Anatomy of a Crisis

This quick blog will take a look at how most crises occur and the 9 phases by which they tend to play themselves out.

Malcolm Gladwell’s heralded 2008 book, Outliers, explains that in almost every major airline accident at least seven different precursors or signals are sent, completely ignored, or considered and dismissed prior to the catastrophe actually taking place.

On the surface however, most crises are declared to be a “surprise” that catches us completely off guard whether or not we’ve seen and ignored or misinterpreted the signals.

That “surprise” then generates a certain amount of panic or at a minimum, anxiety, that upsets our daily business routines and forces us to refocus our priorities and assume roles we are not always accustomed to performing. This panic goes beyond the company itself and permeates those stakeholders who are concerned about how they may be impacted by your problem: rank and file employees, near neighbors, customers, investors, vendors and government agencies and others.

This panic phase results in a rapid turn of events that can often resemble chaos where many things such as people’s reactions, environmental impacts, impacts on health and safety, traffic and routine operations seem to be out of our control. This chaos is only exacerbated by poor planning and poor training to manage situations that are unforeseen.

Inherent in these early phases is a lack of clear information and the inability to process or share important information in a timely manner. Still, this poor flow of internal information does nothing to stem media (and the stakeholder) demand to know four critical things: 1)what happened, 2) why, 3) how does it impact me, and 4) what are you doing about it?

The next logical phase is often the initial scrutiny and involvement of public and governmental agencies which are assuming their own roles as protectors of the public’s interests. Good crisis planning will take into account the need to work with and communicate with these agencies so that they can be allies and not adversaries in your response.

Phase 6 involves the real impacts of the crisis on your stakeholders rather than the feared impacts of phase two. These can include impacts on health, displacement from homes and places of business, safety, environmental pollution, loss of business continuity and more.

Phase 7 typically takes the form of intense media scrutiny and a thorough public examination of all your company’s past transgressions: other incidents, fines and penalties, past complaints from near neighbors or governmental agencies or environmental groups. During this phase you may expect the rehash of these past incidents and allegations to begin to color how media covers your current crisis.

Unless dealt with head-on, this intense scrutiny can have a debilitating effect on employee morale and customer loyalty, forcing those persons managing the crisis into a siege mentality that puts you in a weak, defensive posture.

Phase 8 involves aggressive damage control and the process of putting the crisis into a proper perspective (something the media often fails to do). Reaching out to key stakeholders and confronting misconceptions and misrepresentations head-on is central to turning the corner and moving your crisis from page 1 to page none.

Finally, phase 9 takes the form of a self-analysis: What went wrong and why? What signals were sent and ignored or misinterpreted? How can we improve our crisis training, planning and readiness? How deep is the reputational damage? And how can we begin the process of repairing our reputation and relationships with key stakeholders and the public?

This final phase may be among the most important of all since reputations are really built on performance and not just PR. Really learning your lessons and looking at the crisis from both the inside out and the outside in (from both your stakeholders’ points of view as well as your own) is key to making sure you’re better prepared and that the element of surprise (phase 1) result in a cascade of other phases which can cripple your operations and damage your business and professional reputations.

Making Risk Communication A Priority

At BMF, we spend a great deal of time helping our clients in the energy, manufacturing and shipping sectors prepare for, train for and respond to crisis: spills, pipeline leaks, ugly mergers and acquisitions, labor actions, industrial accidents and shipping incidents that can have multiple negative internal and external impacts and levels of liability.

But as important as effective and open communication in crisis may be, it is only one side of the communications coin. The other side-- equally as important but too often ignored—involves communicating effectively about risk—long before something bad actually happens.

In this document we’ll explore effective risk communication: engaging people openly and honestly about the risks of what your company does or makes, in ways that sincerely address their concerns or fears by giving them the information they need to draw educated conclusions that could ultimately make for a better relationship between you and your neighbors.

Simply defined, effective risk communication seeks to provide a proper context for the dangers posed to the public, calm fears and explain risks in honest, clear and reassuring terms that go far beyond made-for-media sound bites.

