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crisis_presentation

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                     Risks, crises and
                     communications
                    Trevor Cook, Jackson Well Morris
                                    August 2004



1. Summary
Risk and crisis communication are part of a continuum of activity that
every organisation must engage in. The worst crises occur when an
organisation finds itself at odds with the community around it.
Dealing effectively          with    crises   requires         leadership as      well as
planning.

Success in avoiding and managing crises requires an organisation to:

     Align its values with those of its stakeholders and to avoid being left
      stranded when the world changes and the music stops.

     Maintain relationships with sta keholde rs, a crisis is no time to start
      making friends.

     Pre pare for a crisis, it may never happen (though the probability has
      increased in recent decades) but fast and accurate responses are impossible in
      a crisis if you have to start from scratch.

     Every crisis is also a test of leadership, planning alone is not enough. An
      organisation needs leaders that can respond quickly and effectively to rapid
      change in pressure situations. T hese leaders need to be able to ‗connect‘
      intuitively    with   stakeholders   under    stress,    generating   confidence   and
      credibility.

In the February 2004 issue of Chief Executive magazine, Citigroup Chairman
Sandy Weill said, ―One lesson we‘ve all learned – and our company has
learned it in spades – is that reputational risk is every bit as important, if not
more so than credit risk and market risk‖

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2. Seven rules of risk communication 1
While these rules2 were originally developed with health risks in
mind,    they    apply     equally    to      any   situation   where      you     must
communicate to a variety of audiences about an incident, accident or
health or safety risk.


1 Involve stakeholders
A basic tenet of risk communication is that people a nd communities have a right
to partic ipate in dec isions that a ffect the ir lives a nd the things they value.

Guide lines:    Demonstrate     your respect    and the   sincerity   by   involving the
community early, before important decisions are made.

Points to Consider:      The goal should be to produce an informed public that is
involved, interested, reasonable, thoughtful, solution-oriented, and collaborative; it
should not be to diffuse public concerns or replace action.


2 Plan thoroughly
Planning is essential; making it up in a crisis is a recipe for disaster.

Guide lines: Begin with c lear, explic it objectives— such as providing information
to the public, motivating individuals to act, stimulating response to emergencies, or
contributing to the resolution of conflict.   Evaluate the information you have about
the risk and know its strengths and weaknesses. Classify and segment the various
groups in your audience.    Recruit spokespeople who are good at presentation and
interaction. Train your staff—including technical staff—in communication skills.

Points to Conside r: 1. The process of planning is as important as the ‗document‘.
The goal is organisational and individual understanding not a perfect piece of paper.
2. Plans must be changed when objectives or circumstances change.




1
  The material for sections 2, 3, and 4 via Colin McKay - links can be found at:
http://www.globalprblogweek.com/archives/basic_principles_for.php
2
  The following ‗rules‘ are adapted from an Environmental Protection Agency
pamphlet, based on the work of Vincent T. Covello and Frederick H. Allen.
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3 Engage with the real world
Communication is a two-way activity. See the world „as it is‟, not as your
organisation would like it to be. Information „dumps‟ don‟t work.

Guide lines:   Do not make assumptions about what people know, think, or want.
Take the time to find out what people are thinking: use techniques such as feedback
loops (including blogs) interviews, focus groups, and surveys.       Let all stakeholders
be heard (not just the ‗nice‘ ones).       Identify with your audience and try to put
yourself in their place.   Recognize people‘s e motions.     Let people know that you
understand what they said. Recognize the ―hidden agenda,‖ symbolic meanings, and
broader economic or political considerations that often unde rlie and complicate the
task of risk communic ation.

Points to Consider: People are often more concerned about trust, credibility,
competence, control, voluntariness, fairness, caring, and compassion than about
mortality statistics and the details of quantitative risk assessment. You, as well as
your messages, must be credible.


4 Be honest, frank, and open
Trust and c redibility are the communicator‟s most precious assets.

Guide lines: State your credentials; but do not ask or expect to be trusted by the
public. If you do not know an answer or are uncertain, say so. Get back to people
with answers.      Admit   mistakes.    Disclose    information as    soon as    possible
(emphasising any reservations about reliability).      Do not minimise or exaggerate.
Speculate only with great caution. If in doubt, share more information, not less—or
people may think you are hiding something.         Discuss data uncertainties, strengths
and weaknesses — including the ones identified by other credible sources.        Identify
worst-case estimates and cite ranges of risk estimates when appropriate.

Points to Consider: Trust and c redibility are difficult to obtain, once lost they are
almost impossible to regain co mpletely.




