Crisis management myths
October 26, 2010
by L. Joshua Sosland
DEL MAR, CALIF. — While preparing for the possibility of a food safety crisis is important, senior management must understand that smoothly navigating an emergency is rarely possible, said John Weber, president of Dezenhall Resources Ltd., a Washington communications firm.
Mr. Weber spoke Oct. 15 at the North American Millers’ Association annual meeting, held at the L’Auberge Del Mar, Del Mar, Calif. NAMA is a trade group for the wheat, corn, rye and oat milling industry.
Mr. Weber began his presentation explaining what he believes may be false expectations of the potential for a smooth process when a crisis arises. Asking the group to give an example of a well managed crisis, the response from an audience member was one he expected — Johnson & Johnson’s handling of the 1982 Tylenol crisis.
Mr. Weber said J&J’s seamless handling of the crisis was a myth, noting that eight days passed before the company responded, an interminable delay by today’s standards. He pointed out that while the public’s fury was not directed toward J&J, the reason was not the company’s handling of the situation. Instead, the public focused on the fact the recall was prompted by a criminal who was tampering with capsules.
Also taking the edge off public anger, Mr. Weber said consumers had an easy response when learning that Tylenol may be tainted — throwing the pills away.
“You can’t do that with, say, breast implants or a Toyota,” Mr. Weber said.
While the company’s rapid introduction of tamper-proof packaging generally was characterized as a positive for J&J, Mr. Weber noted the solution had been developed two or three years earlier, but the company had not yet adopted it.
“The lesson of all this is that the perfectly managed recall is a fairy tale,” Mr. Weber said. He warned the millers to be wary of public relations firms offering sanitized case histories.
“Even well-prepared companies only muddle through crises,” he said. “They may show you the Chinese symbol for crisis, containing the word for opportunity. Trust me, a crisis is not an opportunity. Success in managing a crisis is minimizing damage and achieving closure.”
Mr. Weber said his discouraging view of crises and crisis management largely reflects the significant number of groups with interests arrayed against businesses facing a crisis. He spent much of his presentation discussing how members of these groups are motivated to keep a crisis alive and the public inflamed. In particular, he mentioned the news media, regulators, whistleblowers, non-governmental organizations, short sellers, politicians, plaintiffs bar and competitors.
“Plaintiff lawyers are the venture capitalists of crises,” he said.
From the perspective of the news media, the default position regarding any crisis tends to be that the involved parties mishandled the situation. Mr. Weber said he and his firm frequently have been contacted by reporters during crises and have been pressed to characterize the company’s handling of the matter as poor.
Portraying the various constituents that depend on crises as gears in a large machine, Mr. Weber said just about the worst antagonist may be the Department of Justice.
“When they get involved, your life, as you know it, is over,” he said. “Not every recall, every crisis is that way, but you need to understand what’s out there and how it works.”
Elaborating on the possible need for allies and resources, Mr. Weber offered as examples a Washington-based law firm; trade groups; experts/consulting firms; and think tanks/business advocates.
When a crisis strikes, Mr. Weber said a good checklist to assemble immediately includes:
1. Verified facts
2. Critical unknowns
3. Time drivers such as shipment timetables or media deadlines. “Don’t let deadlines pass simply because of a lack of awareness,” he said.
4. Immediate actions taken
5. Key audiences
6. Key messages
Mr. Weber also urged the millers to be particularly mindful of “outrage factors” that exacerbate crises, including a vulnerable audience (e.g., school children) being affected; the presence of optics or video; a large scale problem; a problem with exotic, unknown or mysterious causes; changing expectations; and perceptions of a delay or cover up.
When dealing with a crisis, Mr. Weber added the first response should feature an acknowledgement of the situation, indicating that your company is addressing the problem and will provide updates. Food recall press releases should, ideally, come from the company, rather than the government. Mr. Weber noted the availability of recall templates on government web sites and suggested the release be shared with regulators in advance. The releases should feature facts, a description of what consumers may do and what the company is doing.
The overall objective, Mr. Weber said, is to “Get it out. Get it right. Get it over.”
New age communications tools may be beneficial in a crisis, Mr. Weber said. On-line messaging and social media allow for a more controlled message; sidestep the news media and demonstrate responsiveness.
Trying to glean lessons from past crises, Mr. Weber said every situation is unique, and dogma is unhelpful in approaching crises. Companies have different cultures from one another, and plans must be suited to a company’s unique strengths. Emphasizing the uniqueness of every crisis, Mr. Weber said, “Given the choice between a good plan and a good leader, I’d take a good leader every time.”