JONATHAN DEDMON
THE DILENSCHNEIDER GROUP
You never want a serious crisis to go to waste.
—Rahm Emanuel
The quote above is from former Chicago mayor Rahm Emanuel, who was President Barack Obama’s chief of staff during the 2008–2009 economic crisis and Great Recession. However, similar comments go at least as far back as Italian diplomat, philosopher, and writer Niccolò Machiavelli in Renaissance Florence.
Of course, no one and no organization wants a crisis, but inevitably one will happen.
Crises come in all shapes and sizes, but generally share several attributes:
■They are unexpected.
■They have a strong emotional resonance with a company’s key stakeholders, the media, and the public.
■They evolve in unpredictable ways.
■Events seem to outstrip an organization’s ability to deal with them.
■They call into serious question the competence and quality of a company’s governance and management. For example, Dennis Muilenburg is no longer CEO of Boeing following the 737 MAX disasters.
■They pose extreme, even existential risk to an enterprise.
■They require an outsized and extreme level of communication.
As the late management guru Peter Drucker noted, “Turbulence—for those who still remember a little mathematics—is characterized by unpredictability. It is certain that the unpredictable will happen; but it is impossible to predict where, when or how.” So it is with crises.
While no organization can avoid turbulence at some point, it can keep its seat belt fastened and be prepared.
In this chapter you will learn not only how to be prepared, but strategies and tactics for when a crisis actually occurs.
BEING PREPARED
The Team
The first step is to establish a core team that can manage crises effectively right when they occur. The team should include:
■the CEO and/or COO.
■legal counsel.
■public/media relations.
Depending on the nature of the crisis, the team should be expanded to include appropriate senior executives. They could include the following leaders and department heads:
■marketing and sales
■government relations
■human resources/employee relations
■investor relations/the CFO
■international
■supply chain
■plant manager
However, it should not be too large. More than ten people is too large. Identify and notify the core members of the team, and hold a meeting before any crisis occurs.
A word about legal counsel. Counsel can be expected to ably assess the legal risk of the crisis and suggest specific actions to address it. Almost inevitably, the plaintiffs’ bar will file lawsuits for millions and even billions of dollars in damages on issues ranging from company products being linked to cancer to violations of securities laws over the nature and timing of disclosure of the issue.
You must realize, too, that there is also what could be called “brand risk” involving a range of organization stakeholders that can be extremely important to the overall strategy. For instance, corporate boycotts over specific company policies, while generally not that successful by themselves, can and do generate significant negative media and public attention that leads to change.
Boycott examples have included Chick-fil-A for its opposition to same-sex marriage, Caterpillar for selling construction equipment to Israel that was used to bulldoze Palestinian homes, and products from South Africa over apartheid.
Two of the most famous boycotts:
■The boycott of Montgomery, Alabama, city buses when Rosa Parks refused to move her seat from a Whites-only section, giving impetus to the young civil rights movement.
■The boycott of grapes led by César Chávez over farmworker pay and working conditions that eventually led to a union contract improving both.
Boycotts demonstrate the need for companies to do the right thing in the first place.
Taking Inventory
Before a crisis hits, the first task for the core team is to take inventory of the type of crises that have occurred in the organization’s past and that might occur in the future, given its business.
For instance, for an oil company it could be a major oil spill, such as the Exxon Valdez tanker off the coast of Alaska or the Deepwater Horizon oil platform explosion in the Gulf of Mexico, causing severe environmental damage and, in the latter case, deaths.
For a food company, it could be contamination of its products, either with a foreign substance or a pathogen such as E. coli, necessitating a massive product recall. Perrier’s market leadership in mineral water in the US was decimated when trace amounts of benzene, a carcinogen in significant quantities, was found in some of their bottled water.
For a clothing company, it could be a major human rights organization exposing dangerous working conditions or child labor in a developing country. More than a thousand workers perished when a Bangladesh factory producing Nike products collapsed.
The Plan
Using the inventory, compose a written plan—in advance. Make it only a few pages, not a long document that likely will then sit on a shelf. It should include:
■A brief statement to remind those involved in the crisis that the company will address the problem with honesty and transparency, act in the public interest, and have empathy for those affected.
■The core members of the team and their contact information.
■Responsibilities for communications with all key stakeholders, including logistics of those communications. (More on logistics shortly.)
■A system for liaison: information sharing with and input from the board of directors.
■A notice that the group will meet at least once a year to review and update the plan as necessary, looking for potential new clouds on the horizon.
■The company’s key brand messages.