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5 Coordinate and collaborate
Consensus and third-party validation ca n be very powerful.

Guide lines: Take time to coordinate all inter-organisational and intra-organisational
communications.      Devote effort and resources to the slow, hard work of building
bridges w ith other organisations.       Use credible and authoritative intermediaries.
Consult with others to determine who is best able to answer questions about r isk.
Try to issue communications jointly with other trustworthy sources (for example,
credible university scientists, physicians, or trusted local off icials).

Points to Consider:        Few things make risk communication more difficult than
conflicts or public disagreements with other credible sources.


6 Work with the media
The media is c ritical in setting a gendas and in determining outcomes.

Guide lines:     Be open with and accessible. Respect their deadlines. Provide
information tailored to the needs of each media (for example, graphics and other
visual aids for television).    Prepare background materials on complex risk issues.
Establish long-term relationships with specific editors and reporters.

Points to Conside r: The media are often more interested in politics than in risk; in
simplicity than in complexity; in danger than in safety.


7 Speak clearly and with compassion
Technical language and jargon a re barrie rs to successful communication.

Guide lines: Use simple, non-technical language. Be sensitive to local norms, such
as speech and dress.      Use vivid, concrete images that communicate on a personal
level.   Use examples and anecdotes.         Avoid distant, abstract, unfeeling la nguage
about deaths, injuries, and illnesses. Acknow ledge and respond (both in words and
with actions) to emotions that people express- anxiety, fear, anger, outrage,
helplessness.   Ac knowledge and respond to the distinctions that the public
views as important in evaluating risks, e.g., voluntar iness, controllability,
familiarity, dread, origin (natural or man-made), bene fits, fairness, and
catastrophic potential. Use risk comparisons to help put risks in perspective; but
avoid comparisons that ignore distinctions that people consider impo rtant.       Always
try to include a discussion of actions that are under way or can be taken. Tell people
what you cannot do. Promise what you can do, and be sure to do what you promise.
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Points to Consider: 1. Regardless of how well you communicate, some people w ill
not be satisfied. 2. Never let your efforts to inform people about risks prevent you
from acknow ledging- and saying- that any illness, injury, or death is a tragedy. 3. If
people are sufficiently motivated, they are quite capable of understanding complex
risk information, even if they may not agree with you.




3. Some common dilemmas
From Peter Sandman 3

       Candour versus secrecy

       Speculation versus refusal to speculate

       Tentativeness versus confidence

       Being alarming versus being reassuring

       Being human versus being professional

       Being apologetic versus being defensive

       Erring on the side of caution versus taking chances




4. Tips on messaging in a crisis
From Peter Sandman, see also rule 4 in section 2 above,

       Tell people what to expect. Offer people things to do.

       Don‘t lie, and don‘t tell half-truths. Aim for total candour and transparency.

       Acknowledge (and apologise for) errors, deficiencies, and misbehaviours.

       Don‘t over-reassure. Err on the alarming side.

       Acknowledge uncertainty. Share dilemmas. Acknow ledge opinion diversity.

       Be willing to speculate.

       Don‘t ridicule the public‘s emotions. Tolerate early over-reactions.

       Establish your ow n humanity.

       Be explicit about changes in official opinion, prediction, or policy.



3
    http://www.psandman.com/
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5. Crisis as serious misalignment of values
It can be difficult to explain why some issues become crises. One
explanation can be simple bad luck, another that a routine problem
gets handled badly. Yet the big crises often seem to result because
an organisation‟s values have become seriously out of whack with
the community‟s. Sometimes, perhaps often, this is combined with an
internal culture that is seriously dysfunctional.


The ‘I don’t get it’ moment – Dr Hollingworth
―I believe she was more than 14. And I also understand that many years later in
adult life, their relationship resumed and it was part ly a pastoral relationship and it
was partly something more. My belief is that this was not sex abuse. There was no
suggestion of rape or anything like that. Quite the contrary, my information is
that it was, rathe r, the othe r way around. And I don't want to say any more
than that.‖ – Dr Peter Hollingworth, February 2002 4


The wrong defence – the bulldogs scandal
―Some of the boys love a bun‖ - anonymous player quoted by the Sun-Herald early
in the life of the crisis.

―From the moment that phrase was uttered … the focus switched … to whether an
entire sporting code was guilty ― of offensive sexual behaviour – the Weekend
Australian magazine, 7,8 August 2004.

