Preparing for a Crisis Situation

7 December 1999

By Vicky Nolan

When bad publicity occurs, many online gaming operators' first inclination is to hide from the press and refuse to answer questions. Unfortunately, instead of keeping a lid on problems, this response only adds fuel to the fire threatening to burn your business reputation. Instead of hiding from a crisis, you need to aggressively confront and handle it. The best way to do it is with a prepared response--a crisis preparation plan.

It seems hard to prepare for something that hasn't happened yet, but it's possible, and it's necessary. A crisis plan is developed by thinking about how to look good in case something bad has happened.

What constitutes a crisis situation? The Institute of Crisis Management (www.crisisexperts.com) defines a crisis as "a significant business disruption which stimulates extensive news media coverage. The resulting public scrutiny will affect the organization's normal operations and also could have a political, legal, financial and governmental impact on its business. Additionally, PR Central's "Crisis Scorecard" states, "A crisis, in the public relations context, is any event that threatens to undermine the relationship between an organization and one or more of its key stakeholders: employees, customers, shareholders and the community. The stakeholders most affected by a crisis expect an organization to behave as though its relationship with them is important. This is, not surprisingly, easier to do if an organization behaves that way on a day to day basis."

Crisis preparation begins with self-examination. Businesses need to examine how their customers view them, especially in an industry that already faces notoriety. Customers place a certain amount of trust in your business practices, and if you don't work to keep their trust, then a little bit of bad publicity can go a long way toward harming your business.

Public relations students, according to Liese Hutchison, assistant professor, department of communications, St. Louis University, study several famous responses to crisis situations. Two example cases are highlighted here:

• How not to handle a crisis:Exxon
  Following the environmental disaster when the tanker Exxon Valdez spilled oil in Alaska, Exxon executives failed to answer questions promptly and the CEO waited to visit the site several weeks after the incident. The company basically responded to one of the worst environmental disasters in an arrogant and uncaring manner.Ten years later, Exxon is still mopping up its public image, seemingly tainted forever with an unsympathetic visage.

• How to successfully handle a crisis:Diet Pepsi
  When a syringe was reported to have been found inside a Diet Pepsi can, the company immediately sent out their CEO to talk with the media about the company, the Food and Drug Administration was quickly brought into the bottling plant for an inspection and videotape showing the bottling process was widely distributed.The company responded quickly and consistently, with the result that most people had a positive image of Diet Pepsi and were not surprised when it was announced that a consumer had planted the syringe. Consumers aren't as likely to remember the case because it was settled in such a positive manner.

"Crisis is the ultimate branding opportunity," said Paul Hicks, managing director of the worldwide corporate practice, Ogilvy PR Worldwide (www.ogilvy.com). If a crisis is adverse publicity, how can it be an opportunity? Hicks suggest that Starnet, an Ogilvy client, is an example of turning a crisis into opportunity.

Starnet had been called "a reputable pioneer of Internet trading" during a 1998 "Nightline" broadcast, according to a Newsweek article. The company had applied for permission to trade on the NASDAQ and profits were soaring. Then came the RCMP raid of Starnet's Vancouver offices and subsequent freeze of several company bank accounts. Suddenly, it seemed like troubles were crawling out of the woodwork.

Instead of hiding behind no-comments and ignoring the press, Starnet leapt into action with a flurry of press releases, announcement and changes. Within a few short months, the company has regained much of its luster and business seems to be going strong, even though its legal woes are still very much alive. With good PR, the company has beaten the odds and survived a barrage of bad fortune that good have easily spelled the end.

"Starnet is a success story because very few companies could withstand a raid and shutdown. They responded quickly, told the truth and tried to maintain minimal disruption to the company," added Hicks. He recommends that other industry players ask themselves, "Why not me today, since it was Starnet yesterday?"

Hicks approaches his clients about putting together a crisis plan by discussing strategy, tactics and examples of what Olgilvy has learned from other companies. Then the firm recommends an infrastructure for handling a crisis situation. Olgilvy personnel researches cases matching the client's ideas to serve as a reference point.

He said that strategy depends upon the type of company and who are its most important influencers. As he pointed out, "News travels fastest over the Internet." One of the biggest mistakes a company can make during a crisis is getting off strategy, he added.

Hicks approaches his clients about putting together a crisis plan by discussing strategy, tactics and examples of what their firm has learned from other companies, then they recommend an infrastructure on handling a crisis situation. The firm personnel research cases matching the company's ideas to serve as a reference point for the client.

