In the business world and in the communications arena as well, there's only one way to view your crisis management plan: as an insurance policy that's a surefire ticket to whether you'll be around in the future.
The crisis management, or risk management, plan of the 1990s isn't a multi-page document that's locked away in a safe and brought out when disaster strikes. It's an undertaking, depending on the size of your company and the number of locations you have, that could take between two months to a year to complete.
Today, crisis management has become a strategy that's carefully planned, revamped, updated, scrutinized and enhanced as businesses grow. It also provides one of the key ways communications departments continue to guide corporations in the public-perception and image theater - what has become the crux of not only how the media views businesses but often the barometer for how customers and shareholders view a company.
In full, the crisis management plan is an A-through-Z blueprint for how your company will react in the event of a crisis - which in the 1990s and heading into the millennium can include a plane crash or industry explosion and even widespread personnel complaints. The plan is also meant to set in stone how your communications and operational divisions will work together to minimize the damage.
If you're not convinced that a crisis management plan can be the difference between success and failure for your company, just consider this statistic: Research has shown that in the first 12 hours of a crisis, a company can recover the money that would be spent on potential liabilities and lawsuits over a 10- to 15-year period, according to Bob Wilkerson, president and CEO of The Corporate Response Group Inc., a crisis management consulting firm based in Washington, D.C.
Small companies are likely spending far more than $100,000 (which was the industry standard five years ago) and large corporations, those who have to undertake exhaustive and complex drills to find out if their plans are workable, are easily spending several million dollars a year to make sure than when the press comes calling, that the right checks and balances are in place.
"This is a plan that should be looked at continuously," said Wilkerson. That analysis includes incorporating new subsidiaries, tweaking information if there are changes on the operational levels and even making sure that databases, including staffers' phone numbers, are updated on a consistent basis.
Putting a Plan Together
Long before you meet in the conference room with the team of people who will explore what potential crises your company faces and how they should be handled, getting a buy-in from those in top management is crucial.
"You need to sell the idea," said Frank Corrado, president of Communications For Management Inc. International, Chicago. "You [the PR director] need to be the champion in your organization."
But that doesn't mean simply devising an outline and plotting what steps are needed. To ensure that your CEO recognizes the worth of such a plan, you'll be doing a lot of upselling. That may require a presentation that includes video news releases of what corporations under fire have faced; statistics and market research; an estimate of what a consultant will cost; and substantial forecasting.
That's because, Corrado jested, getting senior-level managers to focus on crisis communications can be like convincing a "16-year-old to focus on life insurance." (That's an analogy that may sound trite but sources told PR NEWS that companies a decade ago so dreaded crisis plans that some execs at corporations believed having a risk management plan made them legally vulnerable because they were seen as an admission that something could go wrong.)
"Ten years ago, I even had a client who hired us through a PR firm because they didn't wan to say they were hiring a crisis management company," Wilkerson recalled. Even though that view is passe today, it's an indication of how some execs view crisis plans: as a mere formality versus an insurance policy.
There are more than an ample amount of crises in the past decade that serve as examples that a crisis plan should be far more than a knee-jerk or requisite business move: Texaco, Exxon and TWA. All are prototypes of how unforgiving the press and the public can be.
James W. Hart Jr., VP of public affairs at the PanEnergy Corp. in Houston, knows that having a sound crisis management in place was an integral part of how the company, which has received industry awards for its handling of a 1994 pipeline explosion, has kept its business reputation intact. The crisis plan "contributed enormously" to how the company - which spent $7 million in aid to displaced victims - was perceived by its constituent audiences, according to Hart.
After the explosion, PanEnergy (then the Texas Eastern Transmission Corp.) hired an outside consultant to survey the media, those in the community and politicians to find out how they felt the company handled the crisis and the feedback confirmed that the corporation had handled it well.
Proceeding After the Buy-In
According to Corrado, those who will be involved in the planning process varies according to the nature of the company; however, plan leaders can rest assured that among the key players will be the top managers from operational, legal, risk management and human resources branches.
It also will involve business unit heads and those who handle internal communications, media relations, marcom programs and purchasing, according to Wilkerson.
The reason for involving these key employees is that they are the ones who will answer the series of questions, including what they view as a possible venue for a crisis and how they would set out to squelch a situation and deal with the potential fallout.
This stage brings to the forefront how they would brief staffers and how they would deal with pressure from the media, and it also helps in establishing policies and procedures and rules for communication.
Sources say those steps are necessary because they help uncover how personnel will respond in the event of a crisis. After that, it's wise to incorporate on-site mini workshops to provide communications advice (and guidance from those on the operational side) and mock press conferences.
Corrado said that the emphasis placed on crisis management and communications began to surface after the Three-Mile-Island debacle became a case study in what not to do.
The March 28, 1979, accident has been poked and prodded at by experts who have judged it from every angle, including communications leaders who believe that had there been a plan that addressed potential safety hazards, it would have been an exceedingly different scenario. Ever since then, crisis communications has become the focal point of much of what corporate communicators take on and oversee.
"Ironically, many companies used to be cheap and didn't want to pay for a sound plan and then when a crisis erupted, the message was: 'Here's a blank check. Do anything you can to get us out of it.'"
The best way to approach a crisis plan is by looking at it as a set of hypotheticals, anticipating everything that could possibly go wrong and then rehearsing responses, said Lee Canaan, CEO of Canaan Public Relations, New York.
"It should be played out every six months," Canaan added, "and run through whenever there is a new major product launch" or other changes such as acquisitions, alliances and mergers or operational shifts. (The Corporate Response Group, 202/775-0177l; Communications for Management, 312/641-0570; Canaan PR, 212/223-0100)