What's the worst that can happen?

John N. Frank examines the way numerous adverse events during the past couple of years have forced a reexamination of crisis PR.

John N. Frank examines the way numerous adverse events during the past couple of years have forced a reexamination of crisis PR.

When historians write about the start of the 21st century, chances are they'll call it a time of major crisis. The World Trade Center attacks of September 11 changed the country profoundly and in ways still unfolding. The tech wreck ended a major US expansion and contributed to a recession still keeping millions out of work and the US in the economic doldrums. Corporate scandals rocked the business world and spelled the end of one-time high-flyers like Enron and long-established business icons like Arthur Andersen. On the terrorism front, anthrax followed September 11. That was followed by the Washington, DC-area sniper spree, and US troops fighting in both Afghanistan and Iraq. In the public health arena, SARS produced worldwide fears, while mad cow disease has again reared its ugly head, this time in Canada. All those events have battered the psyche of corporate America and put a major emphasis on crisis planning and on expanding the type and scope of what companies are planning for. "A belief that we are going to return to some sense of normalcy has given way to the reality that there is no normalcy," says Jack Leslie, chairman of Weber Shandwick. "I think there have been fundamental changes." Bob Peirce, a senior partner and SVP with Fleishman-Hillard in St. Louis, notes that he's seeing more and more RFPs with budget line items for crisis planning and crisis training. "Companies are starting to see that a crisis can occur anytime and come from any direction," he says. "Companies are beginning to see that crises are not the remote possibility they once thought." New crisis issues Crisis experts, whether at agencies or in corporate communications departments, agree the basics of crisis planning remain the same, but that the scope of issues being considered is changing dramatically. "The smart leaders are asking, 'Are we prepared for the thinkable and the unthinkable,'" says Hugh Braithwaite, president of Braithwaite Communications in Philadelphia. Prior to September 11, much crisis planning was based around given scenarios, such as a major product recall, explains Peter Stanton, president of Stanton Communications in Washington, DC. "What we've learned post-9-11 is that it's impossible to forecast every scenario," Stanton says. So crisis planning today is looking more closely at how a company will make decisions during a crisis and how it will respond in a timely manner. "What they're doing is determining who is responsible for what," he says. That extends to coordinating responses with others outside senior management, as well as those outside the company. Greg Rossiter, SVP of corporate communications with First Data in Greenwood Village, CO, says, "What corporations are doing is taking a global cross-functional approach to dealing with these crises." Crisis planning once went on only at headquarters. Now, it's also taking place in secondary markets around the world where a company may operate. The reason is simple, Rossiter says, "The challenges we're facing really are on a greater scale." On the government side, today's crisis-filled world is leading government agencies to consider coordination and command and control issues they had not thought of in previous crisis planning. Todd Irwin, a senior director with A&R Partners in San Mateo, CA, worked on 2002 Winter Olympic crisis planning while with another firm, Coltrin & Associates. While there, he saw firsthand how the scope of crisis planning changed. When planning began in August 2001, possible scenarios considered included someone crashing a small private plane into the opening ceremonies. Then, a month later, the World Trade Center was destroyed by hijacked commercial airliners. Coordination is the key Irwin stresses the importance of coordination across government agencies and other groups that may be involved in a crisis. "Map the operational control" in a crisis, he advises. Control of a disaster site like the World Trade Center will often pass from one governmental agency to another. "Make sure you map communications to that" so everyone involved knows who is responsible for communicating with the outside world, Irwin advises. The legacy of terrorism has added a security component to crisis planning as well, says Richard Hyde, director of Hill & Knowlton's US crisis communications group. "I would be hard-pressed to say security was part of the team prior to two years ago," he says. Plans are also considering not only the safety of employees, but their emotional well-being in a crisis, Hyde says. "We're seeing companies we work with build that into their threat-response plan as never before," he maintains. Indeed, after September 11, H&K reexamined how it advises dealing with crises, consulting with psychological experts about how people handle trauma. Corporate scandals have convinced many companies that crisis planning needs to include not only key messages they will put out should a crisis hit, but the attitude the company projects. "I think people are very suspect of business now," says Jerry Santos, SVP corporate communications at battered telecoms company Global Crossing. Business reporters are scrutinizing the companies they cover more closely thanks to the corporate scandals of recent years. "Reporters are all over you now. People are looking for wrongdoing," says Santos. And CEOs are adopting a new attitude today. "The last two years have seen so many crises of so many kinds that I think CEOs are coming to see 'not being prepared' as a negative thing," says Peirce. Being prepared for a crisis is "being seen more now as an important part of business planning," he adds. Just ask someone like Santos. "We eat crises for breakfast," he jokes, rattling off a long list of situations Global has faced including questions of accounting impropriety, Congressional investigations, bankruptcy, and a government-contested takeover offer. In today's world, "you have to be ready to swarm around any problem," Santos says. "You have to be geared up for a crisis just about all the time." Santos says the basics of his crisis planning remain the same: know what the key messages are and know which senior leaders will convey them to which key audiences. In the past year-and-a-half, his department has developed a tri-fold wallet card for senior executives which outlines what they should expect if a crisis hits. The cards include a hotline number to call for information, numbers for key company departments, and a Q&A on how to alert the company to a potential crisis brewing, says Rebecca Yeamans, VP, media and analyst relations. "The biggest problem is really getting your senior leaders to talk about a crisis," says Santos. "The natural instinct is to go hide under a desk." Bill Margaritis, corporate VP of worldwide communications and investor relations with FedEx, agrees on the need for senior-management involvement in crisis planning. "It really has to be part of a culture and a business strategy," he says. "It needs to be infused in the culture. The buy-in from senior management is critical." FedEx has found its system for handling crises has served it well during the past few years, he says. It relies on front-line workers around the world to alert the company to potential issues, and it uses its global TV network, e-mail, town hall forums, and face-to-face meetings around the globe to make sure employees know how the company is responding. During the Iraq war, "internal communications was a priority," Margaritis says. But while experts see major US companies paying more attention to planning, some are doubting that mid-size and smaller companies are doing enough yet. "There are still a lot that don't have a plan or an updated plan in place," contends Christin Crampton Day, a principal with Denver-based agency Schenkein. Braithwaite sees some CEOs still shying away from this kind of preparation because it conflicts with their nature - CEOs normally emphasize the positive aspects, and don't like hearing about things that could hurt their companies, he argues. Others say, though, that forward-thinking CEOs have gotten the message. "The traditional crisis tools are now a part of everyday business decision-making," says Thomas Barritt, an SVP and global director of issues and crisis management with Ketchum. "CEOs who are passionate about their company's leadership positions will embrace crisis management," he says. "The companies that do crisis management well are very nimble." ----- Firms forge ahead with crisis tools Some agencies have responded to the changing crisis environment and the increase in risk by developing new crisis tools targeting corporate clients. Hill & Knowlton recently unveiled its new threat-readiness audit product designed for companies that haven't reexamined their crisis planning the past two years or more. The audit considers more than 300 factors to evaluate a company's preparation for a crisis, twice the number it previously examined. "What we were doing wasn't enough" in today's crisis-rich environment, explains Richard Hyde, director of H&K's US crisis communications group. The latest audit looks at issues such as security, humanitarian recovery, and early warning systems, as well as the clarity and quality of company messaging during a crisis. "The release has been moved up by events as much as anything else," Hyde confirmed. Meanwhile, Weber Shandwick has developed what it dubs the Global Issues Prediction System. The offering monitors a number of news and information channels globally, providing clients with a color-coded early warning system for potential crisis situations, according to Jack Leslie, Weber Shandwick chairman.

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