Do the Rules of Crisis Management Change When Terrorists Strike? (1996)
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Do the Rules of Crisis Management Change When Terrorists Strike? (1996)

What are the rules of crisis management in an age of personality journalism, and how do they change if your company is the target of a terrorist attack. Sam Ostrow explored these issues in a 1996 speech.

Paul Holmes

In this era of personality journalism, in which cor­porate executives are judged as much by their per­sonal media style as by their performance in man aging companies, a highly public crisis is the ultimate professional challenge. A critical issue in the public evaluation of Exxon’s response to the Valdez spill was that nobody sensed that Exxon’s chairman was person­ally involved in managing the situation. The Upjohn Company’s defense of its sleeping pill Halcion was going pretty well until its CEO began to sweat in front of “60 Minutes” cameras. And, of course, Wayne Calloway, CEO of Pepsi, became a hero after his adroit handling of allegations about product tampering, while TWA’s Geoffrey Erickson was roundly condemned for not making himself immediately available when Flight 800 crashed.
One aspect of living in this era is that, if effective crisis management elevates an executive to stardom, then fac­ing down a terrorist threat or terrorist act surely puts one in the ranks of the true superstars. Fortunately, this is an arena in which very few American corporations and exec­utives have experience. But many of the lessons learned from hundreds of corporate crises are valid in the terror­ist attack situation, although more intensely so.
Let us begin with some realities of the crisis manage­ment situation that are very hard for most corporate managers to accept.
First, you may not think it’s a crisis. Your staff may not think it’s a crisis. Even the people directly impacted may not think it’s a crisis. But, if the media say it’s a crisis, it’s a crisis. Second, once the media declare it to be a crisis, you’re play­ing by their rules, none of which they have ever written down. And third, once your company becomes involved in a media-declared crisis event, there is no “winning.” Your goal must be to exercise your crisis management responsibilities (as defined by media rules) sufficiently well to retain the public trust neces­sary for your normal public commu­nications to be accepted once the crisis is over.
What are the media rules? Ever since the first Tylenol tampering incident in 1982, the media have consistently expected corporations confronting crises, to address four issues, and four issues only, and to do I so in this order.
First, for each potentially impacted audience, define the risk. “The poison in the pill will make you sick.” “The plant shutdown will keep you out of work for five days.” “The recall will cost the stockholders $100 mil­lion.” When you don’t know the magnitude of the risk, define it broadly. As the risk narrows with time and knowledge, it creates the appearance of the situation being managed.
Second, for each risk defined describe the actions that mitigate the risk. This may be something for the compa­ny to do (“We are recalling and replacing the product”); something for the individual to do (“Don’t take the pill”); or simply, “We’re studying it and then nothing to do until we know.” Our experience tells us that if you do a credible job of defining the risk, the public will follow your mitigation directions, even if the action required is fairly significant.
Third, identify the cause of the risk. There are two reasons you want to do this. First, for whatever reason, the public believes that if you know what went wrong, it will be fixed and won’t happen again. That’s why we all get back on airplanes after a crash; we really believe they’re checking the engine mounts more closely and have redesigned the cockpit to eliminate “pilot error.” The second reason is that the highest rated shows on televi­sion are mysteries. If your company helps identify the cause of your prob­lem, the moral equivalent of fingerling the perp, you will see more balanced coverage because you’ve shown your willingness to play the media’s game.
Fourth, and in some ways this is simply the sum of the other three, demonstrate responsible management action. Simply put, be in control, compared to the media, compared to the so-called experts, and particularly com­pared to- whatever may have initiated the event. This is not just a matter of style, but of content, of communi­cating consistently that your company has a plan to respond to the incident and that it is that plan that is now directing events.
And address each of these issues in a ten-second sound byte. In 1980, the average television sound byte was 27 seconds. By 1985 it was down to 17, and in 1992, it was only eight. The networks have decided that the average American has the same attention span as a five year old, and that in a nine-to-ten second peri­od, an executive can tell all of his or her publics all they need to know about a crisis that could be affecting their lives and those of their loved ones.
Ultimately your crisis is just an element in the vast business of keeping the American public entertained, and your spokespersons have to measure up to some of the most highly paid entertainers of our era, in this case matching expectations of style created by the entertain­ment media.
