Learning how to face a crisis

Anyone who runs a company must be ready to handle a real crisis at some point.

Just ask some of the Boeing, Facebook, Wells Fargo, Equifax, United Airlines, Tesla, Chipotle executives and any other company that is dealing with #MeToo accusations.

“It is a matter of when (it will come), not if (it will),” said Deborah Hileman, CEO and General Manager for the Institute for Crisis Management.

It is hard to predict when and how a crisis may occur. It may come from a human error, negligence, a malicious agent, or mother nature; and it can take many forms: health and safety problems, fraud, sexual harassment, racism, financial cover-ups, environmental disasters, data breaches, a viral video of an employee mistreating a client… and the list goes on and on.

No matter the cause, managing a crisis is always difficult. However, poor management can make things 10 times worse.

Hileman conducts a vulnerability study for clients who wish to proactively plan a crisis management, in the event one occurs. She studies the culture of the company, examines the business operations, and discovers what keeps the company’s executives awake. The CFO is concerned about something different than the Manager of Operations, who is in turn worried by something different than the HR Manager, she stated.

Whenever a crisis occurs, the company leadership must be ready to deal with the situation in a coordinated manner.

But it is easier said than done. “Communications in crisis are not automated. It is an art,” said Ronn Torossian, CEO of the PR firm 5WPR.

Even with a pre-established plan, each situation will call for immediate decisions, especially when something is being developed in real time on Twitter or Facebook.

“With social media, you must be ready to respond within minutes, not days,” said Hileman.

Put the right person in charge (hint: not necessarily the CEO)

Ideally, long before the crisis arrives, a company will have developed a crisis management team that includes people of different functional roles.

The best person to lead the team when a problem arises depends on the part of the business involved. E.g., the communications manager could lead the charge in a reputation crisis. If there is a problem with security protocols, then the operations manager could be a better fit.

“Ideally, the crisis team leader is not the CEO, especially in larger companies, because the CEO should focus on running the business.”

But the team must stay in direct contact with the CEO to provide guidelines and updates.

In addition, there is a chance the CEO is not always the best public face for a company in crisis.

“[Sometimes] it is better to step down and put an expert in the area, rather than a CEO who has no experience with the media or in the area,” stated Hileman.

The same thing happens if the CEO is not empathic. One example, said Hileman, is the former BP Oil CEO, Tony Hayward. Five weeks after the explosion of the company’s oil platform in the coast of Louisiana, which caused the death of workers and contaminated fishing waters, Hayward said: “There is no one who wants this to end more than me. I want to recover my life.” Only a couple of months after the spill, he took some time off to attend a yacht race.

“When the CEO makes a mistake, where do you go?” Said Hileman.

But a CEO must be ready to be the face of a crisis when it comes to the core business, stated Torossian. “But, even then, things can go very wrong.”

Do not hide the truth.

If you do not tell the truth, the truth will come out and your company will look even worse.

Wells Fargo former CEO John Stumpf tried to blame thousands of employees for creating fake accounts under the name of customers. It turns out that the account scandal arose from the extremely aggressive sale targets from the company, and a toxic culture.

The scandal of Volkswagen emissions is another warning.

The company first attributed the results of the suspiciously favorable emission tests to errors. When there was strong evidence to the contrary, they finally admitted having cheated on the tests, but said there was no indication that high-level executives knew about the decision of cheating.

Since then, the CEO has been accused by US federal prosecutors for allegedly being aware of the cheating, and the US Securities and Exchange Commission (SEC) is suing the company for “massive fraud”, arguing that high-level executives hid the emissions scheme when they raised hundreds of millions of dollars in bonds.

Sometimes, company spokespeople can lie involuntarily because they feel pressured to give an answer, even if they are not sure what really happened.

In this case, it is always much better to say: “I do not know now, but I will give you the answer,” said Torossian.

And you need to reassure the public that your organization will conduct an investigation, stated Hileman.

Do not ignore the problem

Not dealing with a well-known problem quickly may be counterproductive.

Hileman cites the theft of nearly 146 million American personal data from the credit report agency, Equifax. The company later admitted that hackers found a vulnerable spot in their systems that the company already knew about two months before the attack.

Burying your head in the sand is also a terrible strategy.

“I have seen shocked CEOs thinking that if they can avoid a phone call, the problem will disappear,” stated Torossian.

He has also dealt with CEOs who think that lawyers and the media are not a priority over their meetings. “The crisis does not wait for you. It does not care if you are in meeting hours or if it is your wife’s birthday.”

His advice: “You must take threats and commotion very seriously.”

Keep control of the narrative

Being the first to publicly respond to a crisis and act quickly to contain the consequences is essential.

If you don’t, others will shape your history so that your business looks worse.

After the second fatal accident in less than five months of Boeing’s 737 Max 8 aircrafts, the company waited for almost four days before requesting that all 737 Max jets be left on the ground. That was only after many other countries applied the measure not to fly those aircrafts and after Boeing CEO called the US President, Donald Trump, to ensure the safety of the plane.

Although Boeing may have been waiting for more definitive information about the causes of the two accidents which caused the death of 346 people in Indonesia and Ethiopia, the wisest thing to do would have been to suggest that planes were suspended earlier, said Hileman and Torossian.

Instead, the company gave the impression that it was more concerned for its overall balance than for public safety.

By: Jeanne Sahadi

Source: expansion.mx