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Crisis Management Special Report Introduction

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Crisis Management Special Report Introduction PR News Crisis Management Special Report Introduction ISSN 1546-0193 Editor, Seth Arenstein, 571.236.2896, [email protected] We’re on fairly solid ground in this special report on crisis management. Unlike some topics in Editorial Director, Steve Goldstein, 212.621.4890, PR, social media, for example, where the tactics and platforms change almost as soon as an [email protected] Managing Editor, Ian Wright, 212.621.4917, article is written about them, the fundamentals of crisis management move much slower. [email protected] Assistant Content Manager, Mark Renfree, 212.621.4807, [email protected] That means all you need to do is master the tactics and strategies laid out in these Director of Marketing, Laura Snitkovskiy, pages and you’ll be set for anything. Seems simple, right? 301.354.1610, [email protected] VP of Marketing, Amy Jefferies, 301.354.1699, [email protected] Well, not exactly. Social media (there it is again) has changed the playing field in crisis management, too, mainly Assistant Marketing Manager, by speeding up the game tremendously. Warren Buffett famously said a reputation built over the course of 20 Rachel Scharmann, 301.354.1713, [email protected] years could be ruined in 5 minutes. Brands hardly get 5 minutes anymore thanks to social media, says Torod Nep- Marketing Assistant, Jessica Placencia, tune, VP of communication at Verizon. A crisis spreads in the time it takes to compose a Facebook post, he says 301.354.1641, [email protected] SVP Group Publisher, Diane Schwartz, 212.621.4964 (see page 6). 28% of crises rebound around the globe in 1 hour, according to Freshfields Bruckhaus Deringer and Division President, Heather Farley MWWPR, but it takes the average brand 21 hours to respond to a crisis. “60 seconds is the new first hour,” says President & CEO, Don Pazour Graphic Designer, Tara Bekman Careen Winters, EVP and global corporate reputation practice leader at MWWPR (see page 4). The fallout is equally troubling: 12 months after a crisis more than half of companies had not seen share prices regain pre-crisis levels. PR News ADVISORY BOARD Paul Argenti - Tuck School of Business at Dartmouth There are other issues beyond speed. The number of brands mishandling crises leads one to believe that a central Ned Barnett - Barnett Marketing Communications tenet of crisis preparation, having a crisis plan in place, is being ignored for the most part. Mary Buhay - Gibbs & Soell Neal Cohen - APCO Carol Cone - Edelman Peter Debreceny - Gagen McDonald At PR News Pro, we looked into this supposition in mid-March 2016, along with our partners at Nasdaq Public Rela- Chris Hammond - Wells Fargo tions Services. We found nearly 50% of communicators surveyed said their brands lack a crisis plan; 12% said they Mike Herman - Communication Sciences Larry Parnell - George Washington University were unsure. Face it, when a communicator’s unsure whether or not the brand has a crisis plan that’s tantamount to Mike Paul - MGP & Associates PR Deborah Radman - Senior PR Consultant not having a crisis plan. This lack of preparation shows in how some brands react when an incident erupts. Brenda Siler - Best Communication Strategies Helene Solomon - Solomon McCown Mark Weiner - PRIME Research Just in the past few weeks we’ve seen Wells Fargo bungle a situation involving several million false savings and Mary Wong - Office Depot PR News BOARD OF CONTRIBUTORS credit card accounts. What makes it more puzzling is that the situation was brewing quietly for years before it Dave Armon - Context Optional Andy Gilman - CommCore Consulting erupted onto the front page. For example, the bank fired more than 5,300 employees during a five-year period Bruce Jeffries-Fox - Jeffries-Fox Associates Angela Jeffrey - VMS leading up to the September 2016 news stories about the accounts. Yet Wells Fargo and its CEO, John Stumpf, Richard Laermer - RLM Public Relations seemed unprepared when asked about the situation. Richard Levick - Levick Strategic Comms Ian Lipner - Lewis PR/YoungPRpros Tom Martin - College of Charleston Katie Paine - KDPaine & Partners Shortly after a period where the bank refused to comment, a statement was drafted, although Stumpf’s name was Rodger Roeser - The Eisen Agency absent and its tone was more factual than apologetic. When he eventually spoke to the media, Stumpf insisted Lou Thompson - Kalorama Partners Reid Walker - T-Mobile Wells Fargo’s culture was fine; it was a case of a few bad apples, he said. Critics questioned how more than Group Subscriptions — Laura Snitkovskiy, 301-354-1610, [email protected] 5,000 employees could be described as “a few bad apples.” Additional Copies & Article Reprints — Contact Wright’s Media, 877-652-5295; Stumpf essentially repeated this line to congressional committees. Members on both sides of the aisle who were [email protected] primed to score points with voters pilloried him. Stumpf was gone as CEO in a matter of weeks, although the re- sults of an ongoing investigation into the matter