―They've come out and their defence has been, according to the 'Sun Herald' last
Sunday that they had group sex the week before w ith the woman. That is not a
defence. People don't want to hear that. It's wrong. It's not acceptable public
behaviour.” 5 – Max Markson, 7.30 Report, 4 March 2004.




4
    http://www.abc.net.au/austory/transcripts/s479623.ht m
5
    http://www.abc.net.au/7.30/content/2004/s1059234.ht m
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An unacceptable corporate deception – James Hardie
"James Hardie might be able to run away and hide in the Netherlands but they can't
hide their products and they can't stop the Australian community ma king
moral decisions not to support them," Labor Council deputy assistant secretary
Chris Christodoulou told the rally, which was attended by about 80 people‖. 6


A misunderstanding – the Red Cross Bali Appeal
―The appeal was marred by criticism, w ith allegations that the Red Cross was too
slow in dishing out the funds and that it was profiting from the goodwill of
donating Australians. The furore led to some donors requesting their money be
refunded.

PwC and the NSW and Victorian governments later cleared the charity of any
financial wrongdoing, but found that communication of the facts of the appeal to
donors could have been improved.‖ – AAP, 2 August 2004 7


They so knew it was wrong - Enron
It's clear from the tapes that Enron employees kne w what they we re doing
was wrong:

Employee 3: "This guy from the Wall Street Journal calls me up a little bit ago…"
Employee 4: "I wouldn't do it, because first of all you'd have to tell 'em a lot of lies
because if you told the truth…"
Employee 3: "I'd get in trouble."
Employee 4: "You'd get in trouble." 8

The junior blew the whistle - NAB
―Vanessa McCallum - the most junior person on the bank's currency options trading
desk - alerted another employee to a fictitious transaction in early January,
according to the Nine Network's Business Sunday program. Ms McCallum, a
Melbourne University commerce graduate, joined the bank under its graduate
recruit ment scheme in 2001.‖ – News Limited – 8 March 2004

Note - what was everyone else in this huge corporate edifice doing?



6
    http://www.smh.com.au/articles/2004/08/04/1091557910220.ht ml
7
    http://news.nine msn.com.au/article.aspx?id=13745
8
    http://www.cbsnews.com/stories/2004/06/02/eveningnews/main620795.sht ml
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No-one spoke-up – NASA’s culture caused deaths
―The Columbia Accident Investigation Board concluded last year that the Feb. 1,
2003, Columbia, accident, which killed seven astronauts, resulted as much from
NASA's broken safety culture and re luctance to ra ise concerns as it did from a
piece of foam insulation that knocked a hole in the shuttle's wing on liftoff.

The (internal communications audit) report said the survey showed that open
communication was not the norm, a nd that employees did not feel fully
comfortable raising safety concerns with ma nagement.

According to the report: "Excellence is a treasured value when it comes to technical
work, but is not seen by many NASA personnel as an imperative for other aspects of
the organization's functioning," including management and communication.‖ - From
an article published in the NY Times on April 14, 2004




6. Staying aligned with changing norms
“If, to one who governs himself with caution and patience, times and affairs
converge in such a way that his administration is successful, his fortune is
made; but if times and affairs change, he is ruined if he does not change his
course of action. But a man is not often found (who can) accommodate
himself to the change, both because he cannot deviate from what nature
inclines him to, and also because, having always prospered by acting in
one way, he cannot be persuaded that it is well to leave it.”
Machiavelli, The Prince.

The goal of ensuring an organisation‘s values move w ith the times requires the use
of suite of programs – all aimed at openness, transparency and building strong
relationships with all stakeholders, these include:

      Corporate    social responsibility   programs   (especially   those   that   engage
       employees)
      Triple bottom-line reporting
      Stakeholder dialogue programs – including blogs for interacting internally and
       externally with customers
      Modern corporate governance practices
      Media and issues training
      Surveys and focus groups
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7. Turning the corner
It is also possible to re-align with community attitudes but it takes
time and some drastic changes.

Fast food – ignored obesity for a long time, not ‗out problem‘. Until recently, the
community seemed to accept that view but with the rising tide of concern about
obesity that ‗isolationist‘ view is no longer acceptable.

Guy Russo 9 , Australian maccas boss, was prompted by his participation in a round of
state-based obesity summits and similar forums to adopt the view that McDonald‘s
had to be part of the solution.

There was also an immediate commercial problem – increasing consumer resistance
to a menu that looked too ‗limited‘. As well as being concerned with their children‘s
health, many people were refusing to visit McDonalds because there was nothing for
them and so on. People now want more variety. They also want more ‗authentic‘
looking food.