If that sounds too cynical, remember that within min­utes of the attack on the World Trade Center in New York, WCBS - the only local TV station to remain on the air - christened the event Terror at the Towers, had its lead staff announcer intone the title, in his best “voice of God” imitation at every break, and had the art depart­ment develop a logo to cover the voice. The recent crash of TWA 800 had its own theme music on MS/NBC with­in half an hour of the first reports of the crash.
It is also important to recognize how the public responds to companies in crisis. When a company is involved in a controversial issue, approximately 10% of the public doesn’t care what is said, done, or alleged. They love the company and will go on loving it whatev­er happens. Another 10% automatically believe that the company was wrong, is wrong, and will always be wrong, and nothing it says or does will change that. The remaining 80% is going to give the issue no more attention than is necessary to decide whether the com­pany is being reasonable and acting to the standards the media have defined for companies in similar situations. That, frankly, takes very little time.
To apply the principles we’ve discussed so far to a not so hypothetical scenario: Assume that you work for a pharmaceutical company. Your top research team is working on a treatment for severe head and spinal trau­ma. One morning, they arrive at the lab to find that the monkeys being used in the FDA-required safety test have been killed by injections of poison, and a placard has been posted on one of the cages saying, “They’ve suffered enough,” signed by the Animal Liberation Army. As a result of the attack, the project to develop the drug has,been delayed at least three years at a cost of $150 million, assuming the drug can still be approved before its patent expires. At noon, you receive a call from “NBC News.” They have a tape from the Animal Liberation Army showing the monkeys’ heads being smashed so they can be used in the experiment. They want to interview your CEO.
The first crisis communications decisions you have to reach are, Who are the critical audiences, and, In what priority should they be addressed. Is it the general public, who will visually compare your CEO in his $1,000 suit to a monkey whose head was smashed by your white coated scientists? Is it the families of people who have suffered traumatic head injuries, for whom this drug was a major hope? Is it your stockholders? After all, it’s their $150 million.
The next decision is, What are the key points for each audience? Remember, the media treat those audi­ences as if they have a five year old’s attention span. Maybe two messages tops.
Third, Do you let the NBC crew into your lab for the interview to show how humanely you handle your animals, even though that’s against FDA regulations?
Fourth, who speaks for the company? The CEO? He has lots of currency. But will using the CEO raise the importance of the incident?
Fifth, does the company’s statement require any clearances? If your company has an Animal Studies Bioethics Committee, it probably does. Suppose the drug is licensed in from another company, do you have to clear the statement with them?
And, sixth, are authorities restricting what you can say in any way? The FDA won’t allow camera crews in labs. Will the SEC restrict the way a publicly held com pany describes the loss? Is it politic to bring up patent issues when you know the company is seeking an exten­sion because of a minor reformation of the product? Is it politic to bring it up when you that know you plan to charge $2,000 per dose, but that generic companies could make and sell it profitably for less than $200, and the President has a niece with a skull fracture?
These decisions come from what we call Decision Priorities, a must for any crisis management system. Decision Priorities won’t give you the right answers to any of the priority issues you must resolve. Only experi­ence and judgment, gained from live experience and real­istic drills can do that. But, Decision Priorities will assure that every issue is considered and that in a post-event ret­rospective, neither your Board, your stockholders or the media will say, “If they’d only thought of that…”
What would we recommend in the circumstances? Send out a senior physician working on the project. Give her the following statement: “The tragic incident in our laboratory will delay our knowing for sure whether we had a safe and effective breakthrough for the head injuries that maim hundreds of thousands of Americans yearly. [define the risk.] We will work with the FDA to determine if the test can be repeated on a faster basis, or conducted in other, lower species of ani­mals [actions to mitigate the risk]. Our Animal Research Bioethic Committee, which includes members of animal rights organizations, reviews all of our research procedures to ensure that they are done as humanely as possible while meeting our primary obliga­tion to advance human health [demonstrating responsi­ble management action].”
This statement is written so that each sentence could be used independently as a sound byte and still get across a key point. Likewise, each sentence is designed to demonstrate corporate empathy with the general public’s feeling that research animals must be treated humanely, while the overall priority audience is clearly the patient community. And finally, the statement never addresses the issue of the ALA tape. (Although if you know it to be a phony, say so, say so often and say so expressly and in clearly delineated sound bytes.)