■An appendix of contact information for other important stakeholders—employees, customers, suppliers, government officials, and so forth.
Organization and Logistics
As noted, the crisis team needs to have a logistics plan in place for communications—and for everyone to understand it. This should have a number of pieces, including but not limited to:
■The website. There should be at least a page of the latest information on the issue, the company’s position, and the ability to send feedback to the company.
■Related to the website, ensure that appropriate security systems have been established to assure nefarious actors aren’t able to hack into and alter a company’s website or access internal emails.
■How should incoming calls from different audiences be routed?
■Who is in charge of coordinating the various intelligence and feedback for senior management and the board?
■What internal and external resources are available and may need to be brought to bear?
There are many more.
WHEN A CRISIS OCCURS
Monitoring and Gathering Intelligence
When a crisis occurs, the core team and any other appropriate executives should meet to assess the seriousness of the situation.
There should be immediate and ongoing monitoring of reactions, summarized at least daily for senior management. Sources will include:
■social media, given its immediacy and reach.
■incoming media calls, and the nature and tone of the inquiries.
■employee reaction.
■customer reaction.
■any possible government involvement.
■the stock price and Wall Street commentary.
Messaging
While messaging ultimately will depend on the specific situation, the goal should be to assure all affected that the problem is being fixed aggressively and that the company is, as mentioned, responding honestly and transparently, acting in the public interest, and showing empathy for those affected. It also is a generally accepted rule that the best messaging has a strong emotional component versus simply a logical and rational argument.
In addition, while facts certainly need to be marshaled to support the company’s messages, generally the media will only use two or three quotes from the company, so the message needs to be concise and to the point.
Finally, given that all or even most of the actual facts may not be known immediately, a “placeholder” statement/message may need to be created from what information is available. Here’s an example from Air France when Flight 447 from Rio de Janeiro to Charles de Gaulle Airport in Paris disappeared over the Atlantic, killing all 228 passengers and crew on board:
Air France regrets to announce that it has lost contact with flight AF 447 from Rio de Janeiro to Paris-Charles de Gaulle, expected to arrive this morning at 11:15 local time.
The flight left Rio on 31 May at 7 pm local time. 216 passengers are on board.
There are 12 crew members on board: 3 pilots and 9 cabin crew.
The following toll-free number is available
In France: 0800 800 812, and + 33 1 57 02 10 55 outside France.
Air France fully shares the anxiety and distress of the families of the passengers concerned. The families are being taken care of in a specially reserved area at Paris-Charles de Gaulle 2 airport.
Here are some additional tips for messaging success:
■Talk from the viewpoint of your audience and to their self-interest.
■Demonstrate concern.
■Avoid euphemisms and jargon. A strike is a strike, not a work stoppage, and an explosion is not an incident.
■Don’t speculate.
■Don’t be defensive. Do articulate the company’s positive response to the issue.
■Talk in headlines.
■Protect the record. Mistakes happen. If you make a mistake, correct it.
■If the media gets something wrong, talk to the reporter and correct it.
■Tell the truth, even if it hurts.
■Don’t say “No comment.” Reporters generally are entitled to answers to their questions unless there is a reason not to answer them, in which case the reason should be stated to the reporter—personnel information, proprietary competitive information, and the like.
■Don’t repeat negative or inflammatory words used by the reporter. They could wind up as part of your quote—“I don’t beat my wife.”
Responding Appropriately
One of the most important and difficult tasks of crisis communication is deciding how to respond in a way that appropriately reflects the seriousness of the situation.
How aggressively and widely should you respond? It depends. For instance, should the company simply issue a strong statement, or instead make a spokesperson available or communicate even more proactively and aggressively?
The nature of the response is critical, in that you need to address the situation responsibly, but you don’t want to pour gasoline on the fire by making the issue larger than it is. Although this often does not succeed, your goal, while demonstrating you are addressing the problem, should be to make the situation a one- or two-day story.
The good news, if there is any, is that the rapidity of today’s news cycles means that other major stories may quickly replace yours!
Spokespersonship
One of the most important issues the team will quickly have to address in a crisis is spokespersonship. Who are the people most likely to address a problem, and at what level in the organization?
Spokespersons obviously need to have a strong knowledge of the subject matter and be strong communicators, whether in print or on broadcast. And despite inaccurate and negative stereotypes of what public relations people do, you should never spin! Also, the credibility of the spokesperson is critical. Credibility can be lost in an instant and be extremely difficult to regain.