To be clear, risk communication is not the same thing as community relations and philanthropic giving. While these things may put a “human face” on your company and help make some people feel better about your company, they do little to mitigate lingering concerns about the health and safety risks of living and working next door to you.

At BMF we believe that effective risk communication is as much about listening as it is about talking. Experience has taught us at least one thing: concerned or angry neighbors and stakeholders are more than smart enough to know the difference between talking and listening.

Only by listening and really hearing what your neighbors and critics say about their fears regarding what you and how you do it can you truly find common ground beyond the fence line.

This process begins by accepting that people are very unlikely to: -
- accept things they don’t understand
- accept things or situations that are beyond their control
- accept things they believe are unfair
- accept things they derive no perceived benefit from
- accept situations they believe are forced upon them
- accept without anger or hostility things that are man-made instead of acts of God or nature

Effective risk communication is not achieved in one step or through limited on-again, off-again engagement. It is a process that takes real commitment and on-going outreach and accessibility. It takes thick skin and a willingness to hear things said in the kind of way you’re not accustomed to hearing from people who start from a fundamentally different perspective from you. And it takes the willingness to accept incremental change in your relationships with your stakeholders and neighbors over an extended period of time rather than the kind of sea change in attitudes all of us would like to see happen.

Good risk communication involves inviting those stakeholders who matter most to you inside your organization to meet your people and learn about your processes and your value to the community from the ground up. This learning process doesn’t just happen overnight but over a great deal of time.

Effective risk communication also entails being open minded to at least some of the changes your most important stakeholders want you to make. After all, it is totally unreasonable for you to expect to change their minds if you’re not open to changing yours.

We’ll flesh this concept out in more detail over the next few weeks. In the meantime, if you’re interested in exploring this subject in more detail, be sure to contact me at gbeuerman@e-bmf.com

Sad Times in Happy Valley

My original intent was to write at least three blogs about this unseemly and unfortunate issue, but as Monday passed to Tuesday and Tuesday to Wednesday (and so on), things happened so quickly that what I started the day before was no longer relevant.

In reality, that’s good news for Penn State and for a university that’s looking to put this mess behind them. The goal after all, for an institution in crisis is to seize control and move from page one to page none as fast as possible. And while the enormity of the scandal is still unfolding and will continue to for weeks to come, Penn State’s Board actions to fire President Graham Spanier and usher legendary coach Joe Paterno out the door, are a huge step in the right direction in restoring student, faculty, donor and media confidence in an educational institution that was on the verge of failing the ultimate test.

Malcolm Gladwell’s 2008 book, The Outliers, relates that in nearly every major airline accident approximately seven different signals are sent that trouble is on the horizon, nearly all of which are missed, dismissed or considered and ignored, resulting ultimately in a catastrophe.

The same can be said for the events at Penn State. How the university, its President, Athletic Director, legendary coach Joe (Joe Pa) Paterno and others responded to and handled rumors, reports and allegations all the way back to 2002, is shocking and disturbing and deserves to be considered here in real time.

Let’s take the key players one at a time.

Paterno

As a life-long Penn State and Joe Pa fan I’ve come full circle on Joe’s dismissal, from trying to make excuses for way Paterno failed to take decisive action based on what he learned nine years ago (instead of passing the buck and doing the absolute minimum), to the realization that he was dead weight on the school’s storied football program and needed to exit now, no matter how gracelessly such an exit might be.

As a professional communicator who helps corporate executives, politicians and others through their own tough times I analyzed Paterno’s November 8th statement announcing his resignation (effective at the end of the football season) and was struck by two important sentences: First, that the Board should not waste a single moment considering his fate—that he had made that decision for them and that they had more important things to do. While that statement could be read at least 2 different ways--that he was sincere in wanting to relieve them of that burden on the one hand, or that he alone was worthy of controlling his own destiny on the other. Sadly, I’ve concluded that an arrogance that is clearly typical of the university itself could only mean the latter.

