This year has been a banner one for PR crises. But if you’re at BP, Apple or HP, you probably won’t be celebrating. Yet hopefully executives at these companies will be reviewing their actions and discovering valuable lessons learned. But, realistically, will they?
With all the talk about how companies act during a particular crisis, what happens after the fact? How diligent are organizations in analyzing their crisis efforts and measuring the effects of a crisis? According to one crisis expert, not as diligent as one might think.
“Organizations want to put a crisis behind them, and many of them stick their heads in the sand after the fact,” says Bill Dalbec, senior VP of APCO Insight, a group within APCO Worldwide.
“It’s not about ‘how could we have communicated better’ during the crisis,” says Dalbec. Serious post-crisis reflections should be about making needed changes in the organization that will prevent something like it from happening in the future, he says.
Harlan Loeb, U.S. director of Edelman’s Issues & Crisis group, agrees with Dalbec’s post-crisis goal—it’s an opportunity for change. “Companies that do a crisis postmortem have a great opportunity to say, ‘We’ve reached the nadir and we need to do a complete reset,’” says Loeb.
RISKY BUSINESS
To help with a reset, says Loeb, organizations should explore an area in which many still don’t tread: risk management. An organization’s reputation—one metric that top leaders look at closely—is tightly tied to risk management principles. “Competitive, operational or technical issues, which are key factors in risk management, all can affect reputation,” says Loeb. “And you can’t commoditize risk management. It has to be strategically embedded everywhere in an organization.” (See sidebar for key risk management principles.)
TAKING MEASURES
While organizations need to seize opportunities post-crisis, there has to be some quantifiable data that can help assess the damage done. Dalbec says that a couple of measures are key: reputational metrics, “how people feel about you”; and financial metrics, meaning stock price or a drop-off in donations, and how long it takes an organization to return to the same financial levels as before.
Dalbec puts a great focus on the reputational aspect with his clients. “How much has your brand equity taken a hit?” he asks. “Brand equity is your currency, and you have to spend some of it to get it back.” Thus, a key post-crisis strategy in Dalbec’s arsenal is to amass qualitative data by talking to key stakeholders.
It’s a strategy that the American Red Cross used shortly after its Liberty Fund crisis just after 9/11. After the terrorist attacks, the organization had collected nearly $600 million in donations, which the public thought would go to people affected by the attacks. A plan to steer more than $200 million dollars of the fund toward preventing future attacks and for improving the Red Cross’ readiness (a new phone system was proposed) set off a public firestorm.
“So, afterwards the Red Cross spoke to donors and found out that the public had no idea how the Red Cross collected funds after large-scale disasters,” says Dalbec. The result? The organization established Donor Direct, a program in which donors can stipulate where their money can be spent.
DETAILS, DETAILS
The gold standard of a rigorous post-crisis analysis, says Loeb is the military model of risk analysis. “You see this process within highly regarded militaries around the world,” he says. “Even in conflicts that aren’t prosecuted well, there is always a postmortem, a detailed look at what happened from every stakeholder’s perspective.”
This military mind-set is utilized by Royal Caribbean Cruises, says Cynthia Martinez, manager of corporate communications at Royal Caribbean. “We have many people here that were in the military or the government,” says Martinez. “Whenever there’s an incident, we do an ‘after-action.’” It’s a process that involves all areas of the company.
An after-action was done after Royal Caribbean’s Haiti crisis, when, after the devastating earthquake, the cruise line decided to continue docking its ships in Labadee, a port 100 miles away from Port-au-Prince. The company was widely criticized for the decision.
“We start off with a situational overview to make sure everyone is on the same page,” says Martinez. “Then we identify three things that worked during the crisis, and three things that didn’t work.”
One positive from the Haiti incident, continues Martinez, was that the communication with passengers worked well. One negative: An initial decision was made to make a big push in explaining to the public why ships were going to Labadee.
Later, it was decided to let the story play itself out. “In the after-action, we concluded that the outreach should have continued,” says Martinez.
A detailed post-crisis analysis was critical to Evansville, Ind.-based energy company Vectren Corp., which faced a crisis following an ice storm last year that paralyzed parts of Indiana and Kentucky. To Chase Kelley, director of corporate communications at Vectren, documentation of all actions during the crisis was key. “As a result, we’re making improvements to the process, including adding Twitter and texting to our outage management system,” says Kelley.
Ultimately, performing a postmortem on a crisis helps an organization on a number of fronts, says Loeb, including:
• Helps discover which departments aren’t communicating with each other
• Uncovers executives who might not be media-trained effectively
• For global companies, cultural differences may be uncovered. “ Toyota is a good example of a cultural breakdown,” says Loeb.
• Encourages creative thinking. “People have come up with really good things postmortem,” says Loeb.
And public relations is key in the postmortem process: “If you look at strategy at one end and execution on the other, the gap between them is almost always communication,” says Loeb. PRN
CONTACT:
Bill Dalbec, [email protected]; Harlan Loeb, [email protected]; Chase Kelley, [email protected]; Cynthia Martinez, [email protected]; Mark Layton, [email protected].
A Crisis ‘Pre-Mortem’ Could Help Prevent a Postmortem
If your company has suffered a crisis, a postmortem is an essential part of the recovery process. But according to Mark Layton, global enterprise risk services leader at Deloitte Touche Tohmatsu Limited, this same exercise, conducted before an adverse event, can be more valuable. “It’s imperative that the key executives periodically get together to discuss risk and strategy,” says Layton. Here are six of Deloitte’s risk intelligence principles:
1. There is a common definition of risk that is used consistently throughout the organization.
2. A common risk framework, supported by appropriate standards, is used throughout the organization to manage risks.
3. Key roles, responsibilities and authority relating to risk management are clearly defined and delineated within the organization.
4. A common risk management infrastructure is used to support the business units and functions in the performance of their risk responsibilities.
5. Governing bodies (e.g., boards, audit committees, etc.) have appropriate transparency and visibility into the organization’s risk management practices to discharge their responsibilities.
6. Executive management is charged with primary responsibility for designing, implementing and maintaining an effective risk program.