Natural disasters. Confrontations with clients or rivals. Crime. Massive oil spills. Organizational misdeeds. Workplace violence. Splintered business relations. And yes, sex scandals.
These are what the business world refers to as crises.
Such crises can arise at any time and are at the heart of the public relations messes that in the past week or so have besieged military and aerospace giant Lockheed Martin of Bethesda, The New York Times, the BBC, the CIA and the Pentagon. If handled ineptly, such crises can have serious long-term consequences: lost time, money, customers, jobs or brand.
Numerous Maryland companies have developed specialized public relations services devoted to helping clients manage these crises, particularly when it comes to disseminating information to the public. These firms face the challenge of breaking companies of the typical knee-jerk reaction to stay quiet and hope everything just blows over.
“Crisis communication is not about sweeping your mistakes under the rug. It’s about absolving the situation, assuming accountability, confronting the crisis and owning the public message,” said Henry Fawell of Campfire Communications in Annapolis. “What I tell clients is you can have two weeks of bad press or two months.”
Fawell was press secretary to then-Gov. Robert L. Ehrlich Jr. (R).
“The natural way of thinking during a crisis is that nothing you say is even going to be heard amid the noise,” said Aileen Pincus, owner of the Pincus Group, a Washington, D.C., firm with an office in Silver Spring and several Maryland clients, including John Hopkins University.
She said the essential task of a crisis communication firm is to make clients understand they can’t wait to talk to the public.
“If you don’t tell your story, someone else will. And it won’t be the story you want to tell,” said Robert Weinhold, principal of Fallston Group in Bel Air.
All crisis communication firms emphasize that businesses must make themselves immediately available and transparent in a crisis and provide regular updates as more information becomes available.
“The hope is that you can get bad news out quickly and get it behind you. But you may not know all the bad news right away, so it’s important to let people know when you know it,” said Peter V. Stanton, president and CEO of Stanton Communications, a Washington firm with an office in Baltimore.
Stanton’s clients include electric utility parent Pepco Holdings, the Maryland Office of Tourism and Vertis Communications in Baltimore.
A typical hurdle businesses face when it comes to managing crisis communication is relying on a public relations firm that is ill-equipped to handle crisis situations, Pincus said. She said it’s crucial to prepare in advance by auditing resources, identifying potential crisis points, and training management and employees to react properly.
Stanton also advised structuring a company’s crisis management plan so that people can make decisions in a hurry and authorize actions without delay.
“You need to move quickly,” he said.
Vitamin of Baltimore particularly relies on its small team of seven to help businesses respond to crises as soon as possible, spokeswoman Natalie Barg wrote in an email to The Gazette.
3D Communications in Washington, D.C., conducts training sessions for its clients, including those in Maryland’s biotechnology and military sectors, owner Cindy DiBiasi wrote in an email to The Gazette.
Utilities face some of the stiffest challenges when it comes to dealing with the public during a crisis.
“Customers don’t understand how a utility works,” said Miki Deric, a partner with Davies Consulting in Chevy Chase, which also works with Pepco on crisis communication. “Just as if you walk into a McDonald’s, you expect to receive a burger if you order one, you expect a light to turn on when you flip a switch. You have to educate the public on how the grid works.”
He said prioritizing responses and building a community relationship are key to a utility’s crisis management.
High marks for Lockheed
Crisis communication businesses have had several key case studies to examine lately, with most agreeing that Lockheed Martin has made the most inroads in weathering its crisis, while the BBC has fared poorly.
Lockheed faced the court of public — and investor — opinion after its intended CEO, president and COO Christopher E. Kubasik, was forced to resign last week due a close relationship with a subordinate employee. An employee had tipped off Lockheed in late October, prompting the company to hire an independent outside law firm to investigate.
Current CEO Robert J. Stevens announced the resignation and emphasized that it had not affected Lockheed’s operations or financial activity.
“They took initiative and owned the message to the greatest extent possible,” Fawell said. “It was the right balance between transparency about the present and confidence about the future.”
Stanton agreed that Lockheed did all the right things.
On the other hand, crisis communication firms have pointed to the BBC’s handling of its crisis as ineffective.
The British media company’s crisis began after its “BBC Newsnight” report falsely linked a Conservative politician with pedophile activity. Previously, the BBC had been dealing with an investigation regarding claims that deceased BBC music personality Jimmy Saville had sexually abused girls. Further complicating the situation is The New York Times’ recent decision — before the BBC scandals unraveled — to hire former BBC director general Mark Thompson as its new CEO; he started this week.
“The BBC case is so ironic and unbelievable because it’s a news agency making all of the classic mistakes of crisis communications,” DiBiasi said. She said the BBC had made matters worse by telling its reporters not to send online messages about the issues.
“If you made that up in crisis communications role play, clients would tell you that it wasn’t realistic enough — except that it is,” she said.
Media companies often get caught off guard because they think they’re experts and therefore don’t need crisis communications training, Pincus said.
Stanton questioned the BBC’s strategy of “clean house,” with the resignation of Director General George Entwistle and other upper management.
“Those in position to communicate may have found themselves leaderless,” he said.
DiBiasi said the Times also has shown a weak response to the situation, instead of “taking the lead and being upfront about the story.”
“The good news is that they’re not telling their reporters to ignore it — at least not yet,” she said.
As for another example of bungling, Weinhold pointed to how Penn State officials responded to the pedophile scandal involving former football coach Jerry Sandusky. University officials were lambasted by accusations of covering up, and indeed some have been criminally charged.
“It takes 20 years to build a reputation and five minutes to lose it,” he said.
As to whether it’s possible to manage a crisis without firing people, crisis communications firms say it depends on the level of crisis and whether the person involved in the crisis is the person to resolve it.
“Offering up someone’s head is not always the way to answer that,” Pincus said
Fawell said organizations also must balance all aspects of business and operations when it comes to firing people in a crisis.
“Too often, legal liability is sacrificed at the expense of public perspective,” he said.
A company that handles a crisis well can get a significant boost in public opinion, businesses say.
Stanton referred to how Johnson & Johnson responded in 1982 when people died after taking cyanide-laced Tylenol. After realizing it was losing its profitable brand, the company bucked the federal government’s order and told customers what it knew and how it was investigating. The company’s market value fell by $1 billion, but the product remains a staple in the industry, Stanton said.
“Anyone can lead while times are good, true leaders emerge during the most critical times of need ... they know how to turn adversity into advantage,” Weinhold said.
Tips for handling crisis communication
Before a crisis:
Define what is and is not a crisis. A crisis is something that interrupts normal protocols.
Identify specific scenarios and develop response strategies. Structure for making decisions in a hurry and getting them authorized.
Have a crisis communication plan with a checklist.
Understand your available resources. Find out what a business' existing PR partner is equipped to handle.
Build reputation capital through community and social media involvement.
During a crisis:
Don't expect the crisis to just blow over on its own. Companies don't gain anything by hunkering down and saying nothing.
Be transparent and available. Never say, “No comment.”
Make sure the company’s spokesmen are high-level and have them media-trained well in advance.
Let people know what the company knows when it knows it and provide a mechanism for further updates. Verify information.
Let people know the steps the company is taking to address the crisis and how it will move forward.
Even when the company has no news, make sure the spokesmen talk to the media on a regular basis.
Set up listening posts so the company knows what is being said about it.
Sources: maryland crisis communication experts