When a patient died during a clinical trial last year, Targeted Genetics, a publicly traded biotech company based in Seattle, found itself in a tailspin as it dealt with a
flurry of negative media attention, scrutiny from industry groups and a huge drop in stock price.
"We were one of those companies that said we were going to put an internal crisis management in plan in place as soon as we do X, Y or Z, and we really didn't have a formal
plan in place [when the crisis hit]," says company CEO H. Stewart Parker.
Although Parker was pleased with her company's ability to navigate these troubled waters, she urged executives at the National Investor Relations Institute (NIRI) conference in
San Diego this month to understand the importance of formulating a crisis communications plan.
As the moderator of a panel focused on the role IR must play in a crisis, Monique Greer of Weiscomm Partners stressed that every company is vulnerable to a crisis and,
especially in our world of instant communication, all companies are susceptible. Thus, developing a crisis communications plan must be top of mind for all communications
executives.
Jim Lucas of the Abernathy McGregor Group (he was also a member of the NIRI crisis panel) says that "crisis communications is pure art" and that it's about finding the balance
between "the stuff that the lawyers worry about and what it takes to keep the business going and to preserve it." Lucas says that the No. 1 priority when dealing with a crisis is
to "maintain management's credibility--it's the basis for leadership, selling and recovery."
In addition to this, corporate communicators should embrace the following seven suggestions for managing a crisis:
*Rely on a preformulated crisis communications plan.Although a crisis situation is never a pleasant ride, it's much easier to manage if there is a predetermined plan in place
that allows for quick internal mobilization (for more on building a crisis plan, see "Crisis Plans: Take Control With Speed and Compassion," page 1).
"Your crisis communications plan is really a work plan, not a blueprint or road map," Lucas says. "It's a set of practices and procedures to create consensus."
In addition to the traditional aspects of a crisis plan, such as an assessment of your company's vulnerabilities and risks, and an agreement on your communications objectives,
the plan should include basics that are often forgotten, including logistical information (for instance, the names of the crisis team members and their backups, and instructions
for how to update the company Web site, send out a press release or set up an investor call).
*Segment your audience to strengthen messaging.Although your crisis communications plan will call for consistency, it's also essential to recognize that different constituency
groups have different needs and will demand different information about the situation. In a crisis situation, Lucas emphasizes that customers and employees usually matter the most
because without them, there is no business.
"There are two groups that make a lot of noise, but they cannot save you even though they are calling for a lot of your attention--that is, media and investors," he says.
Your crisis communications team must understand these audience nuances beforehand and should develop customized messaging to reach all groups in an effective manner that best
supports the resolution of the crisis. However, in doing this, consistency is still paramount as constituency groups often overlap and share information. It's important to
recognize that employees might be shareholders, suppliers could be future business partners and the groups you thought were your best advocates could quickly become your strongest
critics.
*Treat all media equally.Consistency and accuracy in communications is especially important given the fact that in today's world, anyone and everyone can be a reporter.
When dealing with its crisis, Targeted Genetics had to defend itself from strong criticism and from inaccurate comments posted on blogs. Parker explains that "blogs write
whatever they want to write, and you can respond and they may or may not print your response, so it's a real tough battle to fight."
Local and small media can also have a global impact due to Web presence. Take, for example, Taco Bell's rat infestation in a Manhattan restaurant, the Rev. Jeremiah Wright
scandal and the events leading up to Dan Rather's early departure from CBS, all of which were broken by local media and bloggers. It's important to recognize that a story in your
community newspaper can escalate just as quickly as something posted on CNN.com.
*Keep communications a team effort. Although the entire corporate team must be active in crisis communications, different internal departments are better positioned to manage
various constituency groups.
For example, Lucas says, "In a crisis, investor relations should be out holding hands with the largest shareholders, listening to their concerns and communicating them actively
to senior management."
In this case, it's important to understand that IR serves as the liaison between investors and management in a crisis situation; thus, the function is in the best position to
understand the voice of the shareholders. Allowing various internal departments to focus on the aspects of the business they know best enhances the overall communications effort
and enables it to be more efficient, credible and customized to each audience group, while still maintaining uniformity with the overall company message.
*Leverage your time in the spotlight. Although getting to the bottom of the issue at hand and coming to a quick solution should be your top priorities in a crisis situation,
it's important to use the media attention strategically.
Parker says that Targeted Genetics tried to take advantage of its time in the media spotlight to educate the general public not only about what the company does but also about
the risks and benefits associated with the clinical trial process that all biotech companies must comply with. Although crises can ruin corporate reputations, they can also
strengthen those companies that respond openly and honestly.
*Accept that you might still be considered guilty, even after proven innocent. You must expect that the resolution of your crisis will not provoke the same type of press
coverage as the initial announcement of the crisis. Parker says that executives must understand this is simply a "reality of how we communicate these days and what the public is
interested in from a media standpoint." In this vein, companies must recognize that crisis situations likely will have a long-term effect on not just stock price, but also on
overall corporate reputation and stakeholder relationships.
*Maintain a composed attitude at all times. The constant stress of dealing with a crisis situation can get to even the most unflappable executive. It's mandatory that corporate
communicators are able remain composed and not be tempted to jump into the circus that is likely to envelope them in a crisis.
Based on her experiences, Parker says, "If you've never been through something like this and you think, 'I'm ethical and moral, people generally like me, and I feel like I'm
doing good work,' well, make sure that you have a dog that loves you, because the reaction is brutal and personal in every way." PRN
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This article was written by Jennifer Farrelly, a researcher at the Tuck School of Business at Dartmouth College. She can be reached at [email protected]