniums ago. But here, we are not talking about strategies for conquering armies- nothing quite that dramatic-but rather about applying Sun Tzu's principles in a different kind of battle, the battle between litigants. And instead of discussing about the tools of warfare Tzu understood so well-mounted soldiers, archers, foot soldiers and the like- we're talking about a powerful weapon of a different sort : Public Relations.

There have been many wars that the United States has been part of. Some were fought on the American soil, others abroad. But through it all, there has always been a need for the public's support. And what better way of getting that support than by putting information out there for the public. This, of course, is biased information that is put forth in front of the general public;just enough to get people caring and thinking about the war, but not enough to keep them fully educated on the subject.But the question that poses here is "what is the truth?"

Propaganda has been a human activity as far back as reliable recorded evidence exists. The writings of Romans like Livy are considered masterpieces of pro-Roman propaganda. The propaganda techniques were first codified and applied in a scientific manner by journalist Walter Lippman and psychologist Edward Bernays (nephew of psychoanalyst Sigmund Freud) early in the 20th century. During World War 1, Lippman and Bernays were hired by the United States president Woodrow Wilson to sway popular opinion to enter the war on the side of Britain. The way propaganda campaign of Lip-Bernays produced, within six months, intense anti-German hysteria as to permanently impress American business (and Adolf Hitler among others) with the potential of large-scale propaganda to control public opinion.

Bernays coined the terms "group mind" and "engineering consent" important concepts in practical propaganda work and public relations. The current industry of public relations is a direct outgrowth of Lippman and Bernay;s work and is still used extensively by the US Government.

Here is an educational film on the techniques of Propaganda.

Source of Pictures: Google

Source of Video: YouTube

CONTEMPORARY THEORIES & ISSUES IN PUBLIC RELATIONS

Hey,

Greetings to all !!

This blog, as the name suggests, is basically created to 'peep' into the world of Public Relations. To be more precise, it talks about, discusses and shares with you all, the various theories and issues in the field of PR which is a part of my MA in Public Relations course at the University of Westminster, London.

During the next few weeks we delve into the current issues facing the PR industry such as: government/mass media relations; news management and spin, Corporate Social Responsibility and communication ethics. It also looks at how various social and psychological theories inform the practice and professional aspirations of the public relations industry. Apart from this, we also look get a chance to study how NGO's are affecting the industry of public relations, whether or not the rise and success of New Media is challenging PR and how cultures (Organisational / National) influence communications.

So, hope you all have a good time reading this blog and my take on PR. Please feel free to opine, comment and criticise.