The good news for McDonalds is that their business model is not based around
particular food types ie burgers, chips and shakes. Their business model is about
delivering any sort of food quickly and cheaply.

The launch of Saladsplus was the best thing to happen to McDonalds in Australia
since it introduced breakfast a couple of decades ago. The increase in revenue from
Saladplus was the equivalent of opening about 130 new stores.

So sometimes at least, doing the right thing, can be good for business. Though,
changing the views of some critics will take a long time.

Addressing the obesity problem has required a far-reaching program of change by
McDonalds – as well as new products, there has been nutritional labelling, reducing
fat & sugar contents, changing some cooking practices. The Saladsplus range is also
being improved.

Nevertheless, there was no real choice for McDonalds – staying in touch with
contemporary society is a business ‗must do‘.




9
    Disclosure: I‘ve done some recent work for McDonalds
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8. Leadership in a crisis 10
“I felt bewildered. It surprised me, because there's been a lot of
vitriolic reaction, and Ann often says to me, "What is it about you
that some people seem to find so difficult?" I wished I knew. And
I...I...if I could find the answer I would try and reform myself. I
really would, because it's sad and it's hurtful and I don't mean it.” 11
– Dr Peter Hollingworth, February 2002.

Daniel Goleman (Harvard Business School) found that effective leaders needed to be
able sw itch between various styles of leadership (shades of Machiavelli). This is
especially true because every crisis is different, even unique.

Another Harvard Business School expert, John Kotter, defines leadership as the
ability to cope with change. A crisis is all about change, extreme change.

Nevertheless, leadership and crisis change are very different. Crisis leaders must be:

        Excellent communicators – with all stakeholders. Being the lead communicator
         is probably the crisis leader‘s most important jobs.

        People w ith a strong core set of values, w hich allows them to connect
         emotionally and which they can rely on to set directions, convey visions.

        Able to generate trust, authenticity and inf luence – these are the key traits of
         successful crisis leadership.

        Decisive – including an ability to react rapidly.

        Able to work a cross a broad spread of information.




10
   Much of the material in this section comes from Allan L Schoenberg, ―What it
means to lead during a crisis‖ – a report on his recent research on crisis leadership
done at Syracuse University
11
   http://www.abc.net.au/austory/transcripts/s479623.ht m
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9. The first hours matter
Planning and leade rship come togethe r in the first responses to an inc ident,
getting it wrong can be disastrous. This stuff-up by Ma rtha Ste wart has it all
– failure to change with the circ umstances and a n attempt to duc k ha rd
questions.

―The media feeding frenzy around Stewart‘s fall from grace began aft er her now
infamous appearance on CBS' The Early Show. During her then weekly cooking
segment, she was asked about the ImClone issue.

Stewart trie d to dodge the question and note d she wa nted to focus on her
salad. Media training executives around the globe quickly added the footage to their
training tapes of how not to handle direct questions.

―This interview took place too soon after the ImClone story broke,‖ says Dezenhall 1 2 .
―She was too flip and hadn't endured the crucible long enough to show human depth.
When you live by personality you can die by personality. There are acute limits to
what you can do with someone with Martha's personality.

―The same doggedness that served her well on the way up, served her poorly on the
way down. Avoiding the CBS salad interview would have been a good place to start.
But you can't tell divas that diva behaviour is w rong. After all, until now it was
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effective.‖




10. The impact of new technologies
Local is global
We‘re so much more in touch, information travels fast:

        Online media and blogs

        Google alerts

        Search engines


Internal is external
http://www.internalmemo.com & crikey


12
     http://www.dezenhall.com/eric.ht m
13
     http://www.globalprblogweek.com/archives/the_martha_stewart_c.php
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Using blogs in a crisis
From Jim Horton, a Ne w Yorker PR practitione r, during Globa l PR Blog
Wee k14:

―It was a difficult time because facts weren't available to the client at the beginning
of the turmoil, and there was a period in whic h the media seemed to know far
more about what was happe ning tha n the client. The client never did catch up
with the news cycle and by time stories died away, the impression that the company
had been engaged in w rongdoing was rooted, although the company now has a
strong, fact-based case for its innocence.

How would blogging fit into a situation like this? Blogging, as some define it, -- a
place to record opinion and insights -- does not fit. However, blogging as a
continuous record of facts and corrections of errors in near real time would have
been valuable. Regrettably, the client did not use the blogging tool but did make use
of its Web page. A key difference between a Web page and blogging was critical. The
corporate communications director relied on the Webmaster to upload information to
the Web page. With a blog, the director could have created a content stream
directly. Speed was critical.

