How Not to Handle a Crisis

News International has been the news for several days now.  ABC News says that they are an example of How not to Handle a Phone Hacking Crisis.  It seems that nearly every year hands us another example of how a company should NOT handle a crisis.  The ideas of how TO handle one are pretty simple:

  1. Get all the news out.  Don’t withhold.  The constant drip, drip of additional revelations makes many people skeptical about whether they ever hear the whole story.
  2. Don’t just take advice from your lawyer.  It is quite possible to be totally safe in a legal sense and totally ruined in the court of public opinion.
  3. Have a plan and practice.  Most company CEO’s that are faced with a crisis do not give the impression that they have ever given a minute of thought to what they might say in a crisis up until the very minute that they open their mouths.  They also seem to be totally surprised by the questions that they get.  There is no upside to knowing how to handle a crisis, but the downside to not knowing is a large fraction of the total net worth of the company.  If the CEO cannot be bothered to prepare, then they must assign a very senior person to be prepared to be the spokesperson in a crisis.  And also be prepared to hand over the top job to that person if there is a crisis and they handle things well.
  4. Speed of response is Key.  And once you have a crisis, every new item needs a response.  In normal times, most items will blow over.  Ignoring them is the best policy.  In a crisis, the opposite is true.  Everything, no matter how trivial or inaccurate, needs a response.  You need to target getting as much airplay as your detractors.
  5. Crisis management is not just talking.  The actions that you take need to be as clear and decisive as your words.  In many problem situations, early mitigation can be much more effective than a late mitigation, and less costly, and less troublesome to talk about.  Imagine someone trying to make a big deal of a problem that you have already solved.  Being ready to fix lots of things is not cheap, however.  But imagine how much money BP would have saved if ANYONE would have had the equipment right there in the Gulf that was needed to fix that leak.

What in the end it takes is to focus some time and attention and money to being prepared for your worst nightmare.

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Explore posts in the same categories: Black Swan, Emerging Risks, Enterprise Risk Management, Reputation Risk

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