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The Importance of Crisis Communication: What Lessons Did We Learn from Tylenol and Exxon?

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The Importance of Crisis Communication: What Lessons Did We Learn from Tylenol and Exxon? The Importance of Crisis Communication: What lessons did we learn from Tylenol and Exxon? A thesis submitted to the Miami University Honors Program in partial fulfillment of the requirements for University Honors by Katharine A. Szczepanik December 2003 Oxford, Ohio Contents Index of Figures............................................................................i Introduction...................................................................................ii 1. What is Crisis Communication?..............................................1 The Rise in Public Opinion.......................................................................1 What is a Crisis? .......................................................................................5 2. Guidelines for Crisis Communication ....................................11 Form the Team.........................................................................................11 Crisis Audit ..............................................................................................14 The Crisis Communication Plan ..............................................................18 The Spokesperson ....................................................................................21 Activate Crisis Management....................................................................22 Reveal Your Own Bad News At Once ....................................................23 Stick to the Facts......................................................................................27 Structure the Command Post ...................................................................29 Conduct Necessary Fact Finding .............................................................31 Speak With One Consistent Voice...........................................................32 Log All Calls............................................................................................33 Maintain Credibility and Continue to Take Action ................................. 35 Evaluate....................................................................................................36 3. Tylenol: Crisis Communication Plan in Reaction to Cyanide Tampered Capsules in 1982...........................................................................40 Company Background ..............................................................................41 The Crisis..................................................................................................42 The Response............................................................................................43 Reasons for Success..................................................................................52 4. Exxon: Crisis Communication Plan in Reaction to the Exxon Valdez oil spill in 1989 ..................................................................................68 Company Background ..............................................................................68 The Crisis..................................................................................................69 The Response............................................................................................71 Reasons for the Communication Disaster................................................86 5. Conclusion...............................................................................106 6. Bibliography ............................................................................117 ABSTRACT “THE IMPORTANCE OF CRISIS COMMUNICATION” by, Katharine A. Szczepanik Organizations are finding public opinion increasingly important with the advances in technology and public access to information. Public support is especially important when handling a crisis. The public can either turn against an organization and harm its credibility and reputation, or it could provide support and assist in efforts to solve the crisis. Proper communication during a crisis is necessary to gain public support. Organizations that meet crises unprepared, such as Exxon, fail to address the importance of public perception and damage the company’s reputation. However, companies like Johnson & Johnson are proof that being prepared and being responsible for the public’s safety can enhance its credibility and its aid in financial recovery. This thesis provides an in-depth look at the important principles of crisis communication. It takes a look at the different guidelines suggested by experts in the field of public relations and takes into account examples of where these guidelines have worked. Two case studies examine the difference in how proper crisis communication can be a success and how the lack of crisis communication can be a disaster. The first case study looks at the cyanide-tampered capsules in 1982 and the response of Johnson & Johnson’s crisis team. The company’s corporate responsibility and preparation guides the crisis team through effective strategies in their communication. The second case study examines Exxon’s response to the Exxon Valdez oil spill in 1989. Despite the existence of a contingency plan, Exxon’s executives lacked the preparation and guidelines for proper crisis communication. The ignorance towards public perception and poor communication skills left the company with a tarnished reputation and legal problems that continues even today. The thesis concludes with the key components for successful crisis communication. It also emphasizes the fact that crisis communication lies beyond a written document. Crisis communication is part of a vision that works toward the purpose and goals of that organization. Acknowledgements This thesis would not have been possible without the help and assistance of a few people. I would first like to thank Dr. Marjorie Keeshan Nadler from the Speech Communication Department for all of her help. As my advisor she kept me going with helpful insight and feedback. She boosted my confidence and reminded me why I was so committed to getting this written. Without her, I don’t think I could have even started this project. Holly Wissing, director of news and information at Miami University, also deserves recognition in helping me with the thesis. I would like to thank her for her knowledge of crisis communication and her willingness to share it with me during the busy weeks of the strike at the university. In addition, I would like to thank Kelly Blazek from the Attractions and Events Task Force at the Greater Cleveland Sports Commission. Kelly worked with General Electric’s crisis team and wrote its crisis communication plan. She shared her knowledge of crisis communication with me and gave me insight into the world of public relations this past summer as my boss. I would like to thank her for everything she has taught me. I would also like to thank my readers, Bill Brewer and Carrie Krysanick, who probably have better things to do with their time than read over one hundred pages on crisis communication. The time and input means a lot to me. Last, but not least, I would like to thank my family and friends. All I can say is that I would not have my sanity if they were not there for me. Index of Figures Figure 1.1 Common Types of Crises .............................................................8 Figure 2.1 Crisis Audit 1................................................................................16 Figure 2.2 Crisis Audit 2................................................................................17 Figure 2.3 Telephone/Mail Log .....................................................................34 Figure 3.1 Johnson & Johnson Credo............................................................46 Figure 4.1 Did Tylenol and Exxon follow the guidelines?............................107 i Introduction September 11, 2001 at around 9 a.m. the world seemed to stop for a moment. It was as if things stood still in the absolute shock of what just happened. Almost everyone watched the news as if in a trance trying to make sense of the images. It was like a brick smashing into the delicate bubble of society. Many of us just sat there; our plans for the day no longer mattered. The agenda for the day changed across the country, but not everyone could just sit there in the silent reflection of the tragedy. As chaos descended upon the nation, the Department of Defense public affairs office had to step up and take control to handle the situation. It had to fulfill its role and follow a set of “Principles of Information,” which state, “It is Department of Defense policy to make available timely and accurate information so that the public, the Congress, and the news media may assess and understand the facts about national security and defense strategy. Requests for information from organizations and private citizens shall be answered quickly.” (Hayes, 2004, p. 377) However, the office for coordinating and setting policy is located in the Pentagon – one of the sites of disaster. The Office of the Assistant Secretary of Defense for Public Affairs was responsible for the communication following this attack. As they moved to a nearby Citgo gas station, the senior public affairs staff set up their objectives: • Contact all of the staff to determine their status and safety. • Reconstitute press operations in an alternate location. ii • Coordinate a set of clear messages with senior Department of Defense and administration officials. • Ensure that photo and video documentation teams were functioning. • Engage the internal information resources from the Department of Defense public affairs
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