Given the large amounts of communications that are necessary in most crises, the spokesmanship role will likely need to be triaged. For instance, for major customers and media, a senior executive is probably appropriate. For smaller-market media, a public relations person can be used or a written statement issued.
All potential spokespersons should be trained. Numerous companies and consultants specialize in training, particularly with the media. The training should include the most difficult questions a company is likely to face, so that good answers are at the ready. Training sessions obviously should be conducted in advance of any crisis.
Last, as the following section will show, in the age of social media and instant information, how the CEO is positioned and what they say is of special importance. People want to hear from the top.
THE POWER OF THE INTERNET AND SOCIAL MEDIA
The development of the internet has made news and information widespread almost immediately upon becoming available. There are now some 14 billion cell phones operating in the world, with the number expected to climb to almost 18 billion by 2024. Thanks to cell phones, incidents can be documented not only instantly but visually.
Consider the case of Domino’s Pizza. On Easter Sunday in 2009, the company learned that two employees in Conover, North Carolina, had posted videos on YouTube that showed one of them sticking cheese up his nose and then putting it on a sandwich that was to be delivered to a customer. His colleague filmed him partaking in other unsanitary acts with the food and uploaded those videos to YouTube as well. The videos immediately went viral, with “Domino’s” as a search word surpassing professional media celebrity Paris Hilton for the first time ever. The videos were actually a hoax, but few seemed to care. In addition, like the COVID-19 virus, the story not only spread widely and quickly, but evolved and mutated rapidly.
As Tim McIntyre, vice president of communications at Domino’s at the time, noted in a later interview with the Public Relations Strategist:
What happened in those first 48 hours, from our perspective, is that the story changed. The story took on almost five parts. The first story line was: Somebody’s tainting food at Domino’s. Then it became: Somebody posted a hoax video starring Domino’s. Then it became: What is Domino’s doing about it?
Then it became the critique of how Domino’s handled these rogue employees. And today, the story is: How do brands protect themselves and their reputations in the YouTube era?
For more on social media, see chapter nine, “Social Media: Evolving Best Practices for PR Practitioners.”
SOCIAL MEDIA, FAKE NEWS, AND DISINFORMATION
I’ve been in two elections. I won them both and the second one, I won much bigger than the first … It’s a disgrace. It’s a disgrace … Democrats attempted the most brazen and outrageous election theft and there’s never been anything like this. So pure theft in American history. Everybody knows it.
—President Donald J. Trump, at the January 6, 2021, rally in Washington, DC, before his supporters stormed the Capitol. (More than 70 percent of Republicans said in a poll soon after that they agreed with President Trump’s contention that he received more votes than Joe Biden.)
A North Carolina man pleaded guilty on Friday to opening fire in a Washington pizzeria that fake news reports claimed housed a child sex ring linked to 2016 Democratic presidential candidate Hillary Clinton. Edgar Welch, 28, of Salisbury, was accused of firing at least three shots from an AR-15 rifle inside the Comet Ping Pong pizzeria in December and pointing the gun at an employee after showing up to investigate the online conspiracy rumors.
—Reuters, March 24, 2017
One of the most difficult aspects of communications in a crisis today is the ability of social media to instantly disseminate not just information but misinformation, conspiracy theories, and hatred. As this book went to press, there was a major ongoing debate over online platforms, their power, and their responsibility for misinformation, false conspiracy theories, and hate groups communicating on the sites.
Social media platforms are trying to address the problem. For instance, Facebook and Twitter both banned conspiracy theories of the group QAnon as well as former president Donald Trump for spreading disinformation and inciting the January 6, 2021, attack on the Capitol.
However, the volume of communication on social media platforms makes policing disinformation challenging. There are 500 million tweets per day, or about 6,000 per second. More than 3.21 billion people actively use Facebook, Instagram, WhatsApp, or Messenger each month, and 1.82 billion people log on to Facebook daily. Algorithms can help but obviously not completely solve the problem.
Debates are also ongoing over the almost monopolistic power of Facebook and Twitter, along with Google’s YouTube, and whether the platforms have gone too far in controlling public discourse. Should private companies have so much control over public debate and comment on social media, and to what extent should they curate and moderate content to control hate and misinformation?
It is a tension that will continue well into the future.
Given these issues, how should companies respond to social media comments in a crisis? Obviously they need to monitor for comments and especially misinformation that needs to be corrected. However, Domino’s McIntyre noted that “you might not need the fire hose to put out the candle, but in the social media realm, you might want to have the garden hose handy.”
