International Total Services, the second-largest airport security firm in the country, got the ultimate lesson in crisis management this September. On the very day the
Cleveland-based firm had planned to file for Chapter 11 bankruptcy protection in a New York court, a now infamous terrorist plan unfolded in airports up and down the East
Coast.
ITS's previous management had piled up debt through acquisitions, and the new leadership team had decided Chapter 11 was the best route to reorganization and long-term health.
Kathy Obert, CEO of the company's PR firm, Edward Howard & Co., was sitting in the ITS offices the morning of Sept. 11, prepared for the bankruptcy action to begin. But when
news of the terrorist attacks began to roll in instead, she knew she would have to think fast to manage the two crises simultaneously.
The Goals
Obert's team had two goals prior to Sept. 11: convince employees that their jobs were safe, and assure clients that the firm would continue to do business as usual. But the
terror attacks made business as usual impossible.
"We are a sleepy little industry, and suddenly there was this veritable onslaught of media interest," says ITS CEO Mark Thompson. "As a thinly staffed company we had a great
need for assistance in filtering media inquiries and preparing responses."
At the same time, the initial goals relating to the bankruptcy still remained. "If you thought employee communications was important before Sept. 11, if you wanted to make sure
people would keep showing up for work before Sept. 11, you can just imagine how critical that became after Sept. 11," says Obert.
Low-Tech Tools
ITS won't say how much it has spent for Obert's help, but the PR firm indicated this was a low-budget, low-tech affair. In the first place, the client is filing for bankruptcy,
so cash is not flowing too freely. Moreover, the nature of ITS's business made the high-tech tools of the trade irrelevant.
"Many times their site manager is using shared office space borrowed from one of the major airlines out of an airport," Obert explains. "So if you want to send a fax or email
telling a site manager - 'Here is what you need to say to the customer' - well, they are sitting in the customer's office, using the customer's fax machine. As for the guard in
the guard shack, that person may not even have access to a computer."
To bridge the gap, Obert supplemented fax and email blasts with some old-fashioned tools. She arranged meetings for the headquarters staff, orchestrated conference calls
between the CEO and key managers, and produced written materials communicating the key messages of the campaign.
On the employee side, those messages conveyed basic information about the nature of Chapter 11 and its implications. Communi-cations with customers and the world at large
offered constant reminders that the bankruptcy filing was in no way related to the Sept. 11 events.
In reaching out to ITS clients through email and fax - as well as through meeting scripts for key executives and press releases for the general media - the PR team also crafted
an important financial message.
In order to move forward after Chapter 11, a firm needs to secure post-bankruptcy financing - "and talking with customers about that financing is an integral part of reassuring
them," says Obert.
Lessons Learned
ITS says the campaign has succeeded thus far. Employee attendance is as high as ever and the firm has seen no significant turnover since the bankruptcy filing.
On the client side, numerous airlines turned to ITS in the wake of Sept. 11, when their usual security firms were not able to provided needed personnel. Obert calls this a
clear indication of clients' continued confidence in the firm.
In the final analysis, she says, the coincidental timing of the bankruptcy probably helped her team to deal effectively with the repercussions of Sept. 11. "Having in place the
elaborate communication plan and all of the little details in preparation for the Chapter 11 announcement helped the company enormously," she says. "Because we were so prepared
with all those details, it really served our client well in this circumstance."
Lessons learned? In the face of an uncontrollable environment, flexibility is always an asset. "That means you work on holidays. It means you work until 2 or 3 a.m. without
knowing about it in advance. And it means you are willing to throw away the communications you have planned for various different scenarios when a new situation makes those plans
obsolete," says Obert.
(Contacts: Edward Howard: Kathy Obert, 216/781-2400; ITS: Mark Thompson, 216/642-4522)
The Agency
The Agency: Edward Howard & Co.
Founded: 1925
HQ: Cleveland, with offices in Akron, Columbus and Dayton
Major Clients: Rubbermaid, Huffy, 3M
Billings (2000): $6.45 million
Number of Employees: about 50
Staff on ITS campaign: CEO Kathy Obert, Executive Vice President Dan Stanowick, Senior
Vice President Patrick Gallaghar, Senior Account Manager Steve Phillips and Senior Counselor Davis Young
Campaign Timeframe: Ongoing
Budget: Undisclosed
Web site: http://www.edwardhoward.com
The Client
International Total Services provides contract support and security services to the aviation community in more than 300 cities in the United States and Europe. For the three
months ended June 30, revenues fell 10 percent to $44.7 million, reportedly due to a loss of aviation and commercial security staffing contracts.