Handling a crisis effectively: will you be ready if your company comes under scrutiny? Here's how to sharpen your public-relations skills - crisis management

Nation's Business, Dec, 1993 by Roberta Maynard

Some major corporations in recent years have drawn widespread attention because of potentially devastating business crises they suddenly faced. The need for effective public relations is not just a big-business concern, however. Small firms, too, can encounter serious business problems that can attract unwanted scrutiny.

In this age of heightened consumer awareness and rapid news dissemination, preparing to manage crises and respond under fire can help mitigate the effects of almost every kind of problem, ranging from allegations of defective products to workplace accidents.

Why plan? "Every decision you can make before a crisis is apt to be more rational than when you are in the middle of it," says Hal Warner, executive vice president and director of crisis management for Manning, Selvage, and Lee, a public-relations firm headquartered in New York. If you have prepared for the crisis, Warner says, decisions will be more rational and better received, and the crisis will be of shorter duration.

To prepare a plan for your company, talk with key employees about what could happen, however unlikely. List categories of crises, such as "accidental" (a chemical spill) and "criminal" (product tampering, terrorism). Discuss the worst possibilities.

Determine who will notify families if workers are killed or injured. Formulate procedures for evacuating employees, protecting inventory from damage, and carrying on routine business if, for example, electrical power fails, or a strike takes place, or a major supplier goes bankrupt. Decide on a procedure for contacting vendors and suppliers.

Designate a spokesperson, a clear-thinking and articulate individual who has a day-to-day grasp of the business and who knows how to convey key messages. If the spokesperson is to be the CEO, name a backup authorized to represent the company if the CEO is away.

If a situation calls for talking with the news media (or suppliers or customers), do so without delay. Maintain a list of news personnel to be contacted and relevant data about the company that might be needed to respond to their questions. "Anticipate the mind-set of the public," Warner says. The more quickly the company responds, the more likely it is to take action, people believe. "There is a very small window, usually within hours, depending on the seriousness of the situation," he says.

Companies not only must come forward quickly but also must provide the right information. People want the truth. This was demonstrated by the results of a recent survey by the public-relations firm of Porter/Novelli, based in New York.

The survey respondents stated the leading causes of their anger about crises: when the company involved refuses to accept blame or responsibility, when the crisis could easily have been avoided, when the company supplies incomplete or inaccurate information, and when the company places corporate profits ahead of the public interest. Ninety-five percent of the respondents said they are more offended when a company lies about a crisis than they are about the crisis itself.

Similarly, a "no comment" response-- regardless of how wise it may seem from a legal perspective--will hurt a business in a crisis rather than help it. (See the charts on Page 55.) "You may not be able to say much, but you can say something. If all the facts aren't there, get out and say so," Warner says. He advises that the public and the news media be told that "you will share the information as soon as you can, no matter what it is. This says, 'We are taking control of our crisis.'"

Trying to "correct" the public's perception of the facts can be an uphill, even unwinnable battle, as hundreds of local United Ways discovered following the management scandal that rocked the United Way of America two years ago.

When the news broke that the United Way of America's president and CEO at the time, William Aramony, had allegedly used organization funds to finance a luxurious lifestyle, local United Way offices were besieged with calls, several to cancel pledges.

"Contributors were upset because they thought that their money went to this man's pocket," says Chris Salerno, director of marketing and communications for the United Way of Henderson County, in Hendersonville, N.C. which serves a community of 80,000.

The local organization's challenge was to get the word out quickly that it is an independent entity run by community volunteers who set policy and determine funding to meet their community's needs.

No more than 0.75 percent of the money raised by the Henderson County United Way goes to the United Way of America, which is based in the Washington, D.C., area. The Henderson County group's board of directors suspended payment of those annual membership dues for several months, and Salerno's office produced mailings, newspaper ads, and radio public service announcements. But eight months later, people were still asking where their donations were going. "People's perceptions are what they believe," Salerno says. "Reality, sometimes, is a distant second."