"Some companies like to have us test them, like having a hacker come in and discuss how they break into a computer system or have an outside security person come in," Hicks said

Crisis preparation is when you "look at the business and poke holes in it" explained Simone Valley, vice president, Shadwick International (www.shandwick.com). "You don't want to be learning during a crisis," she added.

Valley advises that companies need to anticipate where problems might originate. She also recommends that clients have a team in place before anything happens. "You need to get information to the right place and decide what the game plan is going to be," she said.

The Institute for Crisis Management published "Crisis Preparedness Questions For Your Next Management Meeting" that includes the following suggested conversation topics:

1. What kind of management notification system do we have in place if a crisis occurs during non-business hours?
   a. How long would it take to reach everyone on the management committee if we had a crisis at 3:00 p.m. on a Saturday?
2. What is our corporate emergency response plan like?
   a. When was it last updated?
   b. Has it ever been used or tested to see if it works?
   c. How well does it tie in with the response plans of our other facilities?
3. What internal problems or other vulnerabilities do we have that could be damaging to our business if they went "public"?
   a. What would be the public reaction if one of them was disclosed by a disgruntled employee, or in a stockholder lawsuit, government investigation or investigative news report?
   b. How would we explain or justify the situation so it would have minimum business and financial impact on our company?
   c. What's being done to minimize the chances of that problem occurring?
4. Who would be our spokesperson(s) in a crisis situation?
   a. Who would be the alternative if they were not available or not appropriate for that kind of crisis situation?
   b. How good would they be in handling tough questions from reporters?
   c. How much confidence do we have that they will be credible and convincing?
   d. How would disclosures be handled at one of our facilities if they had a crisis? Who would be the designated spokesperson?
5. How much information would we give out if we had a crisis?
   a. Who would decide what to say?
   b. What would be the approval process? How long would it take?
6. How would we contact our management and employees so they would hear from us before learning about it from the news media?
   a. How about our customers, suppliers and other key audiences?
   b. How would we do it, and how long would it take?
7. What crisis situations have similar organizations had in the past year that went "public?" How well would we have handled those crises?
   a. How much management time has it taken? How much has it cost them so far in expenses, lost business?
   b. What are the prospects for lawsuits, government investigations? How long will it be before they get the problem behind them?
   c. How would we have done if it had happened to us instead of them?
   d. What can be learned from their experiences?
   e. Have we made any changes in the way we do business as a result of what happened to them?

You might want to apply these questions to your own company and see how well you have developed plans for dealing with a crisis. (You can research this and lots more information at the Institute for Crisis Management's website, www.crisisexperts.com.)

Hank Walshak, president of Walshak Communications (www.aprgiant.com), recommends to his clients that before anything happens, they should discuss "what if," then describe a situation.

Next, determine the critical steps, who in management will do what and choose a spokesperson. (Usually the company CEO is chosen to represent the company during a crisis situation.) Also, he suggests coming up with a list of possible questions the media would ask and try to come up with answers.

Finally, after a crisis situation, the company needs to debrief so they can analyze what was successful and what turned out to be a failure in their response to the situation.

Walshak has some advise for spokespersons too. He urges that a person representing a company before the media for the first time needs coaching. "If you've never been interviewed on television, it can be scary," he said. "The cameras have big lights and some TV reporters can be pretty aggressive."

"The spokesperson needs to be articulate, quick on their feet and knowledgeable," said Walshak. "They need to talk in sound bites or headlines." He also recommends that the designated spokesperson practice answering typical questions beforehand--especially those that may be problematic--for a smoother response to media questions.

Only one person should be designated as the spokesperson; that person controls the flow of information to the media. When a company has more than one spokesperson answering questions, the message(s) can get confused or be off-target.

Additionally, Walshak advises that the person answering calls at your company during a crisis needs to know where to direct the calls. It does your company no good if the media cannot get past a gatekeeper.

As the old adage suggests, "Always be prepared!" Crisis preparation can save your business and its reputation. Bad press always leaves more of an impression in the beholder than good press. That's why you need to prepare for a crisis and turn it into an opportunity for your business.

In the course of researching the topics covered in this series of articles, you might want to check out the following sites: www.mwwpr.com, www.psbpr.com, www.odwyerpr.com or www.prcentral.com.

This article is the third of a three-part series on public relations. Click on the links below view the other two articles:
Part 1
Part 2

Preparing for a Crisis Situation is republished from iGamingNews.com.