By: Shaz Poormand

Crisis Management is the process of managing threatening situations that can harm a company on many fronts, including its reputation and sales. Crises take many forms, making the need for a comprehensive crisis management plan absolutely essential. Lerbinger (1997) identifies seven categories that most crises can be organized into:

1. Natural disaster – earthquakes, tsunamis, plagues, etc.
2. Technological crises – “Houston, we have a problem”
3. Confrontation – when people confront a business about their practices, ethics and anything else they could be unhappy with and demand change, e.g. Montgomery Bus Boycott of 1955
4. Malevolence – extreme action is taken which either directly or indirectly threatens the company, e.g. Chicago Tylenol Murders
5. Organizational Misdeeds – when managers make choices that are harmful to the company
6. Workplace Violence – can be either physical or verbal
7. Rumours – nasty locker room gossip that tarnishes a company’s reputation.

There are many ways in which a company or their PR team combat the array of crises mentioned above. The library of crisis management blueprints are beyond the scope of this blog post, but I’ll discuss some of the key characteristics of an effective crisis management plan.

First, you must have a coherent plan in place. Combs (2007) suggests updating this plan on an annual basis, taking into consideration the likelihood of certain risks and who would be affected. It is imperative to have all the relevant data needed to execute a particular plan within the larger crisis management framework to increase the speed and certainty at which a response to such a situation can be delivered.

There should be a trained crisis management team, comprised of employees who are aware of the decided protocol and who are also seeking out potential crises. After thoroughly assessing the situation and understanding the nature of the threat, the crisis management team should quickly assess the most beneficial method to minimize damages and quickly rectify the situation.

With the viral spread and international nature of information shared online, the likelihood for certain crises to arise has exponentially increased. An irritated customer may unjustly decide to circulate a nasty rumor about a restaurant having rats, or organize a boycott of a clothing company on the baseless rumor that it said company is running a sweat shop that exploits child labor. As much as social media marketing can help your company, it can also harm it in far less time. It cannot be emphasized enough that all companies, large and small, need to be aware of what is being said about them, and how to respond in a timely and appropriate fashion. Scott (2010) discusses how Sony BMG took five days to respond to a blog post by Mark Russinovich that went viral after he revealed that Sony’s CDs automatically installed their rootkit on the user’s computer. In my opinion, their silence on the matter harmed their future efforts of reputation repair and frustrated their consumers further.

When your own efforts don’t work or your plan fails, it is usually best to solicit the advice of those who have experience in crisis management, such as Crisis Consultants and Public Relations companies for reputation repair. It is simply a matter of truth that some small companies (or large ones, in the Sony example) cannot effectively handle crisis management. But, by remaining vigilante and having a plan in place, they may be able to at least mitigate the early damage before bringing in an outside consultant.

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References:

Lerbinger, O. (1997). The crisis manager: Facing risk and responsibility. Mahwah, NJ: Erlbaum

Coombs, T.W., Ph.D  (2007) Crisis Management and Communications http://www.instituteforpr.org/topics/crisis-management-and-communications/ (Last accessed on 22/9/11)

Scott, M. D (2010) The New Rules of Marketing & PR. Hoboken, New Jersey: John Wiley & Sons, Inc