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What to do when crisis strikes

Special to The Globe and Mail

harvey@harveyschachter.com

In a crisis, news coverage and public interest tends to follow a consistent pattern. There are four stages to be alert to if your company is sucked into the frenzy, international crisis expert Jane Jordan-Meier observes.

"Those predictable patterns help you plan better [and] help you stay ahead of the game when you find yourself warding off fire from more directions than ever, because every man and his dog can have an instant, unrestricted say on the matter, thanks to Twitter, You Tube, and 'Lord' Google," she notes in her book The Four Stages of Highly Effective Crisis Management. She describes the stages as:

Fact-finding

The spotlight is shining on the incident, with the mainstream media trying to confirm basic details of what happened. This is the breaking-news phase, the sort of intense scrutiny we've seen with the crisis at Rupert Murdoch's News Corp. Just as you are trying to determine what resources you will need to handle the situation, the mainstream media is trying to determine what resources they should throw at it. Social media can also be active at this point - they are instantaneous, and can also break news.

Questions at this stage are often speculative as the news media, acting in the interest of public safety, try to determine if people are safe, the response quick, the victims dealt with properly, and the reason for the calamity known: "The key lesson to stage one is only say what you know to be fact. Resist the temptation to speculate. You need to think like a reporter, and think ahead," Ms. Jordan-Meier advises.

The unfolding drama

The spotlight now moves from the incident to the response and the victims. She calls it the "unfolding drama" stage, since the initial facts about the incident are now out there for debate and discussion, in the mainstream and social media, as well as dinner tables. She also stresses it is "dirt-digging time; there will be more disclosure. You cannot hide the skeletons. The truth always comes out. Just ask Tiger Woods."

This is the reputation-forming stage - and it can be make-or-break for your organization. You need to put the incident in perspective, and have a key message that justifies what you have done. The lesson here is to understand the power of the crowds in social media; ignore them at your peril. Court those who will support you, serving as your unauthorized spokespeople, and try to help get them a voice. If you handle this stage well, you may be lucky enough to skip the mudslinging ahead in stage three and jump straight to stage four.

Finger-pointing

The blame game can now take over. People want to know who is responsible. Try to avoid mudslinging matches. Highlight what you have achieved, show you are talking to your critics if that's appropriate, remain available to the news media, and if you haven't hauled out the big guns in the organization yet this may be the time. "The lesson in stage three is to manage stage two well - very well! Never wait until you have the right information to speak or think that your brand can withstand the public scrutiny. Reality is that it can't," she declares.

Resolution and fallout

The spotlight may have dimmed on your crisis, but will return to full glare if you slip up or something similar happens elsewhere in your industry. Resolution can take many forms, ranging from financial woes for your company, or an inquest or a government inquiry. Review the crisis yourself and mark its end with a ceremony involving your staff, making sure to thank those who made sure the company survived the crisis.

*****

REPUTATION / RUPERT MURDOCH AND YOU

If you have been watching media mogul Rupert Murdoch as he stumbles through the crisis at News Corp., you may want to consider how what tripped him up might also trip up your own company. You may not hack phones or bribe police, but Harvard Business School Professor Michel Anteby brings the situation closer to home by noting that most companies operate like Russian nesting dolls, where one large figure is actually made up of many smaller ones.

Within your corporate nesting doll are probably other smaller companies or external individuals that conduct some, or a lot, of your business. That exposes you to what is known as moral hazard, since you will behave differently than if you were fully, obviously exposed to risks. That the cellphone hackers in Britain may not have been employees of Mr. Murdoch's News of the World paper "illustrates the Russian nesting-doll model, which contains the seeds of moral hazard, since it allows for the plausibility of denial," Prof. Anteby writes on Harvard Working Knowledge.

"While we readily recognize such a hazard in the food and apparel industries and the need to 'secure' all elements of their production chain, most other industries have yet to recognize such a hazard."

He says the Murdoch case teaches us that the nesting dolls require our full attention - whatever our industry. These configurations may be useful, but they can also be problematic, if not ruinous.

*****

IT / CLOUD-COMPUTING MYTHS

With companies reaching into the clouds for their IT services, journalist Stephanie Overby addresses some myths about this trend on CIO.com:

Myth: It's insecure. In fact, just because your data is somewhere else doesn't mean it's more or less secure.

Myth: It's simple. You'll be promised a turnkey implementation. But in fact, moving your customized systems to the cloud takes time.

Myth: Chief financial officers will love it, because it turns capital expenditures into

flexible operational expenditures. Flexibility is fine, but some companies, after considering their needs and tax

situation, may prefer the capital expenditure.

Myth: It can't be used for core systems. Brazilian retailer Lojas Renner, for example, is using the cloud for its billion-dollar retail business.

Myth: It's always cheaper. You have to be careful of the extra costs that will come with growth, and negotiate effectively. Otherwise, cloud computing may not be cheaper.

*****

POWER POINTS

Set employees free for a 'genius hour'

If you can't free your employees for 20 per cent of their time to pursue innovation of their own inclination, such as using Google, how about a genius hour?

Each week at Columbia Credit Union in Vancouver, Wash., each employee gets one hour, at a scheduled time, to work on new ideas or master new skills. While they do that, their boss pitches in to answer the ever-ringing phones on their behalf.

DanPink.com

BEHAVIOUR

Four-to-one odds this will spur staff

Leadership trainer Dan Rockwell challenges you to join him in applying the four-to-one rule: Every negative comment you make must be followed by four positive ones.

"Words are rudders; they set and maintain the direction of life. Positive words take you where you want to go." It required some adjusting, he notes, with "You did that wrong" becoming "I'm confident you can do better." Leadership Freak blog

THOUGHT FOR THE DAY

A microlesson from microlenders

Blogger Kira Gould suggests following the lead of microlenders and offering small, no-interest loans to your employees. It's a benefit many would doubtless appreciate. BNET.com

TECH TIP

Free e-mail tool helps keep things attached

Ever send off an e-mail that was supposed to have an attachment, but without the attachment?

Free help is at hand. CodeTwo Attachment Reminder is a Microsoft Outlook add-in that will alert you when you indicate in an

Outlook message you intend to include an attachment but don't. It scans what you wrote and looks for key phrases that indicate there should be something more to your message.

AddictiveTips.com

© The Globe and Mail

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