A word of caution. No matter the strength of your argument and actions you take to fight disinformation, many people online are never going to believe you.
USING THIRD PARTIES
Every major poll since the 2020s began has shown a significant decline in trust for institutions, including companies. Internationally renowned political scientist and management scholar and chancellor of Vanderbilt University Daniel Diermeier noted, “In general, people are more likely to attend to negative information than to positive information … even when they are faced with contradictory and incomplete evidence.”
That is where third parties can help create credibility around a specific situation. Third parties can include scientists, academics, think tanks, opinion leaders, and subject experts on an issue. Who are the leading experts in your industry? What is your relationship with them? How well can they be counted on? If outside experts aren’t commenting on your behalf, you can be sure they’ll be talking to the media in a crisis.
Once again, a word of caution. The best outside scientific expertise in the world doesn’t always win the day. Here is just one example in which there was strong third-party scientific evidence that in the end didn’t change behavior. Despite every reputable scientist and medical expert stating that wearing a mask could quickly control the COVID-19 pandemic, many people refused to wear them, seeing them as an infringement on their freedoms, and some even believed the pandemic was a “hoax.” This despite the fact that tens of millions of Americans were infected over the course of the pandemic, and hundreds of thousands died.
OUTSIDE INVESTIGATIONS
Another third-party strategy is the independent, impartial investigation; for example, corporate boards of directors hiring outside law firms or other consultants. The objective is to demonstrate the company’s commitment to truth and transparency, get to the bottom of the issue, and make recommendations for any changes necessary to protect and assure the public going forward.
For instance, companies have launched these types of independent investigations with outside law firms to investigate claims of sexual misconduct by senior executives. After external lawyers investigated CBS head Leslie Moonves, they found he had engaged in multiple acts of serious, nonconsensual sexual misconduct. He was forced out, then sued by the board for misleading investigators.
Outside lawyers were also brought in to investigate sexual misconduct claims against McDonald’s CEO Steve Easterbrook. The lawyers examined Easterbrook’s company-issued iPhone 10 and his iCloud account, but did not find evidence of additional misconduct beyond one consensual relationship. But when further allegations emerged, and Easterbrook’s emails and communications on McDonald’s servers were examined, additional evidence of misconduct was found. In a broader investigation, McDonald’s said lawyers ultimately found “dozens of nude, partially nude, or sexually explicit photographs and videos of various women, including photographs of … company employees, that Easterbrook had sent as attachments to messages from his company email account to his personal email account.”
While certainly not an incident McDonald’s is proud of, its statement as a result of the independent investigation is pretty good. In suing Easterbrook to claw back his severance pay based on the additional facts, the company said: “We now know that his [Easterbrook’s] conduct deviated from our values in different and far more extensive ways than we were aware when he left the company last year … McDonald’s does not tolerate behavior from any employee that does not reflect our values. These actions reflect a continued demonstration of this commitment.”
A WORD ABOUT SCIENCE—AND CUTTING YOUR LOSSES
As the COVID-19 mask example shows, science can be one of the trickiest aspects of managing a crisis. For example, Bayer’s Monsanto faced lawsuits from more than forty thousand plaintiffs alleging its weed killer Roundup caused non-Hodgkin’s lymphoma, a cancer of the lymph glands. The company paid $10 billion to settle the lawsuits, despite strong scientific evidence to the contrary. Johnson & Johnson faced more than twenty thousand lawsuits over its talc baby powder. There was one $4.7 billion verdict; while a judge reduced it to $2.1 billion, the company was forced to discontinue the popular product. Once again, there was strong scientific evidence that the product was safe.
These examples raise a point that unfortunately needs to be considered in most crises: business, like life, can be unfair. Companies, despite being on the right side of an issue and doing the right thing, sometimes continue to sustain harm. This is particularly true at for-profit companies, which many instinctively distrust. While you may believe you work for a great company, others do not. Your firm may have to decide at some point to put an end to the issue for the sake of the future—not just its own, but also those of its employees, customers, shareholders, and other stakeholders.
In such situations, the communications, whether regarding a legal settlement or discontinuing a product, will need to be handled carefully to position the decision in the right way and put the issue behind them without arousing fresh debate.
MAKING LEMONADE FROM LEMONS
The end of Rahm Emanuel’s quote at the beginning of this chapter, on taking advantage of a crisis, is: “And what I mean by that [a crisis] is an opportunity to do things that you think you could not do before.”
