We have been witness to two major corporate crises in the last weeks. The first, Samsung, became infamous when the battery of its Galaxy S7 Note mobile phone started exploding into flames– just prior to its nemesis’ launch of the iPhone 7 no less. The second, Wells Fargo, resulted from a long-running scheme by some 5,300 employees to meet aggressive sales goals by opening millions of bogus accounts in the name of existing customers. [The CEO of Wells Fargo, John Stumpf, is getting grilled on live TV news by angry members of Congress even as we publish this post.]
Despite both companies being leaders in very different markets and their respective crises differing significantly in nature, they nevertheless share an important common theme: their crisis communications teams were put under incredible pressure to adequately stem the damage caused to their reputation, revenue and market valuation. Clearly some their efforts came up short as Samsung saw over $25 billion drained from its market capitalization in just under two weeks while a 7% drop in shares toppled Wells Fargo from its position as America’s most valuable bank in only 10 days.
Below we look at the four primary demands a crisis communications plan should be able to address if designed and implemented properly, and we give a short verdict on the state of each company’s crisis comms strategy.
You need to act fast
Is the need for rapid communications in a crisis a common place if it does not involve the loss of life and/or property? It depends. Having the communication protocols ready for fast communication takes a team of well trained and equipped communication professionals who know exactly what their respective roles are when time is short and the pressure for accurate information is greatest. Gone are the days of the ‘golden hour’ that would in theory allow you to prepare for the first inbound media questions. By the time your crisis communications staff is aware of the event the first tweets are being published and the Internet is primed for a viral reaction.
You need to talk with one voice
One of the greatest challenges facing crisis communications professionals is how to explain the crisis to your stakeholders. Each company spokesperson must have answers to questions about the crisis using the same playbook. The last thing you want is for one spokesperson to say one thing only to be contradicted by another later the same day. Not speaking with one unified voice erodes the credibility your stakeholders have in how you are managing the company and could also exacerbate the damage to the company’s reputation and ability to quickly bounce back.
Talking with one voice also means projecting empathy toward the stakeholders lest you give the impression your company does not value them. Consistency across communication functions is also critical as you manage stakeholder expectations. For instance, how you talk to the investor community is different than your workforce, yet they both must reflect the same core facts and message. Consistency in messaging requires razor-sharp discipline supported by cross-functional collaboration and real-time information, which are hallmarks of a well-designed and practiced crisis communications plan.
You need to listen
The act of listening during a crisis is your secret weapon. Sadly, it’s something that many companies forget to do. To be completely prepared to meet the challenges of a crisis you also need the resources in place to listen, including the staff ready to process information and adapt a communication strategy to a dynamic situation.
For instance, how are your stakeholders responding to your messages? Do you need to adjust your message or take executive action to counter a surge in negative investor or consumer sentiment? Intensive media monitoring will enable you to track responses in near-real time and give your communications team the feedback it needs to quickly react to fault-lines in the crisis communications strategy. And don’t forget that monitoring traditional media is no longer sufficient. You have to account for reactions in social media on the part of a wide range of stakeholders: tweets from activists, Facebook Live video reports from ‘accidental journalists’, Reddit posts about first-hand reports or just good-old fashioned brand bashing.
The trick is figuring how to to weave a narrative using a vast network of communication threads. This is not something you can expect to figure out on the fly without a plan and plenty of practice.
You need to communicate through all channels
The number of touch points for a company has ballooned in recent years. No longer can we assume that a dedicated crisis phone line and email will suffice. Layers of communications will need to be disseminated across an ever expanding list of communication platforms. Did anybody think Snapchat would be a viable communication channel three years ago? Moreover, those who are responsible for each platform must be kept in the loop as information comes to light and needs to be shared with one consistent message across all channels. If a key piece of information comes to light or a decision is made by executives (when, for example, Wells Fargo decided to fire 5,300 employees involved in its bogus account scandal), don’t you want that information to come out not only through traditional media outlets but also through your company blog, social media accounts and customer service team as well?
We’re happy to report that both Samsung and Wells Fargo rose to the occasion with their crisis communications efforts, ticking most of the boxes mentioned above. Not all has been perfect or gone “according to plan,” however. Nor is that even possible given the real world is vastly different from what can be planned in advance. Samsung, for instance, could have been clearer in how it communicated the recall of the Galaxy S7 Note in some of its markets. And then you have Wells Fargo’s bungled strategic messaging, which laid the blame squarely on the 5,300 employees it fired; a New York Times article quickly shot down that narrative with quotes from ex-employees saying the problem was systemic and a decade in the making.
Nevertheless, those lapses should not divert attention from their overall professional crisis communications performance.
Both companies have (so far!) handled their respective crises in commendable fashion. Not that exploding batteries and bilking customers out of millions is commendable; clearly they are not and hence the crises. But the work they have done up to now is a result of having a comprehensive crisis communications manual. A good communications manual will address some (but not all) of the following:
- Roles for each key player (from the CEO down to junior communications professionals);
- Crisis resources: dedicated crisis command center, phone lines and other technology resources, food and sleeping arrangements, etc.
- Spokesperson selection, training & briefings
- Press conference mechanics
If this sounds like a heavy lift for any companies not in the illustrious Fortune 500 category, then you are right. But the good news is that you don’t have to have the resources of a Fortune 500 company to create a solid crisis communications manual. Nor do you need a huge team of communications, social media and customer service professionals to manage a crisis. A few well-trained professionals can do wonders for most small and mid-sized companies.
Companies approaching a billion dollars in annual sales with operations either across the U.S. or the world will have to scale up their resources to meet the communication needs of multiple markets.
Free Crisis Communications Manual ready to use!
Manzer Communications has made it easy for your company to begin preparing for a future unknown crisis. Our free white paper “Writing the crisis communications manual” is available for download and use by your communications team to customize for its own unique needs. The manual lays out step-by-step how to build out your crisis communications plan. It gives you examples of training scenarios to use in workshops, drills and simulations. It even provides you a sample table of contents to help you build out your comprehensive manual.