How to navigate through a company crisis

30th October | Thought Leadership, Issues and Crisis, Reputation Management

No comment’ is the reflexive response from leaders in business and politics when asked a question they cannot or dare not answer. It’s been used for decades – so what’s wrong with it? Well, it’s virtually never useful in the face of a difficult or leading question from a journalist, blogger or influencer.

A common scenario is a journalist receiving a tip or enquiry from a competitor or other interested party who seeds questions about a company – perhaps in relation to leadership or a project. The CEO is then approached, by phone or email or an in-person visit by the journalist, sometimes with camera person in tow.

The line of questioning can take many forms: it can be well informed and thoroughly researched, but often the journalist has only a piece of the puzzle and is digging for more. Their questions may be provocative, misleading and designed to put the interviewee off-balance. We all know that caught unprepared, people are more inclined to have their guard down and say more than is wise.

(A side note: There are certainly many occasions when a journalist’s enquiry is well-founded and the company has to own up to a genuine failure or error; in these cases, a ‘no comment’ is not only not recommended but may be irresponsible. This article pertains to these types of cases along with those where the company is not at fault but the rumour mill is at work.)

Sometimes it’s difficult to comment because of timing, commercial sensitivity or legal or regulatory considerations, but the upshot is that the best response is a meaningful one.

What’s an issue?                        

An issue that a company will need to prepare for and manage carefully would be a change of leadership. Let’s say you are the CEO of a large cooperative whose fortunes have considerable ramifications for the wellbeing of the national economy. The departure of a CEO from such an enterprise is not in itself a crisis, unless precipitated by or related to a serious problem (more on that below), but any significant shift in the senior ranks of the company needs to be handled proactively, with the company announcing the schedule for the current CEO’s departure (along with a valid but neutral reason), the process for appointing a replacement and, if necessary, who will step in as interim CEO (ideally this is someone already very close to the top, such as the current COO).

What’s a crisis?

Let’s say that same company, a large and wealthy cooperative, has extensive interests in foreign markets, and exports raw material for production and sale in a large Asian country. A crisis is triggered when the edible product containing that raw material is found to be contaminated, putting lives at risk. Questions are asked about what the cooperative’s leaders knew, when they knew it, and what the processes were to ensure the product was consistently safe for human consumption.

Ways to achieve your business objectives and satisfy a journalist request?

 1)   To reiterate, never say ‘no comment’. If a journalist cannot extract more than that from a company spokesperson, they will go to other sources to fill the space and the company has no control. If you don’t offer something, you’re not in a position to complain about inaccurate, speculative or misleading coverage.

2)   If you can’t answer a question, say why. A journalist may be asking about an active legal case, or about something that relates to a client whose privacy the company cannot breach. In these instances, it’s appropriate to acknowledge what the matter is and what the company’s role is and then draw a line with a message of ‘we will not be commenting further while the case is before the courts / we do not comment publicly on the affairs of our clients’. When these types of quotes are used in media, audiences understand the company’s position and the reason for the limited comment.

3)   Have a basic strategy for media approaches. Journalists are time-poor and will most often put through a call or email. Ensure that all staff are trained as to how to respond. If it’s a call, be courteous, ask for the journalist’s deadline and undertake to get back to them. Request that they forward their questions in writing so you can make sure the right person responds. For emails, which will sometimes go to a general ‘info’ address in the company, ensure you have one or two ‘point’ people who receive media enquiries and can triage them – in larger companies, this will be the comms manager or a responsible member of that team. Above all, never leave a journalist hanging. If they want information that you can provide but will take a day or two to collate, respond to explain that. It’s their responsibility to negotiate deadlines with their editor once you’ve made clear what you can do.

4)   Prepare for the worst. No one likes to dwell on the negative, but part of the mandate of a CEO and board is to have a plan for what can go wrong. Make a list of the top five to 10 risks facing your business; for example, if you’re running a financial services company, is there a chance of a staff member embezzling funds or the company somehow running afoul of the FMA? Then make a plan for each scenario, and how you would handle it internally and externally. This preparation should include comprehensive media training for whomever might be called upon to speak for the company now and in the foreseeable future. (More on this below.)

