Crises Loom, Yet Organizations Continue to Ignore Threats
The wave of sexual harassment-related firings continues, proving on an ongoing basis that no organization is immune to a crisis that can cause harm to employees, customers and communities, disrupt business operations, or trigger a dire reputational risk.
According to the Institute for Crisis Management, in 2016 – well before the #metoo phenomenon — discrimination stories increased fourfold from 2015. The institute also reported that, again versus the previous year, crises related to cyber-crime and data breaches had increased 25% percent in the U.S. alone. According to the 2016 ICM Annual Crisis Report, mismanagement accounted for 29.2% of the stories tracked, with the most crisis- prone industries being automotive, pharmaceuticals, food, banking, insurance and financial services, health care, manufacturing, government agencies, transportation, and energy.
Conventional wisdom within the public relations profession says that operations-related issues represent 95% of all crises, but only 5% of reputation risk. So, non-operations crises account for only 5% of all events … but generate 95% of reputation risk. Despite this surge in crises, nearly half (48 percent) of the communicators surveyed in a recent Nasdaq Public Relations Services / PR News poll said their organizations lack a crisis communication playbook. While most organizations may not want to think about a crisis impacting their business, the truth is, they should.
Even beyond crises, organizations face greater risk from conflict, controversy and competitors that could impact business and reputation. Planning for a crisis is no longer a luxury or a “big business” issue – every organization needs to be ready.
Effective crisis planning requires multidisciplinary teams, including public relations, human resources, legal, financial, operations, and several others. It should consider a trio of essential phases:
(1) readiness, risk assessment, and training,
(2) response, and
To navigate the process, organizations need to employ a powerful “antenna” that will yield an understanding of the needs of customers, employees, and all those whose attention and trust they seek to secure. They need to engage a strong conscience to make moral decisions and meet the social and ethical norms of the communities they seek to belong to. And, they must be prepared to project a powerful voice to clearly articulate a defined vision, both for today and tomorrow. Effective crisis planning must extend far beyond statements and comments, effective crisis management is a state of mind.
A crucial area that’s frequently overlooked is apology philosophy and policy. In essence, when to accept responsibility and how and when to say “sorry.”
Even as they hope for the best, every organization – large or small — should be anticipating problems and planning for the worst. For more information, download our Crisis Management brochure.