When a crisis breaks, act fast

Taking control of a crisis from its very first moments is essential if a company is to stand a chance of recovery.

Taking control of a crisis from its very first moments is essential if a company is to stand a chance of recovery.

The fortune of the crisis PR industry can be told just by reading the headlines. Combine the front-page scandal stories with water-cooler gossip about what didn't make the paper, and one can form a fairly good picture.

By that standard, the past year or so has kept crisis PR pros hard at work. Not only are there swaths of Wall Street crises still playing out (not least with the Enron trial under way), but more widespread consumer fiascoes like product recalls, terrifying disease threats, and unsavory food-related incidents are continuing at a brisk pace.

One of the most visible crises in recent memory was the Wendy's chili scare, where a customer in San Jose, CA, claimed to find a type of finger food that was not on the value menu. Ketchum and Wendy's - both of which declined to be interviewed for this article - immediately sprang into action.

In hindsight, the defining factor of the Wendy's crisis was the fact that it was a hoax, but during the early hours and days, the agency had to work with Wendy's to scrutinize its supply chain and employees to determine that. Once the investigative agencies came to the same conclusion, Ketchum helped make sure that coverage of the company's exoneration was just as loud and pervasive as that of the original incident.

It was a classic example of instant coordination at the onset of a crisis, followed by dogged execution of the plan throughout the ensuing media storm. Bill Keegan, an EVP and director of Edelman's crisis and issues management practice out of Chicago, calls the first 24 to 48 hours "the golden hours" and says taking control then can be the key to ultimate success or failure. "If you don't get up and running, and get moving, and get out the best information available that you have at the time, you can lose control very quickly," he says.

Consider Oprah Winfrey's recent debacle with book club author James Frey, whose best-seller A Million Little Pieces was exposed as fraudulent by an investigative Web site. MGP & Associates president Mike Paul, who frequently handles high-profile crises, notes that Winfrey immediately expressed public support for Frey without checking the facts - a dangerous and thoughtless decision.

"People assume you knew all these details yourself," Paul notes. "So to have a bold move and to back a troubled author with a kind of a protect-the-fort mentality... that's a significant strategy that had a lot of flanks still open."

In December 2004, Edelman's Keegan and his team were retained by Archway Cookies, which had a major problem: Some of its specially produced Holiday Cashew Nougat Cookies were found to contain glass fragments. (Archway was since sold to Catterton Partners in February 2005.)

Keegan knew his team would be operating within the three key realities of food recalls: First, many smaller companies like Archway don't have standing crisis plans in place, meaning that taking advantage of the golden hours is a "race against time"; second, the lack of confirmed information at the outset of the crisis meant that while the investigation was being pursued by the government and the company, the crisis team would be "generating in a vacuum"; and third, the fact that most of the product will have already been consumed or frozen by the time the recall hits (Keegan says that getting back 15% of a product is considered successful) forces the company to bombard consumers with its message as often as possible, as early as possible.

First, Archway set up a call center and a Web site as contact points for customers with questions about the recall. While the Food and Drug Administration and the company searched for the problem's cause, the agency worked with local and national media in all parts of the country where the product had been distributed in an effort to push out information on what consumers should do if they had bought the potentially tainted cookies.

Edelman kept Archway closely involved in the communications process. The company's president, along with Keegan, served as a spokesperson. "You want to position senior management front and center," Keegan says. Officers of the company also made personal phone calls to customers who had received the tainted cookies, to express their own concern and regret (on a perhaps related note, there was no class-action lawsuit related to the recall).

The crisis team wrapped up the bulk of its work after about a month and entered what Keegan calls rehabilitation mode.

"You now are focused on reassuring customers that the products are safe to eat and comply with all regulations," he says.

The cookie incident was a wake-up call for Archway. Many companies immediately institute a crisis plan they can pull off the shelf, including details as seemingly mundane as phone trees, which save precious hours at the outset.

"What I tell my clients is, 'If you were a football coach, would you go into the Super Bowl without a game plan?'" Keegan notes.

 

Archway's crisis

0-48 Hours
Began an investigation of the source of the glass in the cookies; issued a release; set up a Web site and call center; involved senior executives in the planning and execution of communications.


Days 2-15
Used call center information to expand the company's knowledge of the scope of the incident; assured consumers that a refund was on the way and the crisis was being handled; continued to work with the FDA on its investigation; monitored media coverage and quickly corrected mistakes which could have given consumers bad information on the recall.


Days 15-30
As calls dropped off, assessed data gathered from the call center; kept company executives visible in the media and had them make personal calls to customers; kept IR team in contact with investors and analysts to discuss potential impact of crisis.


Days 30-60
Shut down call center; wrapped up investigation into the crisis' cause; applied lessons learned from the incident to a new and improved company crisis plan; monitored any litigation that resulted; began working to re-establish corporate reputation.

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