The other statement in his announcement that gave me pause was his acknowledgement that in hindsight he should have done more. Clearly, Paterno knew more that he cared to and opted to shut his eyes to a sad, cold reality he’s rather never have known. In acknowledging that he “should have done more”, Paterno is clearly opening himself up to a lifetime of legal liability and lawsuits that will include endless depositions and even more public scrutiny. Still, he’s done the right and the only thing left to do by making such an admission.

But while Joe Pa certainly earned the right to call his own plays over 61 years of coaching, in his failure to follow up on such a heinous accusation as came to his attention years before, Paterno forfeited the right to determine his own destiny.

Last Tuesday afternoon’s, almost comical made for TV octogenarian auto chase scene featuring Joe Pa, slumped in the front seat of his Toyota Camry while his wife Sue weaved her way through crowds of reporters--starting, stopping, speeding up to avoid the media on their way to Paterno’s office at the stadium, put a bold exclamation mark on the entire craziness that came to epitomize Joe’s last days at Penn State. That imagery alone should have been more than enough to convince even the staunchest Penn Stater that the gig was up for Joe Pa.

Graham Spanier

While it is still possible, if not only natural to feel some degree of sympathy for Paterno, no such thing can be said for PSU President Graham Spanier who fostered and encouraged the all-pervasive air of power and arrogance that has come to define Penn State’s administration and athletic department.

Spanier’s almost immediate declaration of his unconditional support for Athletic Director Tim Curley and university Vice President Gary Schultz, who had just been charged with perjury and covering up the allegations against former defensive coordinator Sandusky, was the ultimate in stupidity, tinged with more than a hint of the invincibility the powers that be had created in Happy Valley.

Spanier got what he deserved. There’s a pretty good chance there’s more to come.

The University Board of Trustees

After getting a slow start out of the gate, paralyzed no doubt by too many sips of the university’s own Kool-Aid, the Board found the strength to take decisive action, ordering its own investigation into the scandal and sacking, in one fell swoop Spanier and Paterno, thereby giving the university and the unhappy denizens of Happy Valley at least a fighting chance to turn the corner and begin the process of rebuilding the university’s reputation and self-esteem.

The Board’s task now is to stay the course, undertake an exhaustive self-study and clean house from floor to ceiling of any and all who knew anything they failed to report or act on.

Make no mistake: this scandal isn’t about football or even about Joe Pa. It’s about sexual abuse of children, violating the law in the most egregious of ways, and institutional arrogance and absolute power that corrupts absolutely and cowers everyone who gets in the way or dares to question those in charge. It’s about cover-ups that many people seem to have engaged in for nearly a decade, blind or oblivious to the distinct fact that the truth never dies.

Clearly, Jerry Sandusky is sick. But so is Penn State at the highest levels of the administration and athletic department. Such overwhelming power as the university has amassed can’t help but breed arrogance, and with that arrogance comes a false believe in invincibility. Still, the mighty have begun to fall and they will continue to do so until the university faces reality. Lip service, blue and white anti-child abuse ribbons at football games and half-hearted actions simply won’t cut it when trying to repair the immense reputational damage done to Penn State or to the lives of dozens of scarred young men who have suffered emotionally for years while the Nittany Lions played on.

Joe Pa was and is a legend. Over 61 years as a coach he’s rightly earned a reputation as a teacher and molder of young men. Now’s the time for Joe Paterno to dig deep and with great humility and sincerity teach the ultimate lesson: That actions—and inactions-- have consequences. That real men accept responsibility for what they’ve done and haven’t done. And that no one is above the law or too important or legendary to be held accountable for their deeds or lapses of judgment.

Joe Pa still has some teaching to do. And some tough life lessons to teach himself in the process.

This is more of a rant than a blog-something I swore I'd never do.

But as a voter, and as a media professional, I can't help but be disappointed and angry about the campaign conduct of most of the recent candidates for the various judicial seats in the City of New Orleans. Campaigning for offices such as Civil District Court without an ounce of civility is the absolute height of hypocrisy. Sitting judges as cartoon characters? Seriously? Unseemly, untrue and totally contrived allegations about failure to pay child support (that are so far off base that a local court orders them pulled off the air in record time)? Really? And you want to be a judge?

