Causes of Organizational Crises are So Predictable

More than 70% of organizational crises are predictable because they are largely created by management’s own actions or inactions. Mismanagement is the biggest cause of crises, accounting for around 27–30% of cases where smoldering issues have erupted into full-blown crises.

A business crisis is any issue, problem, or disruption triggering negative stakeholder responses that can affect your organization’s reputation, strategic business objectives, and viability. Although reputation is a “soft” concept, marketplace realities can mean a reputation is the most important asset of an organization, especially with big brands.

There are many cases of public companies losing millions, even billions, of dollars in market value due to loss of reputation resulting from an organizational crisis. Just look at the cases of Boeing, Wells Fargo bank, Facebook, Apple, and Google as recent examples. My article, “Social media is causing reputation crises to hit twice as hard,” discusses this in more detail.

Integrated Communication
Monitoring of the operating environment is a key factor in issue management and crisis prevention.

This should involve monitoring of news coverage relevant to your organization, internal feedback from employees and key stakeholders, and social media, where you can tap into crucial conversations involving your customers, influencers, and others about your brand. If you don’t have a brand as such, your organization will at least have a public reputation to maintain.

Use of social media channels like Facebook and Twitter is a valuable way to reach your wider communities and show your desire to communicate with them directly, creating positive dialogue. By developing relationships in social media, you can learn to choose the right message, source, and timing.

The worst time to start planning for a crisis is when you’re in the middle of one. Pre-crisis planning is key to successful social media crisis mitigation. However, speed should not replace overall strategy.

How Audiences Perceive Messages in a Crisis
If your organization is hit by a crisis event, your stakeholders will immediately form a perception about the content of your messages in these ways:

1. Speed of communication. First impressions are lasting impressions. The speed with which you issue your first communication can indicate how prepared your organization was to respond to the crisis, that there is a response in hand, and the appropriate action is being taken.

If people are not aware you are responding to the crisis event, then as far as they are concerned, you are not responding. Your stakeholders will lose confidence, and your management will always be attempting to catch up to the perceptions.

2. Factual content of the message. Your audience will be listening for the facts, so you should get the facts right, repeat them consistently, and ensure all credible sources share the same facts. Preparation can help to maximize the amount of information that can be assembled and passed on.

3. Trust and credibility. There are four basic elements to establishing trust and credibility through crisis communication. People will realize if these elements are faked. All written and verbal messages during a crisis should contain these elements:

• Empathy and caring. Research shows that being perceived as empathetic and caring provides greater opportunity for the message to be accepted by the receiver. Spokespersons should acknowledge fear, pain, suffering, and uncertainty if they are genuine emotions.

• Competence and expertise. Obviously, education, position title, and organizational roles are quick ways to indicate expertise. Experience and demonstrated abilities in the current situation enhance the perception of competence.

Another important step is to have established a relationship with part or all of the audience before the crisis. If that isn’t possible, nominate a third party who has the confidence of the audience and who will express their confidence in your spokesperson and/or organization.

• Honesty and openness. Convey all the relevant information. If your spokesperson is prevented from passing on certain information, then it helps to explain why, e.g., “We are still verifying the names,” or “The police have the role of providing this information.” Keep the amount of professional jargon and euphemisms to a minimum.

• Commitment and dedication. If possible, you should state up front what the objective is in the crisis and should commit to reaching that objective. Dedication is shown by sharing in the discomforts and the sacrifices being experienced in the crisis. Dedication means management is present at the scene until the situation has been resolved.

Guidelines for Effective Crisis Communication
Communication in a crisis should follow these principles:

• Be open, accessible, and willing to respond as much as possible to those clamoring for information.

• Be truthful. Honesty is the best policy both from an ethical point of view and from a practical standpoint.

• Be compassionate, empathetic, courteous, and considerate. It’s not easy to do this under pressure.  

• Don’t over-reassure. The objective is to convey accurate, calm concern. In fact, it is better to overestimate the problem and then be able to say that the situation is better than first thought.

• Acknowledge uncertainty. Tell only what you know. Show your distress and acknowledge your audience’s distress.

• Emphasize that a process is in place to learn from the situation. Describe the process so people will be confident you will use the knowledge to prevent or minimize the chances of a similar crisis happening again.

• Give anticipatory guidance. If you are aware of future negative outcomes, let people know what to expect: “Experts won’t know the full extent of the data leak for another 24 hours at the earliest.”

• Be regretful, not defensive. Say, “We are sorry … ,” or “We feel terrible that …” when acknowledging problems or failures. It is preferable not to use “regret,” which sounds legalistic.

• Acknowledge people’s fears. People have the right to be afraid and have a right to their fears.

• Express wishes. Say, “I wish we knew more,” or “I wish our answers were more definitive.”

• Be willing to address the “what if” questions. These are the questions that everyone is thinking about, and they want expert answers. If you are not prepared to answer the “what if” questions, someone else will, and you will lose credibility and the opportunity to frame the discussion.

Prepare Messages in Advance
One of the crucial communication tasks is the preparation of holding statements in the initial stages while waiting for more definitive information to come to hand. This task can be helped immeasurably by preparing a sizeable proportion of such statements ahead of time from a standard format.

Several versions of a statement can be prepared and adapted as required. It is surprising how much of a statement can be written, leaving only a few spaces that need to be filled in. The statements mustn’t contain any inaccuracies or speculation. They should just state the known facts and incorporate these key messages:

• “We are sorry this happened, we are extremely concerned, and we are doing everything possible to contain the effects of the crisis.”

• “Not all the relevant details are available at this time. The investigation is underway. A spokesperson will be available to comment and provide an update at [time].” This shows a willingness to provide accurate information openly and regularly.

• Supplement all actions with third-party support where possible. “Experts” can support or explain the context of the crisis and your organization’s actions.

Prepare Support Ahead of Time
Positive background material (for video use on the web and social media as well news media) prepared in advance may cover safety procedures, operational processes, and corporate detail.

Spokespersons should be prepared to say good things about your organization, its products or services, safety record, audits, management, and the organization’s previous record. If they don’t, nobody else will.

Persuade Senior Management to Approve Your Crisis Communication Plan
My article, “How to get senior management to act on your crisis communication plan,” will help you put a case to your organization’s management to commit to the prevention and minimization of issues and crises. This will help to minimize the number of times your organization is obliged to communicate during a crisis.

Kim J. Harrison, founder and director of Cutting Edge PR, is a communication professional, consultant, and CEO. Harrison has a wide experience in corporate communication and business management and is a former PRIA national board member. He has been quoted in news media, in industry publications, and by the New York Times. For the full article, Communicating During a Crisis, and many other articles about crises and other topics, go to www.cuttingedgepr.com.