An increasing number of senior-level managers are taking crisis management to a new level, assigning daily responsibilities for staving off potential crises and implementing a sort of triage of well-defined PR and marketing roles in case a crisis hits, according to a new survey.
Among the most telling conclusions of "The Second Annual Crisis Management Survey of the Fortune 1000" was a "peak in senior management's view of crisis management importance." In essence, 86 percent of the respondents said they consider crisis management very important. That result represents an 11 percent jump over last year's finding, which was 75 percent.
The study is based on responses from executives from more than 100 Fortune 1000 companies. It was a joint effort of the Washington, D.C.-based crisis management firm The Corporate Response Group Inc. (CRG) and George Washington University's Institute for Crisis and Disaster Management. In addition to the finding about senior managers, the study revealed that:
- 86 percent of companies are assigning daily responsibilities for crisis management - up from 80 percent last year;
- 62 percent of CEOs are involved in crisis management (this was a new question this year);
- 43 percent of companies battling crises, up from 22 percent last year, reported an increase in multi-level incidents - those that affect the facility and business unit levels as well as corporate headquarters; and
- 74 percent perform self-audits, with 46 percent using a checklist method, 16 percent using a qualitative scoring system and 20 percent using both methods.
"What we're finding is that in the last three to five years, corporations have made a shift to being more proactive, than reactive, when it comes to handling crises," said Ernest Del Bueno, senior associate with CRG.
"Years ago if you had an incident, for instance an accident or disaster, it was generally handled at the facility level. But that point of view has shifted over the years and now crises are seen as something that affects the corporation overall because it brings into play all kinds of audiences: investors, environmentalists, the community, the press, employees, families and labor groups."
For those in PR, providing counsel on how to handle - or even prevent - a crisis has become part of the fabric of good corporate communication strategies. It's no longer just good business to have a sound crisis plan - it's bad business if you don't.
Greg Rossiter, managing director of PR for Memphis-based FedEx, should know. Last year, he and other PR practitioners at Fedex, which employs 127,000 people, took a long, hard look at how the company handles crises.
And it was introspection that also required Fedex's longtime outside PR agency, New York-based Ketchum PR, to sidle up to the conference table and help Fedex revamp its crisis lans. "For us, it wasn't so much coming up with a drill, but rather knowing where we stand on particular issues so if something erupts, we have some background and a head start," Rossiter said.
Prior to coming up with what is now a very lengthy, multi-faceted plan (based on a litany of possible scenarios and action plans), Rossiter said Fedex basically took an "ad hoc" approach.
In fact, PR NEWS sources concede that was an acceptable business practice before those in the press and the public began to focus more on corporate accidents and incidents and - more recently - on administrative and personnel issues along the lines of last year's Texaco fiasco.
Because of that, Tom Gable, chairman of San Diego-based The Gable Group, said more and more of his clients are seeking input for their crisis plans and looking for strategic counsel. In fact, one of Gable's clients, Travel-odge, owned by HFS Inc. in Parsip-pany, N.J., pays The Gable Group an undisclosed amount of mon-ey to guarantee a 24-hour hot-line to reach Gable executives so crisis advice is always available.
"We try to develop plans for managers that mean they will never be surprised that something could happen," Gable said. "We want to plan for different scenarios so that the panic element is taken out of it. And we know that the key element is getting information out to people in a timely manner."
On another front, Jim Caudill, vice president of PR for Santa Rosa, Calif.-based Kendall Jackson, said his employer's previous crisis approach was managed on a "case-by-case" basis. It's a standard, however, that Jackson said leaders at the 1,000-person company now realize isn't progressive enough.
"We will have a formal plan in place by the end of the year," said Caudill, who added that the plan will be tightly-focused and will incorporate not only the typical who-to-call-if-this-happens rundown but also the company's business philosophies.
Part of what has prompted Kendall Jackson to devise an in-depth crisis plan is linked to the brushes it already has had in the crisis arena in California - including several traffic accidents involving company trucks and an increased focus from environmental groups questioning the company's plans for new vineyards.
"[But] what has happened in crisis management, unfortunately, is that these plans have become institutionalized drills that have become so routine they amount to just going through the motions," Caudill mused. "And you wonder why companies continue to make the same mistakes when there are so many [publicized] shared experiences to draw from."
Caudill said part of where he thinks the flaws lie in crisis plans is that businesses have in writing who the contact people are; meet regularly to overhaul and update plans; and have secretaries charged with checking to make sure phone numbers, names and e-mail addresses are current, but they don't have a sense of how workable their plans are.
"When a company like Chevron works on a drill for an oil spill, their rehearsal means launching ships [sent for clean-up purposes] and sending out helicopters," Caudill said. "But I think a small percentage of companies, less than 10 percent, actually do that today because that's something that costs a lot."
Caudill also pointed out that the costs of crisis management plans vary substantially. They can entail having an outside agency audit a company's approach and create a blow-by-blow plan for about $25,000, to a mega corporation like Chevron and Exxon spending "millions of dollars" to make sure their plans work.
"It's one thing to intellectualize, to say this is a bottomline issue, and another thing entirely to devote the funds to a sound plan. Sometimes dealing with a crisis becomes a dollar kind of cost that gets picked off first," Caudill added.
(Ernest Del Bueno, 202/775-0177; Greg Rossiter, 901/395-4440; Tom Gable, 619/234-1300; Jim Caudill, 707/525-6229)