What is Crisis?
The word Crisis is traced back to a Greek word Krisis which means a decision or to decide. Crisis can be of two types. First kind is a natural disaster like earthquakes, hurricane, etc. The second kind is a type which occurs due to human error, negligence or malicious intent. There are some cases of crisis which occurs due to the fault of the company, like negligence and other types include cases in which the companies become victims like information thefts.
Paul A. Argenti defines the term crisis in his book ‘corporate communication’, as –
“A Crisis is a major catastrophe that may occur either naturally or as a result of human error, intervention or even malicious intent. It can include tangible devastation, such as the destruction of lives or assets, or intangible devastation, such as the loss of an organization’s credibility or other reputational damage. The latter outcomes may be the result of management’s response to tangible devastation or the result of human error.”
The characteristics of a crisis include:
The element of surprise – such as Pepsi learning of reports of a syringe in a Diet Pepsi can
Insufficient information – The company does not have all the facts right away but very quickly finds itself in a position of having to do a lot of explaining
The quick pace of events – Things escalate very rapidly
Intense scrutiny – Executives are often unprepared for the media spotlight which is instantaneous, as answers and results normally take time
Attention shifts from the business as a whole to the crisis alone, forcing all the decision making into the shortest time frame.
Crisis from the past 25 years
Since last 25 years, there have been defining crisis in the history of the world like the assassination of President John F. Kennedy, explosion of the space shuttle Challenger, the terror attacks of September 11, the cable car detaching over the French Alps in 1999, crashing of American airlines flight 587 – such events make us realize how vulnerable we all are and how quickly events can make innocent victims out of ordinary people.
Let us take a look at some of the major events which led to crisis
1982: Johnson and Johnson Tylenol Recall
In early October of 1982, seven people died after taking Tylenol capsules that had been laced with cyanide. Within days of the first report of these poisonings, sales had dropped by close to 90 percent. Johnson and Johnson reacted proactively to what was happening. Instead, it took the offensive and removed the potentially deadly products from shelves. Second, it leveraged the goodwill it had built up over the years with all the constituencies and decided to try to save the brand rather than come out with a new identity for the product. It reacted in a caring and humane way, rather than by simply looking at the incident from a purely legal or financial perspective. The company handled the crisis in an amazing manner.
1993: Pepsi-cola’s syringe Crisis
In June 1993, a man in Washington reported that after drinking half a can of Diet Pepsi the night before, he had discovered a syringe in the can the following morning. This was the beginning of a major crisis for Pepsi-cola. The CEO of PepsiCo did not let the surprise overwhelm him when he heard the news. He first engaged Pepsi-cola’s four person crisis management team to deal with the unfolding situation and then decided to supply the media with a visual response. They invited the reporters to show how it would be virtually impossible to insert a syringe into the cans. Additionally, Pepsi later distributed a grocery store surveillance tape of a woman stealthily dropping a syringe into her Pepsi can. After this, the crisis was solved.
How to prepare for the Crisis
First of all, any company should understand that it can find itself involved any kind of crisis no mater what. The following steps should be taken to prepare for the crisis.
Assess the risk, the organization is in
Plan for the crisis
Determine the effect of crisis on the constituencies
Set the communication objectives for potential crisis
Analyze the communication channel choice
Assign a different team to each crisis
Plan for centralization
What should be included in a formal Crisis plan?
A list of whom to notify in an emergency
An approach to media relations
A strategy for notifying employees
A location to serve as crisis headquarters
A description of the plan
Communicating during the crisis
Every crisis is different which means that managers must adapt various methods to meet their needs, but crisis have enough common elements for this prescription to be a starting point for all crisis management.
Step 1: Get control of the situation
This involves defining the real problem with the use of reliable information and then setting measurable communication objectives for handling it.
Step 2: Gather as much information as possible
The communicators must manage information coming from various sources. They should try to find out what is going on. A company can face harsh treatment if its constituencies think that management is deliberately obstructing the flow of information
Step 3: Set up a centralized crisis management centre
When the managers are getting in touch with the right people and gather information, they should make arrangements for creating a crisis centre which will serve as the platform for all communications during the crisis.
Step 4: Communicate early and often
The organization’s spokesperson should communicate with the concerned constituency as soon as possible. Particularly, if the crisis involves threat to lives and property, the communication should be carefully made. Above all, the company should avoid silence and delayed responses.
Step 5: Understand the media’s mission in the crisis:
The environment in which media works is extremely competitive which is why they want to get the story first. Therefore, it is important to understand the media’s mission.
Step 6: Communicate directly with the affected constituents
The organizations should communicate with the employees, sales staff, organized leadership, etc as these will be the media’s best sources of information in the crisis.
Step 7: Remember that business must continue
To those who are directly or indirectly affected by the crisis, this would be the most important thing. They should also remember that the business must go on. In addition to finding a suitable replacement ahead of time, for those who are on crisis team, managers must try to anticipate the effects of the crisis on the business and take actions accordingly.
Step 8: Make plans to avoid another crisis immediately
The crisis communication executives should work with other managers to ensure that the organization will be even better prepared the next time if it faces with a crisis and also should make sure that they avoid another crisis immediately.
When Coca-cola faced a crisis that its bottles contain pesticides, it gave many advertisements in the television and newspapers with celebrities ensuring that the coke is safe to drink which impacted the thoughts of many people. This shows how coca-cola managed the crisis.
Corporate communication, Paul A Argenti, The Tuck school of business, Dartmount College.