“We’ve never had any issues before.”
“We can just react on the day.”
“It just won’t happen to us.”
No matter the scale, reach or purpose of your business, no one is immune to things going wrong. In 2010, Oxford Metrica estimated that executives have an 82% likelihood of facing a corporate crisis in any five-year period– a 10% increase on ten years before. With consistently increasing social media use, combined with the rise of active consumerism and the 24-hour news cycle – not to mention the media’s thirst for developing scandals – the chance of even the smallest issue escalating into a communication crisis is higher than ever, and only those ready to deal with them will be able to weather the storm.
Reputation is the most valuable asset your company owns. Without it, how can you survive, let alone grow and succeed? According to a report compiled by the World Economic Forum, 25% of a company’s market value is directly related to its reputation. That value is likely to be even higher in today’s connected and opinion-driven world. But, as billionaire businessman Warren Buffett surmises, “It takes 20 years to build a reputation and five minutes to ruin it”.
No one remembers the details of a crisis, but they do remember how a company has behaved. A poorly managed issue or a moment of miscommunication can see trust, and therefore value, evaporate overnight. This can have impact on a number of levels– investors can lose confidence in your brand, new recruits may look elsewhere, staff morale and productivity can drop and even the most loyal of customers can become hesitant.
This all sounds very doom and gloom. However, it is absolutely vital that business owners and C-suite executives understand what is at stake when they put crisis comms at the bottom of the priority list. As the old saying goes, there’s no use closing the stable door after the horse has bolted. A crisis can be minimised, even avoided, with a little pre-thought and preparation. Research conducted by Marsh Consulting estimates that every $1 invested in crisis management returns $7 in averted costs.
A crisis can also present a unique opportunity for some positive brand reinforcement, allowing you to showcase your company’s values to your employees, customers and the wider market and boosting integrity and leading to better sales, increased market-share and stronger market position.
But you’ll only get a chance to do this if you are properly prepared.
As my English teacher used to say, “fail to prepare, prepare to fail”. When a crisis is on the horizon, you don’t want to be left dithering about your next steps. Silence or disjointed communication implies guilt and won’t be forgiven easily. Outrightly denying any responsibility or, worse, pointing the blame elsewhere looks weak and culpable (even if it is true). You need a plan of action.
Obviously, it is impossible to predict every possible risk. Even if you did, there’s no guarantee that things will play out as you imagine. However, having a template crisis management process that outlines the roles of the crisis comms team, puts policy in to action, guides your initial response and next steps, and has been effectively communicated to all relevant parties will make sure you’re not only ready to do the right thing, but you and your team have the confidence to carry it out.
This is particularly vital for senior management. As crisis comms specialist Adrian Wheeler writes “whatever else a company does or doesn’t do to prepare itself for a crisis, equipping the spokesperson (and it must be the CEO) is mandatory.” These are the people who end up centre stage when a crisis hits, as the business looks to them for direction and the media look for answers. One wrong move and things can go from bad to worse. But stepping forward with a strong, honest and, above all, human response that expresses regret for the impact on the people involved and resolves to put it right will help to address stakeholder concerns and protect your brand’s reputation.
A crisis comms plan is the umbrella in your bag. You might not need it but, if the grey clouds start rolling in, you’ll wish you had it to hand. The rules of communicating in a crisis are simple but doing it effectively can be challenging. Investing in a robust plan of action and pre-prepared materials can help to ensure you move forward with compassion, efficiency and your reputation intact.
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