The problem in a crisis is not opinion but facts. What you do not want is opinion or
speculation. Either can touch off chaos and lawsuits. You need to state quickly and
accurately what happened to whom, where, when and how. You need to state what
the company is going to do about it, although you might not be able to give details.
You need to answer questions quickly and accurately and to knock down rumours
convincingly.

If a company cannot lead the media in getting the 5W's out, it is condemned to
follow, and news at the beginning of any crisis is filled w ith inaccuracy. You have
seen this yourself.

"There were 500 people killed. Correction. There were about 200 people killed.
Correction, the latest tally is less than 100. Further correction. The final count of
people killed was 56. "

Blogging is useful in such instances. One might not have a final count, but absurd
figures like "500 people killed" could be knocked down at once. Further, blogging can
add detail as it is verified and slow speculation. In the instance above, the last name
of an individual convinced some reporters that a foreign country was involved in


14
     http://www.globalprblogweek.com/archives/blogging_in_a_crisis.php
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wrongdoing. The allegation was and is absurd, but it continues to surface and some
"investigative" reporters appear to believe it. Blogging could have dented that
rumour quickly by showing how stupid the allegation is.

Who should blog in a crisis? One person and one person only reporting directly to the
CEO or to the corporate communications person who reports directly to the CEO.
Facts as they come in should be verif ied for this person. Copy should be vetted
before publishing -- yes, even by legal counsel. There should be no hint of
individuality in the blog and EVERYTHING must be approved. The blogger speaks for
the company and never for himself or herself.

The company in the international incident is now fighting lawsuits. You can bet every
word the CEO and corporate communications director have spoken and written will
go under a tort attorney's microscope. Even a minor slip will be used against them.

To summarize, blogging, because it is an easy tool to use, has a role in crisis
communications to get out facts, to project a company's message and to combat
error.‖




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Appendix 1. The basic requirements
Don Crowther contributed this list 1 5 during Global PR Blog Week 1.0 in J uly 2004.

1. A list of the members of the crisis ma nagement team, w hich should include,
at minimu m, the CEO, a trusted assistant/top manager from the CEO's office, heads
of each depart ment, public relations and marketing team members, legal and
security. In case of actual crisis, this team w ill be focused down to the group
applicable to that specific crisis.

2.    Contact    information      for   key   officers,   spokespeople,    and    crisis
management team membe rs including company and personal phone numbers,
email addresses, cell numbers, pagers, faxes, instant message handles, addresses,
even spouse's cell numbers.

3. Fact sheets on the company, each division, each physical location, and each
product offered. These should be in camera-ready condition, plus available on a disk
in a generally-accepted word processor format (Microsoft Word) so they can be
revised and printed out if necessary on a computer external to your facilities. Photos
should also be included.

4. Profiles and biographies for each key manager in your company, again in
camera-ready condition and on disk.

5. Copies of your company, division and product logos, your press re lease
format and the scanned in signature of your CEO on disk in a format that
works on your internal word processing program (plus one in Microsoft Word in case
you have to work on a computer that isn't tied to your network.)

6. Pre-writte n scripts answering key questions that you have generated
through your crisis scenario analysis. Included in these scripts should be the words
you use to say "we don't have that information yet, but will let you know as soon as
it becomes available."

7. Contact information for each of your key media contacts both locally,
nationally, and if appropriate, key f inancial press and analysts. Contact information
for your appropriate political, regulatory, and union leaders should also be included.
Don't be afraid to go overboard here - if you have a large chemical release, your CEO
will probably want to call not only the Mayor, but local MPs and Ministers‘ offices.


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     http://www.globalprblogweek.com/archives/7_musthave_elements_.php
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Appendix 2. Exercise
Your c lie nt is the US beef industry, a cow in Cana da has been dia gnosed
with BSE. What do you do?

―Canadian officials announced on Tuesday, May 20, 2003, that a single case of
Bovine Spongiform Encephalopathy (BSE or "mad cow" disease) had been diagnosed
in Alberta. The National Cattlemen's Beef Association, on behalf of America's beef
producers, immediately put into action its BSE Crisis Management Plan, which had
been developed and refined since 1997. During those f irst intense hours - and in the
weeks following -consumers were successfully reassured that America's beef supply
is safe.‖

Find the case study here - http://prcdemo.prsa.org/dbtw-wpd/exec/dbtwpub.dll




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