While the political consultants can be somewhat excused for slinging such mud (taht's what they after all) there is no excuse for someone seeking a judgeship to stoop so low. What could possibly qualify someone with no sense of propriety or dignity to feel even remotely qualified to judge anyone else?

Surely being a judge is more about you than about your opponent. After all, once you win, the only thing relevant is your behavior and demeanor, not your former opponent's.

If there's ever an argument in favor of an appointed judiciary, those candidates who spent millions of dollars to tear each other (and their families) apart have become the new poster children for a comprehensive change in how we put people on the bench. Such behavior is a sad commentary on the integrity of far too many of the great legal minds who seek to judge the rest of us in court.

Business continuity planning: the ultimate business and reputational insurance policy

The recent and extensive business interruptions caused by Hurricane Irene up and down the US East Coast, and the upcoming anniversary of the tragic attacks on New York’s Twin Towers should be all the reminder anyone requires that every business needs some form of business continuity and disaster recovery planning.

While not every business has the same level of exposure or the same risks to its operations or profitability, every business owner owes it to him / herself and their employees, investors, bankers, customers and vendors to conduct a comprehensive analysis of those risks and to plan accordingly for the unexpected.

That’s where a credible, culturally adapted business continuity plan comes in, coupled with a disaster recovery plan for putting the pieces back together after the storm has passed.

To be sure, a business continuity plan (BCP) isn’t the same thing as a crisis communications plan, although communicating during and after a crisis is a central element of a good BCP. A good BCP is comprised of several other key elements including:

- A candid assessment of operations, health, safety and financial risks
- A review of your organization’s communications culture, structure and capabilities
- A prioritization of who is most important to engage and mobilize first, both inside and outside your company (employees, vendors, bankers, investors, suppliers, etc)
- A complete and up-to-date inventory of your workforce including after-hours contact information, home addresses and home and cellular telephone numbers, personal email addresses, family contact information, etc)
- An up-to-date listing of employee evacuation locations to and how they could be reached in the event of an emergency which forced them from home quickly
- A pre-established communications portal such as a “dark” website or toll free telephone line staffed 24-hours a day after activation which can be used by employees to report through and to get important messages from the company
- Off-site servers and data storage capabilities
- Multiple pre-established out-of-town sites (with very specific detail) where key company personal can muster and meet to evaluate risk, damage and loss and communicate quickly and seamlessly with their key internal and external stakeholders
- Laminated wallet sized cards containing this key information to be kept by each employee in their cars and homes should they have to quickly seek refuge elsewhere
- Up-to-date 24-hour contact information for key suppliers, brokers, customers, legal counsel, insurers, bankers, and vendors (most third-parties such as these will be well pleased and surprised that your company is giving this kind of attention and detail to business continuity planning. You may especially earn points with your insurer and bankers)
- Pre-approved written messages for communicating with your key stakeholders as a crisis or forced evacuation is approaching or throughout and after the crisis passes
- A “coming home” or “cascade” protocol that mobilizes key personnel first after the incident or business interruption has passed in order to evaluate damage and chart a realistic course of action for the company
- A pre-determination (to be conducted with your labor lawyers and benefits advisors) of what you’ll be able / willing to offer your displaced employees under a variety of crisis circumstances. (Employers in crisis often find that uncertainty regarding payroll and benefits issues are the single most vexing and problematic issues and sources of discontent for their employees and can lead to lingering employee morale, legal and retention challenges)
- Options for reducing overhead should the crisis or business interruption linger longer than expected

Clearly, these aren’t things you can scribble on the back of a napkin as the storm clouds are rolling in.

Developing a functional, reality-based BCP can best be done through a cooperative effort of key internal personnel and an outside consultant who can look at your organization, your operations, risks and corporate culture with a clear, objective eye. Between the insider’s view and the more objective and experienced outside perspective business owners are far more likely to get a workable plan than taking just one course of action or another.