5)   Fight back or front up. If you’re certain a troublesome line of questioning has been seeded by a competitor, an open approach can work well. Journalists can be disarmed and better informed by being invited for a personal tour of a work site with a CEO. For example, the leaders of a fintech company might invite a tech journalist to see a real-time display of the proprietary software that has been disparaged by a competitor. If the line of questioning is warranted, and there is a company failure or mistake, own up to it as much as possible, and if there are aspects you can’t talk about, explain why. Ducking and diving is a disastrous approach in the digital media age.

Navigating out of crisis

If your company is facing an issue that affects your reputation there is no substitute for facing it head-on and communicating clearly about what has happened and what is being done about it. This has to be handled properly in order for the long-term process of rebuilding to commence. If it hits you out of the blue, you are probably still reeling and dealing with the board, customers, suppliers, and affected parties.

If the event is unplanned, all energy will be going to:

1)   Identifying what’s happened and why.

2)   Developing a timeline and facts to understand how to respond.

3)   Developing written, audio and (sometimes) video responses to communicate the who, what, where, how. This is your detailed response that includes taking responsibility and apologising, if appropriate.

4)   Liaising with HR, legal, the board and possibly other subject experts.

5)   Answering customer, stakeholder and media questions (this will sometimes happen in phases).

6)   Managing business as usual.

If you have a detailed, up-to-date crisis / issue plan you can skip 2-4 and go straight to 5, ensuring a faster and more effective response and better protecting the company’s and leaders’ reputations.

Have an issue and crisis plan

1)   Conduct an audit of potential risks in your business.

2)   Document where things could go wrong, health and safety, HR, customer privacy, road rules, internet trolls, natural disaster, fraud, etc.

3)   Develop a spreadsheet and allocate potential spokespeople.

4)   Do a run-through of each issue and understand which audiences will need to be informed and how you will reach them.

5)   How will you speak to each audience if it happens after-hours – do you have current databases?

Google’s long memory

The Right to be Forgotten has been discussed in the European Union and in Argentina to “determine the development of their life in an autonomous way, without being perpetually or periodically stigmatized as a consequence of a specific action performed in the past”. This is not likely in Australasia any time soon and there is no substitute for “doing good” consistently over time to balance the scales and maintain a good Google presence.

The plan to recover your reputation on your Google search should involve the following steps:

1)   Identify the communities and markets affected by the issue or crisis, including your customers.

2)   Has cultural change happened in your business to ensure that the same issue doesn’t recur? What has been learned?

3)   Have you changed company policies and procedures to minimise any future harm?

4)   Investigate how your company can create meaningful value in these communities through an investment programme or community support initiative.

5)   Don’t assume this is a short-term fix. Once you see that the target audience and community is benefitting then it’s appropriate to consider how to share the story.

6)   Sharing the positive community initiative needs to be a win-win, so any video, podcast or blog or media interview must create that value.

7)   Develop a 12- to 18-month content plan that a) prioritises doing good and b) focuses on slowly downgrading the negative content and promoting the positive content.

8)   Because most negative media articles will surface on top-tier or established high-ranking media, your content strategy will need to ultimately aim for these Google-ranging media to ensure that the rehabilitation is clear.

9)   It takes time and investment and it’s sometimes hard yakka, but it’s appropriate that it takes time to balance the ledger and demonstrate a turnaround.

10) It can be very rewarding to come out the other end.

Turning a crisis into an opportunity 

There are no perfect companies and crises are just as much about how you react as the event itself. Social media has hastened the requirement for a plan for if and when it hits the fan. If something has genuinely gone wrong how can your company balance the ledger?

  • Do you need to apologise?
  • Does your company need to make reparations?
  • Can you invest time each month towards improving your business and giving back to affected communities?
  • Do you have the will to create cultural change in your business?
  • Have you considered how to turn this learning into a way to help others?

Draw a line under the period and once you have a plan to balance it all, put it behind you.