Sooner or later something blows up for every company, so every investor relations professional ought to consider crisis communication as a critical skill. We should be in training. Two business professors offer a pretty good primer in “Let the Response Fit the Scandal” in the December 2009 issue of Harvard Business Review.
In the article, Alice Tybout of Northwestern University and Michelle Roehm of Wake Forest focus on the response of management – specifically CEOs – to reputational crises. But their guidance also fits corporate staffers and others who offer counsel.
The profs lay out four steps in the response to any crisis:
- Assess the incident
- Acknowledge the problem
- Formulate a response
- Implement the response
These are familiar, common sense steps, but the important thing is that a company must execute well on all four stages of crisis response – or risk losing brand loyalty and value for years rather than weeks – say Tybout and Roehm.
The profs have a couple of suggestions specific to communication in a crisis.
Rapid response is the key to establishing credibility early. After assessing the incident’s impact on the company and its customers, go to Step 2:
If management concludes that the company is likely to be affected by a scandal, it should immediately acknowledge the problem, expressing concern for any parties harmed and outlining the steps the firm is taking to investigate and prevent further damage.
Details aren’t appropriate in early communications, the profs say. In Step 2 the company expresses concern and describes initial actions – how it’s investigating the issue and what it’s doing to contain the problem from spreading. This is about management saying we know a problem exists and we’re on top of it.
That quick “acknowledgement” to the public buys a little bit of time for the company to determine the facts and formulate a comprehensive response. At that point, the company communicates more fully what went wrong and how it is responding to correct the problem.
And this is the plan for how the brand will bounce back, and value will be protected or restored for investors – which is what we’re in business to do.