Crises, while not sought, can sometimes create opportunities. The gold standard in this regard is Johnson & Johnson and the fatal poisonings related to its pain relief drug Tylenol. Four decades have passed since the tragedy, in which seven people died in the Chicago area after taking cyanide-laced capsules of Extra-Strength Tylenol, the drug-maker’s best-selling product. Yet virtually every article on managing a crisis and handling the related communications cites this incident.
As the New York Times noted on the twentieth anniversary of the poisonings:
Marketers predicted that the Tylenol brand, which accounted for 17 percent of the company’s net income in 1981, would never recover from the sabotage. But only two months later, Tylenol was headed back to the market, this time in tamper-proof packaging and bolstered by an extensive media campaign.
Although Johnson & Johnson spent $100 million on the drug’s recall and relaunch, a year later, its share of the $1.2 billion analgesic market, which had plunged to 7 percent from 37 percent following the poisoning, had climbed back to 30 percent.
What set apart Johnson & Johnson’s handling of the crisis from others? It placed consumers first by recalling 31 million bottles of Tylenol capsules from store shelves and offering replacement product in the safer tablet form free of charge.
One other example of turning lemons into lemonade. San Francisco 49ers quarterback Colin Kaepernick generated major controversy by taking a knee during the pregame playing of the national anthem, to protest racial injustice and police violence against Blacks. He, and other players who followed suit, were nationally criticized as unpatriotic. Kaepernick has not been able to find work again in the National Football League after his release from the 49ers, despite demonstrating major talent.
Counterintuitively, Nike used Kaepernick in ads as part of its campaign for the thirtieth anniversary of the “Just Do It” slogan. As reported by CNBC, “a #BoycottNike hashtag soon trended on Twitter, and Nike shares took as much as a 3% hit when the campaign was announced. But online sales surged after the ad’s release, and the commercial was also met with critical acclaim, winning Nike an Emmy for outstanding commercial.” A special athletic shoe featuring Kaepernick sold out its first day.
More recently, Ben & Jerry’s ice cream unveiled a mural and billboards in honor of Kaepernick before Super Bowl LV and launched a new ice cream flavor in his name. “As we look back, it’s clear that Colin was on the right side of history,” said Chris Miller, Ben & Jerry’s Head of Global Activism, in a statement. “We wanted to be part of the effort to honor Colin’s courage and legacy because we share the same values.”
Sometimes you have to think outside of the box—although there is always risk!
TAKEAWAYS
1.Some final words, hopefully of wisdom. Don’t panic. Remain calm. Fred Friendly was the producer for the legendary newsman Edward R. Murrow, and later president of CBS News. Referring to a television studio, we recall a quote of his: “You need to keep yourself under control in the control room. There’s plenty of built-in tension, and you want others to believe you know what the hell you’re doing.” Likewise, you want to look like you are in control of events, not the other way around. Whatever the crisis, “This, too, shall pass!”
2.Rome was not built in a day, and neither is image. However, crises can quickly destroy it. In fining Boeing $2.5 billion over 737 MAX safety issues, the US Justice Department said: “Boeing’s employees chose the path of profit over candor by concealing material information from the FAA concerning the operation of its 737 MAX airplane and engaging in an effort to cover up their deception. This resolution holds Boeing accountable for its employees’ criminal misconduct, addresses the financial impact to Boeing’s airline customers, and hopefully provides some measure of compensation to the crash-victims’ families and beneficiaries.”
3.Before a crisis occurs, what is your organization doing to demonstrate its commitment to the public good, such as positive Environmental, Social, and Governance initiatives? What are the issues your CEO is articulating that will have positive resonance with the public? Do you have a culture of honesty and transparency?
4.Get all the bad information out as quickly as possible. It’s not going away on its own, and later can come back to haunt you.
5.When the crisis has passed, do an assessment of what you learned, did well, and did poorly. A famous example of this is the US Army’s major study A Study of Strategic Lessons Learned in Vietnam, which is now part of the curriculum at the US Army War College.
6.We leave our final words to Domino’s McIntyre: “Somebody equated Domino’s in the first 24 hours to a grocery store that had 30 aisles—and there was a spill in aisle five. They didn’t need to mop the whole floor because there was a spill in aisle five. I loved that analogy.
“What was happening, though, is that as we were cleaning up the spill in aisle five, it was leaking to aisles six and seven and four and three. So if anything like this were to happen again and there was a spill in aisle five, I would rope off two aisles to the right and two aisles to the left, and that would be our audience. That would include responding on our Web site a little bit faster, hitting the Twitter community a little bit faster and talking to senior leadership a little bit faster.”
7.Good luck with your crisis.