Over and above giving you as a business owner or manager the peace of mind you need to face any business interruption with the least amount of stress and economic risk, developing a business continuity plan gives your employees and other key stakeholders the signal that you’re looking out for their best interests as well. That fact alone sets you apart from other prospective employers or competitors who may seek to take advantage of your bad fortune.

Recent crisis response efforts demonstrate value of social media as real-time communications tools

For more than a year BMF has been preaching to our clients that social media has a meaningful place in their crisis communications tool chests. While some clients have taken the hint and allowed us to insert a social media component into their crisis comms plans and protocols (Twitter and Facebook), others have proven resistant to the idea or slower off the mark.

Three recent but very different crisis response efforts have served to prove our point and demonstrate the potential value of these social media tools as a forum for quick, real-time communication of key facts in the aftermath of an incident.

During July, ExxonMobil effectively used Twitter to reach reporters, environmentalists, property owners, regulators and others with the latest facts regarding their Yellowstone, Montana pipeline oil spill. While social media isn't enough by itself to soothe the savage beast that is an angry public, it can go a long way toward mitigating what is always the biggest complaint among stakeholders: "They won't tell me anything!"

ExxonMobil issued frequent fact-based Tweets to announce press conferences, deployment of resources and spill clean-up milestones and more. Hats off to them for stepping out and using social media to do more than peddle a product or post job openings.

Likewise, Shell gets credit for using Twitter to provide basic information and milestones in their response to a recent small spill in the North Sea.

The early August Indiana State Fair tragedy that killed 7 fair-goers and injured dozens more also served to demonstrate how social media can be effectively used and help skirt the traditional gridlock caused by endless rounds of rangling with attorneys over how to word even the most simple of media statements.

Two local hospitals quickly activated Facebook and Twitter communications plans to provide family members, well-wishers and the media with details regarding the incident and to help refute rumors that were spiraling out of control. Sample posts and Tweets included instructions on how to check in at the Red Cross Safe and Well website, how to donate blood or find missing loved ones, how to show support and appreciation for the medical teams that were quickly overwhelmed with injured parties and their worried family members, and how grieving persons could access free counseling services.

Fair organizers even went one better, setting up a YouTube channel to post all press conferences and media interviews to provide the most comprehensive of communications platforms.

Ginning up this kind of social media program doesn't just happen in the blink of an eye. To be launched and used effectively it has to be part of an organization's crisis communications plan and protocol and must be more than just an afterthought.

The way we get our news is changing (just ask the Pakistani neighbor who Tweeted the world about the raid on bin Laden's compound hours before the media knew it). The future of timely and effective crisis communications is here now as the demand for real time information in our era of 24-hour news cycles and TV talking heads raises the stakes. Ready or not, it's time to get in the game.

BMF's New Rules for Protecting Corporate Reputations

Here are BMF's "new rules for protecting corporate reputations." We'd love to know yours.

1. Corporate reputations are destroyed far more quickly than they are built. Rebuilding a badly damaged corporate reputation takes twice as much time as it took to build it the first time around.

2. Ultimately, reputation is rooted in performance, not PR. The best PR in the world can't make shoddy performance look good.

3. 90% of all crises don't just happen. There are warning signs and precursors that are too often ignored or glossed over.

4. More crises are the result of something someone didn't do, than the result of something someone did.

5. Aggressive people don't care what you say until you listen to them first. They're smart enough to know the difference between being "talked to" and being "talked with."

6. There's a huge difference between saying "I'm sorry" and saying "I did it."

7. People look beyond your actions to the values and motivations behind those actions.

8. No one wins the blame game.

9. Tell the whole story as quickly as possible. Don't prolong the story by rolling it out chapter by chapter.

10. Out of town companies have no rights. The deck is stacked in favor of media and locals who feel they have been harmed or impacted.

11. There are no secrets. Eventually, lawyers and the media will know all and tell all.

12. It doesn't have to be your fault to be your problem!