eventually might cost him some of his ample retirement package. Published weekly by Access Intelligence, LLC 9211 Corporate Blvd, 4th Fl, Rockville, MD 20850 Just weeks after Wells Fargo news burned on all forms of media, a major tourist attraction in Australia, Dream- Client Services: Phone: 888.707.5814 • Fax: 301.309.3847 world, bungled the aftermath of an accident on one of its rides. It was awful that four people were killed on the e-mail: [email protected] ride, but the theme park’s owner’s senior leaders absence for several days worsened the situation. When the New York Editorial Office: 40 Wall Street, 50th Floor, New York, NY 10005 owner’s high-profile CEO, Deborah Thomas, finally met the press, she came with a just-approved $800,000 per- Phone: 212.621.4900 • Fax: 212.621.4800 formance bonus and a faulty claim. She said the company, Ardent Leisure, had contacted all the victims’ families. Subscription/Renewal Coupon A reporter challenged her during the press conference; the journalist said a family watching the press conference ❍● I want to subscribe to PR News for $1,148.97/ on TV was outraged. The family had never been contacted. It was yet another miscue during an awful week. year or $2,196.97/2 years, and receive weekly issues plus unlimited access to the online premium content and archives. The tips and tactics concerning crisis, many of which are reiterated in this report, are obvious. Equally obvious is Name:____________________________________ Title: _____________________________________ that if brands and brand communicators do little to implement these lessons, very little good will be the result. Organization: _______________________________ Address: __________________________________ City: ______________ State: ____ ZIP: __________ Phone: ________________ Fax: _______________ Email: ____________________________________ ❍● I want to renew my $1,049 or $1,998 subscription to PR News. My account number is: _____________________________________ Charge my Card No.__________________________ Exp. _________ Signature: ___________________ Seth Arenstein ❑■ Check enclosed (Payable to Access Intelligence, LLC) In MD add 5% tax. Postage and processing add/yr: Editor, PR News $20 within U.S., $99 outside U.S. Fax to 301.309.3847 For subscribers only: full access to PR News Twitter: @skarenstein article archives at www.prnewsonline.com © 2016 by Access Intelligence, LLC. Federal copyright law prohibits unauthorized reproduction by any means and imposes fines of up to $100,000 for violations. How PR Pros Can Anticipate Crises at Their Own Organization By Seth Arenstein here’s good news and bad news when All Is Not Lost: Still, Neptune is upbeat. As a it comes to managing crises in the communicator “you already know where 90% of digital era. On the upside, brands are the crises” that will touch your business are, he able to reach their stakeholders directly said. “If I ask you to name the three areas where via social and there’s never been a you think there will be a crisis at your company Ttime when it was easier to monitor and listen to I’m sure you’d be able to name them,” he the conversation between brands and customers. added. That’s because communicators “work Yet digital technology can spread word of crises, in the shadows,” between a brand’s various accurate or not, around the globe within seconds. departments and so are well placed to know The five minutes that Warren Buffett once said it where potential crises loom, Micheline Tang, takes to ruin a reputation is no longer the case. It’s director of communications at the law firm King now been reduced to the time it takes someone to & Spalding, said at the workshop. “We’re the create a Facebook post, Verizon’s VP, corporate great synthesizers” since we work with all parts communications Torod Neptune said at PR News’ of the company…this makes us invaluable,” Crisis Management Workshop Oct. 19 in New York. said Neptune. 3 As such, “[Communicators] should lead in a crisis… Prepare and Pack Heavily: Where the two we deal with all the teams and manage relationships” disagree slightly is on preparation for crises. between them, he said. In addition to knowing where Neptune advocated having a plan in place. potential crises reside, “We know the protocols [for Tang opts for a “packing list” that anticipates crisis management], the chain of command…others the many things you’ll need to react to crises, [outside of communications] at your company might including: press releases, timelines, media not know these things,” he said. contact numbers, media kits, lists and contacts Listening and the for industry gurus/influencers, logos, call Ivory Tower: Another forwarding instructions for receptionists, proxy important function for statements, B-roll, emails of politicians, union communicators, the two leaders, etc. agree, should be monitoring Tang suggests the social conversation, formulating such lists and via Google Analytics and updating them through other tools, so they should periodic visits your brand’s Torod Neptune, be most attuned to the domestic and international VP, Corporate climate and “anticipate offices.
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