The Hindu Business Line : Laissez faire and ‘spin’ do not have a place in crisis management

Choices in crisis communication frequently have costs, so return on investment is a concern that lingers beneath the surface. However, public safety should never be compromised for financial gain.

DR W. TIMOTHY COOMBS IS ASSISTANT PROFESSOR, PURDUE UNIVERSITY.

Be it a chemical leak, faulty batteries, or even an abrupt power cut, organisations today are increasingly delegating a hefty part of their responsibilities to crisis ‘communicators’ or ‘doctors’, who employ various methods and spins to save the day, leaving the public wondering if, in the process, safety has been compromised for financial gain.

“Such gains are short term and short sighted,” emphasises Dr W. Timothy Coombs, author of award-winning book Ongoing Crisis Communication ( www.sagepublications.com ).

In an exclusive e-mail interaction with Business Line, Dr Coombs reveals how the most common measure of crisis response effectiveness is media coverage. The author, who has consulted companies in the petrochemical and healthcare industry, feels that while culture will always shape the crisis management process, no two situations can be similar for the true-blue crisis manager.

Excerpts from the interview:

Has laissez faire any place in crisis management? Does ‘spin’ have a place in crisis communication?

Laissez faire and ‘spin’ do not have a place in crisis management. The key concern in crisis management is public safety. Organisations must warn people of risks or hazards generated by the crisis. Crisis managers cannot let a crisis manage itself; action is needed by the organisation.

Nor should managers be trying just to create the most positive picture possible through spin. People need balanced information and an accurate picture of the crisis.

Are there critical trade-offs, such as the costs versus returns that corporates have to consider in crisis communication?

Yes there are a number of trade-offs in crisis communication. There is tension between financial and social concerns.

How much should an organisation try to protect its financial assets vis-À-vis addressing the needs to the victims? It can be argued that addressing victim needs is an investment but it does cost money and may offer little return on that investment.

In the US, there is a debate over accepting responsibility for a crisis. Accepting responsibility will result in an organisation losing lawsuits stemming from the crisis. Other countries do not have this same litigation constraint but must consider how much the crisis management effort will cost the organisation and how much the organisation will gain from that investment.

Choices in crisis communication frequently have costs, so return on investment is a concern that lingers beneath the surface. However, public safety should never be compromised for financial gain. Such gains are short term and short sighted.

Since precaution is better than cure, can we say that good planning averts crises?

Yes, good planning does prevent crises. Planning can lead to prevention. Crisis managers can find a situation that could lead to a crisis and prevent the same.

Also quick action can keep a small disruption from becoming a full crisis. Finally, planning makes for more effective crisis response that should lessen the damage from a crisis.

What are the emerging areas in crisis communication and management?

One emerging area in crisis communication and management is online communication. Online communication is both a source of risk for creating crisis, and one of the tools that helps to manage a crisis.

An organisation’s flaws can be exposed online leading to crisis such as consumers demanding a recall of a product or activists calling for changes in policies or practices. Managements must realise they operate in a more transparent world. That means crises are more difficult to hide or to keep localised.

The way information is linked globally leads to the second emerging area, international crisis management. ‘Transnationals’ will increasingly face managing crises in host cultures that are very different from their home cultures.

Moreover, people from around the world will be able to follow and critique the crisis management efforts. Understanding and working with those differences will be critical to an effective crisis management effort.

When newer technologies come embedded with crisis potential and risk vulnerability, how can organisations hope to stay at the cutting edge and, at the same time, be equipped enough to handle crises?

This is a question crisis managers should address on a regular basis and shows the connection between risk management and crisis management.

Crisis managers should be evaluating the potential crises new technologies can bring. The evaluation can be used to minimise the risk and prepare for managing the ‘new’ crises that an organisation faces.

It is difficult to completely eliminate risk so managers must be ready to handle the new crises that can accompany new technology. That is part of the price of progress.

Do you think that approaches to crises have to be different in a developing country like India, compared to practices in the developed world?

I believe it is a difference between size and cultures rather than developing versus developed countries. In general we know little about how small- and medium-size enterprises plan and react to crises. Most crisis management information is collected from large, typically Western, companies.

Smaller organisations still face crises and may have more at risk with a crisis but we know little about their preparedness or how they respond. Culture will shape the crisis management process.

For instance, how do the qualities of an effective crisis management plan or crisis management team differ from culture to culture? How does a stakeholder in different cultures react to the same crisis message? Globally researchers are beginning to address and to answer the question of culture’s effect on crisis management.

In recent times, we have had major recalls by manufacturers (for example, laptops, mobile phones, toys). How effective are the communication exercises by companies in times of such crises?

Product recalls are handled very well for the primary markets. Organisations are effective at contacting the initial buyers of products with recall information through a mix of direct messages, online information, and traditional news media. It is helpful when the traditional news media cooperate and run recall information regularly.

