Learning objectives including asking three questions:
1. How to prepare for a crisis (Pre-)
• Is it possible to be prepared for a crisis?
• Recognizing the signs
2. Crisis communication (During)
• Define the scale of the crisis.
• How to manage the communication during crisis? What to consider? External/ Internal
3. Effects of crisis (Post-)
• How to recover from a crisis?
• How to hold up the reputation post crisis? External/ Internal -> Social Media
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1. How to prepare for a crisis
1.1 Is that possible to prepare for a crisis?
It very important to plan for crisis thoroughly from the beginning to be actively prepared for something can anytime happen to the company. Crisis management is even more essential for small companies since they lack of resources to deal with crises (Crisis Management and Business Continuity Planning)
Crises management could be conducted as following:
First we should understand that crises can happen anytime and by anyway. It might just suddenly come without intention. It comes from vulnerability to natural disasters e.g. September 11 event (Paul A. Argenti, 2013)
Conduct SWOT analysis is the first step for doing business. This helps the organization ready for many factors possibly affects the on-going operation in different stages. Strengths and weaknesses come from company's perspectives which is considered as internal factors meanwhile opportunities and threats come from external factors in the investing markets such as demands, customers' habits, culture differences if going global, etc.
Crisis management team should be formed to handle different events of crises. Crisis management team needs to be comprised of a team of people managing potential risks and specific responsibilities for example International Communications Manager, spokeperson, decision maker.
Set objectives for potential crises. There are many circumstances where risks occur intentionally or accidentially:
- Natural disasters
- Theft or vandalism
- Fire
- Power cut
- IT system failure
- Restricted access to premises
- Loss or illness of key staff
- Terrorist attack
- Crises affecting suppliers, customers, or after the business's reputation (Prepare for Crisis)
According to article How to identify a crisis (2013), there are seven main signals to see the company potentially gets into crises:
- An event causes concerns from unwanted media attention increasing high mentioning on internet, social channels, conversation, etc.
- Incidents entail bad consequences like deaths, poisoning, relationship ruin, injury
- Matters influence the production operation or stop the manufacturing activities of the whole processes
- Behavior causes badly recognition of the company's reputation in general
- Activities might lead to law enforces and legal issues related
- Actions like rumors causing impact on financial performance and lower company's image
- Some other signs: shares drop, loss in employee retention, government investigation, etc.
Paul A. Argenti, Corporate Communication 2013, 6th edition, p262
Crisis Management and Business Continuity Planning article, Info Enterpreneurs website, http://www.infoentrepreneurs.org/en/guides/crisis-management-and-business-continuity-planning/
Prepare for Crisis article, Managing Crisis website, http://www.strengtheningnonprofits.org/resources/e-learning/online/managingcrisis/default.aspx?chp=1
How to identify a crisis article, EMA website 2013, http://www.mower.com/knowledge/how-to-identify-a-crisis/
2. Manage the communication during crisis
Internal issues:
Have a specific plan: plan what should take actions to recover the crisis.
- Get control of the situation
- Gather as much information as possible
- Set up management centre (Paul A. Argenti, 2013)
Communication with shareholders: not like customer communication, shareholder communication need to do separately. More importantly that info needs to be transparent. Some news internally to be updated to shareholders so that they grasp the situation and make their moves.
External issues:
Update frequently: it is essential to communicate with the audience about the truth, show how the company fixes and continuously develops despite the crisis.
Choose a good spokeperson: company needs to choose a person to speak out company's voice and to deliver consistent messages.
Communication with customers and suppliers: the company in crisis should consider carefully which piece of news to inform to customers and which for suppliers. For customers, suppliers and audience in general, information is delivered smartly to avoid losing reputation (Bruce Condit, 2014)
Social media: never forget to use social media properly as it could be a tool to approach audience. Communicate by social media can probably help the company reduce the attention of crisis (Bruce Condit, 2014)
Figure. Crisis Management
Case study:
The Gap was reported to use child labour for certain clothes manufacturing. As announced by president of the company that it influenced The Gap position. The key executives after had got suspended the problem came from India flew directly there to investigate the situation. Then The Gap had fired 23 suppliers and stopped using those clothes for seasonal purpose even it made loss. However, the company kept its reputation and made employees confident of leadership ability of the managers (Planning to manage your next crisis decisively and effectively)
Source:
Paul A. Argenti, Corporate Communication 2013, 6th edition, p270
Bruce Condit, 7 critical steps for crisis management article 2014, http://www.inc.com/bruce-condit/7-critical-steps-to-crisis-management.html
Ivey Business Journal website, Planning to manage your next crisis decisively and effectively article 2009, http://iveybusinessjournal.com/publication/planning-to-manage-your-next-crisis-decisively-and-effectively/
Figure, Bronzeye website, https://www.bronzeye.com/index.php/crisis-managment/
3. How to recover and hold up reputation post crisis?
An essential thing to do after a crisis is to evaluate the whole processes it has happened.
Firgure. Post-crisis evaluation
Admit and apologize for the mistakes: an organization has made and proved that the organization is trying to regain trust from audience.
E.g. When Tylenol suffered through the 1982 “Chicago Tylenol Murders” in which cyanide was slipped into many packages of Tylenol, they responded quickly and were praised for being “contrite and compassionate” by The Washington Post (cited from e-releases website).
Understand that it takes time: every hurt needs time to recover. A company after crisis should be strong and little by little rebuild its brand. Communication more often with audience enables to show the better picture of the company.
Put it down to experience: people can accept mistakes as no one nor no thing is perfect. It means that the company can gain forgiveness from the customers. They, however, hardly accept it happens again. Thus, take it to be a lesson and never let it happen the second time.
Move on and achieve higher leads: crisis may make the company wiser in decision making next time. That is one lesson to be used as a platform for developing in the future (Rebuilding trust after a crisis).
Source:
Figure, Rebuilding trust after a crisis, ShareSlide, http://www.slideshare.net/evolve24/rebuild-trustafteracrisisfinalpost
Rebuilding Your Brand's Reputation after a Crisis article, e-releases website, http://www.ereleases.com/prfuel/rebuilding-your-brands-reputation-after-a-crisis/
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