Crisis management

Thinking more about the potential for terrorist attacks or accidents involving your trucks or bulk storage facilities? Lots of people in the business are doing that these days.

The National Propane Gas Association is sponsoring an industry-wide study of security issues that is still not complete after months of study. And the Propane Education & Research Council, in cooperation with NPGA, has published a 15-page manual called “Crisis Management: A Guide to Effective Communications” that recommends that propane businesses think the unthinkable and plan their response to any potential crisis.

The idea is that if you think through your response to worst-case scenarios in advance, you may be able to minimize the damage to your business if they ever occur.

These days, businesses must be concerned with more than overturned bobtails or gas leaks at the tanks and appliances of customers. Any business can be hit by natural disasters, abductions and hostage situations, plane crashes, bomb threats and a wide range of violent acts. Experts define crisis as any turning point or decisive moment in your business operations. It can be related to products, services, policies, practices, finances, human resources or political, economic and social issues in any part of the world.

In the wake of the Sept. 11 terrorist attacks, many consultants say you need to cover more than the usual eventualities; you must actively prepare for the kind of incidents that would never have been considered just a few years ago.

Bruce T. Blythe, chief consultant at Crisis Management International in Atlanta, says the terrorist threat requires a new perspective and mindset. He suggests businesses gather a planning team to identify their company’s inherent, foreseeable risks and vulnerabilities. They should identify what acts could bring the greatest damage to the organization with the least amount of time, expertise and effort.

Those threats should result in new security strategies and a clear outline of the way that organization will respond to such incidents.

“It is important to think purposefully about the reality that really bad things can happen,” Blythe says.

Some organizations resist preparing for critical incidents because they are in denial and don’t want to admit their vulnerabilities. Others are so exclusively focused on success and their strengths that they “underestimate their weaknesses and leave themselves exposed,” he says.

According to Blythe, crisis response planning is helpful not only in finding ways to prevent incidents, but also is reassuring to employees who need to feel that the organization cares about them, especially in troubled times.

Too many companies, Blythe suggests, have plans to assure the survival of computer systems and data, and have overlooked the impact of traumatic stress on people. How you will care for your employees should be part of your plan.

Areas of concern in crisis management planning include legal issues, security personnel, media relations, liaison with law enforcement, fire fighters and regulatory officials, and the stress and mental anguish that a major crisis may impose upon employees and the community.

Effective crisis response brings order out of chaos, and is not just compassionate and good public relations, Blythe says. It also “will reduce the risk of claims against your company, minimize damage to your reputation and improve loyalty and morale (which will improve your bottom line).”

The Team

Robert M. Berzok, retired director of communications for Union Carbide Corp., is the author of “Inside Organizational Communication” (International Association of Business Communicators, 1999). He says the way your company communicates effectively in a crisis is not much different than communicating effectively day-to-day.

A small group of senior managers who are most familiar with the crisis and its implications should be assembled as the crisis team. The composition of this group will vary, depending on the nature of the crisis. He advises always including an attorney, and in organizations where a communications/public relations department exists, a communications professional.

The team of company experts required to address a plant explosion will not be the same one assembled to discuss the implications of a hostile takeover, he notes.

“Each crisis is different, so be prepared to form different teams for different crises,” Berzok advises.

At a very early stage, the team should determine the immediate and potential impact that the crisis is expected to have on all audiences. That list includes the public (local, national and global), customers, employees, shareholders, regulatory officials, suppliers and retirees.

“Since the organization’s resources will be stretched during a crisis, determine the primary and secondary audiences that the organization wants to reach,” he advises. “Concentrate on these.”

In small organizations with an informal approach to communication, the chief financial officer or general counsel may handle press relations personally. The president, executive director, or a functional vice president – usually responsible for human resources – often communicates with employees. Community issues might be addressed by a branch, plant or office manager, he says.

The Media

Berzok also suggests selecting the media that best reach those audiences. Print media are important, but electronic media – including radio and television news, e-mail and Web communications – should also be given attention.

Print and broadcast media and wire services that serve both may be addressed with press releases, a press conference, or statements and briefings for selected press. Internet and Intranet sites, voice mail, e-mail and internal memos may be used to reach some constituencies, including employees. Customers, suppliers and shareholders might be addressed via mail. Meet with emergency response and regulatory officials more immediately.

He suggests designating a spokesperson at headquarters and anywhere else a crisis may be precipitated. The CEO is not necessarily the automatic choice, he cautions.

“The spokesperson should be someone who can best make emotional connections with the audience as specific messages are conveyed. Knowledge of the organization is less important than the ability to project warmth and compassion.”

The Message

All communications about a crisis should present the available facts simply, clearly, and with compassion.

“Tell the truth,” says the PERC crisis communications guide. “Communicate the facts honestly and clearly.”

In an industrial tragedy, speak of concern for victims. If it is a financial crisis, express concern for shareholders, employees, and customers who might be affected. If it is a consumer product crisis, speak of concern for consumers, retailers and others.

“It is essential to your business, and to the future of the propane industry, that the public believes its safety and well-being are your primary concern,” says the PERC guide. It later adds: “You should always show concern and compassion in every situation.”

Key messages should be that the safety of propane and the well-being of consumers “are of utmost importance to us,” that propane “is a trusted and reliable energy source that is used by millions of Americans each day,” and that you “will continue to provide information as it becomes available.”