The problem is the secondary market when products are re-sold, such as eBay. Crisis managers are not as effective as reaching the secondary buyers. Secondary buyers do not complete product registration forms that make it easier to reach a consumer.

Secondary buyers may not even be aware who made the product so they do not pay attention to the messages. eBay is an excellent example. Products frequently remain on eBay after a recall. eBay needs to work with organisation to find a way to identity and remove recalled products.

Many full-blown crises that companies face usually have a history, with problems simmering over a long time. Do you suggest that the corporate social responsibility (CSR) mandate of companies should factor in crisis communication so that responses happen early on?

CSR can work well with crisis management. Effective CSR can help eliminate some risks that could become crises. As you note, many long-simmering crises are a result or irresponsible behaviour where it be management practices or environmental damage.

A focus on CSR can identify the problem earlier and allow an organisation to be somewhat proactive. Managers publicly address a problematic situation before it is a high profile crisis. Again, an organisation’s reputation benefits when it announces the problem rather than others. I would consider CSR an important part of crisis prevention.

Should organisations respond to blog posts and views on social networking portals, in times of crises? How can responses/rejoinders to the print and television media be made effective (rather than issue bland statements as is often the case)?

It depends on the nature of the postings and the crisis. If the posting is at an influential blog, or a social networking portal frequented by key stakeholders, an organisation should consider posting information. But such posts must be done carefully. The idea is to post information to update the crisis situation, not to debate the crisis with others online.

Clearly identify you work for the organisation and post the information. The more vehicles used to disseminate the organisational response the better. However, keep in mind that information becomes archived and will remain indefinitely. If a crisis is small and attracting little attention, online postings can needlessly expand the audience for the crisis.

Response/rejoinders to the news media is a tough question. Inaccuracies must be corrected in a tactful manner. Contact the reporter and editor and calmly present your side of the story. You then rely on their sense of fairness to create a follow-up story.

Another option is to post the response/rejoinder at your own Web site. Keep the tone civil but emphasise the points you need to make. Since you can control how the message appears on your Web site, its does not need to be bland.

Organisations have fought online rumours using very engaging text, the same can be done for response/rejoinders to the media. However, do not pick up a fight, focus on presenting your view of the situation and any misinformation that may be circulating.

Are there measures of crises, and the response effectiveness?

Probably the most common measure of crisis response effectiveness is media coverage, both the amount and quality. For amount, less media coverage is considered better but that is not very effective. It is more important to examine the quality that would include your messages being used, your spokespersons being sources, how experts evaluate your response, and if there is any erroneous information about the crisis.

Organisations that regularly track their reputations can use the data to determine if or how much a crisis has damaged their reputations. There has been some attempt to examine effect on stock prices and sales but other factors can influence that data beyond the crisis response.

How transparent should crisis responses be? Can this dent the organisation’s reputation?

There is a continuing debate about transparency during crises. Some experts, mostly for legal reasons, want limited transparency. I would argue that maximum transparency is best. Research data indicates that organisations are hurt less by negative information when they are the source of the information rather than the news media or some other source releasing the information.

Full transparency does risk additional damage to the organisation’s reputation but that damage is less if the organisation is the source. I would always assume that whatever the crisis managers know, eventually the public will know as well. Better the negative information comes from the organisation than another source.

Lastly, what are the qualities of a successful crisis manager?

A successful crisis manager must be able to handle stress and ambiguity. Crises are time pressure situations so the crisis manager needs to handle stress effectively. Stress generally reduces a person’s job effectiveness. Crisis managers should be a person whose effectiveness erodes very little.

Crises are also ambiguous situations, as people need to act on limited or incomplete information. People vary in their ability to handle ambiguity and crisis managers must have a high ambiguity tolerance.

One final point is that organisations should have crisis management plans that are tested through exercises at least once a year. Exercises ensure the crisis management plans work and requires regular updating of the information in the plans. An out-of-date plan that has never been tested may be worse than no plan at all. The ineffective plan will create a false sense of security and cause crisis managers to lose precious time when a crisis hits.

Bio: Dr Coombs, PhD Purdue University, is an associate professor in the Department of Communication Studies at Eastern Illinois University. He is the 2002 recipient of Jackson, Jackson & Wagner Behavioural Science Prize from the Public Relations Society of American for his crisis research. He has published widely in the areas of crisis management and preparedness. In ‘Code Red in the Boardroom: Crisis Management as Organisational DNA’, a book published in 2006, Dr Coombs discusses cutting-edge techniques for ‘hardwiring’ crisis management into the corporate DNA – ‘where sensing, preventing, and responding quickly to crises becomes everyone’s responsibility’. He has lectured at various venues in the US, Europe, and Australia on the subject of crisis management.

D. MURALI

A. PAARI

http://InterviewsInsights.blogspot.com