Now let’s apply some of the principles and processes of crisis communications generally to the specific issues almost invariably raised in the terrorist attack situation.
First, and most important, is to recognize that Americans still tend to consider, a terrorist attack on a specific site or company as an attack on all of us. This was a true for the World Trade Center attack as it was for the individual who had a grievance against McDonald’s and killed 22 children. Neither the WTC nor McDonald’s was held responsible for being the focus of the terrorist incident. It simply is not as necessary to defend your behavior (usually cited by the terrorists as a rationale for their act) as many companies believe it is.
Second, the media and the public believe, rightly or wrongly, that virtually any terrorist attack could have been prevented and that there must have been an inadequacy in the security plan or practice to allow the event to occur. Because of this, we recommend that, in “identi­fying the cause of the risk,” whenever possible, the cor­poration should appear to accept some responsibility for the event. This does not require a mea culpa, but gener­ally can be achieved by an expressed commitment to change a corporate policy, person or procedure. The public thinks corporations detest doing this and that cor­porations punish themselves when they change anything.
The third special consideration in responding to the terrorist situation is that public authorities invariably will take an active role in the management of the situation, using their own Decision Priorities structures and with their own public and political communications agendas. One of the Decision Priorities we insist our clients address is, “Are the authorities impeding com­munications and must their restrictions be obeyed?”
There is no right answer. During the 1982 Tylenol tampering, the FBI gagged Johnson & Johnson for two days, fearing that too much discussion could aid the perpetrator. Finally, J&J realized it had a higher priority - to protect its good name and the name of its now suspect employees - and went out aggressively with its spokespersons. Restrictions were also placed on Pan Am after Flight 103 was sabotaged, which is one reason that the survivors group still questions the veracity of what they were told. And, the same restrictions on TWA are why their survivors group was so angered over what they thought was slow disclosure of the victims’ names.
Finally, it is critical to recognize that the terrorist act is, in its own bizarre way, an effort by the terrorist to engage the public in dialogue, through the corporation that is attacked. This is true whether the company was targeted because of the visibility of its site, reputation or logo (as in the WTC and Pan Am cases), or targeted specifically because of a corporate behavior or policy (as are chemical companies by Greenpeace or pharma­ceutical’ companies by animal rights activists). In either event, the terrorist wants the public to say something about the act, and even the expression of public revul­sion is a dialogic response.
As hard as this is for corporations to do, it is imper­ative that companies see themselves only as the medium through which the terrorist message was expressed and present themselves from that context.
American companies are fortunate in how little experience they have had with terrorist acts. The bomb­ing of Pan Am 103 and of the World Trade Center, as well as the Oklahoma City Federal Building, while of unprecedented magnitude in terms of destruction and loss of life, do not necessarily suggest an increase in the frequency with which corporations in this country are attacked, but there is reason for concern. Experts in Europe are surprised that terrorists in the environmen­tal and animal right fields have not yet exported their personnel and their methodologies here. Our food-, water- and medicine-distribution chains in this country remain incredibly vulnerable to terrorist tampering on a massive as well as individual package basis, and this tampering may be as much to express geopolitical rage as it is to address environmental, animal rights or health concerns, as we have already seen in Europe.
We have other major systems in this country that are also highly vulnerable, which makes them highly attrac­tive to terrorists as well. Transportation networks into major urban centers, electricity distribution grids, and telecommunications cables are only some examples. We also happen to believe, that in an era when the disparities between rich and poor are growing, terrorism directed at the cultural icons of the economically advantaged will increase. The WTC was clearly such an icon. But, so too are GE, McDonald’s, Nike the New York Stock Exchange and Budweiser in this country.
How well are corporations doing business here pre­pared to deal with the communications issues raised by a terrorist attack? From our experience, the average is a barely passing grade. Most companies have crisis man­uals in place, but rarely review them for adequacy against specific threats or issues, or revise their plans as issues and threats change and evolve. Similarly, few companies actually drill against the eventuality of a cri­sis or terrorist attack. Rarely do they test their ability to make communications decisions. In our experience, it is only the companies that have gone through the thinking process of crisis, as well as the mechanical process of recovery, who finally survive this ultimate communica­tions challenge.
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