It also recommends avoiding technical jargon, keeping your cool, avoiding guesses, exaggerations or underestimates, and keeping your promises.

“The good news is that with adequate preparation, a sense of perspective and a bit of discipline you can manage adverse publicity by participating in the communications process – instead of trying to avoid it,” the PERC guide says, “

Your crisis response should continuously respond to audience feedback and new information, Berzok adds. “Be prepared to adjust your communication plan and strategy as the crisis develops and changes.” Add new information, but most of all “don’t lose sight of the importance of making emotional connections.”

The guide also warns those inexperienced in dealing with the media to assume that everything is “on the record.” If you don’t want to see a comment in print, don’t make it.

In a major ongoing crisis, Berzok advises videotaping your daily press conferences in their entirety, and supplying copies of that tape to local television stations, even if networks are covering them.

“Some of your messages that may have been edited out of the network broadcasts may get used,” he says. “More important, the local station is likely to be more receptive to organizational messages because it will value receiving unedited press conference tapes from your organization.”

He also suggests that communications with employees include as much material from wire services, television and radio broadcasts and other news media as possible, with minimal editing.

“A message conveyed by a reporter or news broadcaster can be more credible than the same message from the organizational spokesperson or management.”

On the Scene

The PERC crisis planning guide suggests that the first step in any crisis is to define its parameters by clearly and succinctly answering questions including:

• What happened?
• How dangerous/serious is the situation?
• What is involved in returning the situation to normal?
• How long will it take?
• Will there be any danger during the resolution or afterwards?

The guide emphasizes company officials go to the scene of the incident as quickly as possible to help emergency personnel, and try to establish contact with your insurance company, attorney, and state or regional propane association. Get the names, addresses and telephone numbers of those who contact you about an incident, those are involved in it, the relevant authorities and any other eyewitnesses.

Before an insurance investigator arrives, photograph the scene from every angle. Don’t let anyone remove anything without first photographing the object from all sides and getting complete information about who is taking it and where it will be stored.

Jerry Brown, principal of Communicating with Impact, a Denver communications consulting firm, suggests messages to the media should be crafted after envisioning the headline you would like to see.

“If you don’t simplify your message, the media will do it for you. And they’ll often say it differently than you would,” he says.

Although a press interview may seem like a conversation, it is really a business transaction. Brown suggests writing out your key messages beforehand, and rehearsing them until they sound natural. During telephone interviews, keep a copy of them in front of you, and try to work in your main points as opportunities arise.

He warns against repeating an interviewer’s negative assertions, even to deny them. The negative words form the reporter’s question may end up in the story attributed to you.

He also suggests caution when a reporter tries to limit your choice or answers, asks a question designed to tempt you to speculate, or embeds a good quote in a question. Refuse to be limited by a question like, “Was it incompetence or stupidity?”

The PERC guide likewise warns against speculation. Propane industry spokespeople should not allow themselves to be lured into lurid comparisons. “Do not respond to media pressure to compare the incident to other known hazards, e.g., dynamite, nuclear explosions, etc.”

If public safety or health is threatened by the crisis incident, the media and the public will expect a company representative to speak. The Three Mile Island incident was a public relations fiasco, Brown says, because the electric company that owned that plant failed to provide timely, accurate information to regulatory officials and to the public when the power plant got into trouble. The company, in fact, “tried to hide information in a misguided effort to minimize its crisis.”

The 1982 incident in which someone added cyanide to Extra Strength Tylenol capsules in Chicago, resulting in several deaths, is cited by Brown as an example of efficient and effective handling of a corporate crisis. The company, Johnson & Johnson, immediately warned the public and kept the media fully informed. The company withdrew its product from store shelves and displayed an overriding concern for public health and full disclosure. As a result, the business and its reputation remained intact.

PERC recommends continuously monitoring all media to verify accuracy of news and to correct misinformation immediately. NPGA and PERC can provide back up for this function, if needed.

The Institute for Crisis Management (ICM) in Louisville, Ky., recommends making communications with your company’s managers and employees the top priority in a crisis. Designate communications staffers to handle public and media relations while a business continuity team manages the crisis and consults outside experts. Top management should concentrate on communicating with employees and their families, the board of directors, key investors and customers, and opinion leaders.

According to ICM, industrial accidents, sabotage and other catastrophic incidents are rare. It is not employee errors or natural disasters that trigger most crises, the consultant says. Most are “smoldering crises” that management knows about before they go public. ICM estimates that 63.3 percent are caused by management and 22.3 percent by employees.

The top causes on ICM’s list include white collar crime, labor disputes, mismanagement, defects and recalls, environmental issues, accidents, discrimination cases and class action suits.

Most newsworthy business crises are the results of management decisions, actions or inaction, according to ICM. Management often makes no preparation to deal with the possibility that an issue might become public. The characteristic attitude before the crisis breaks is, “the problem is not serious, nobody will find out.”

ICM says there may be a bottom-line impact to whatever you do in a crisis. It cites one of the worst environmental accidents in history, the Exxon Valdez oil spill, as one of the worst managed in history because of the lack of coordination between management, operations and communications.

When the $1 billion cleanup was over, Exxon was forced by the courts in Alaska to pay an additional $3 billion in compensatory and punitive damages.

“One can only speculate on how much less the punitive damages would have been if Exxon had expressed any empathy in the first days after the accident to local fishermen, local citizens and millions of TV viewers who were appalled and outraged by the damage done to Prince William Sound,” the consultant notes.