Paul Holmes 26 Dec 2004 // 12:00AM GMT
Have the rules of crisis management changed since the terrorist attacks on New York and Washington, D.C., on September 11, 2001?
That¡¦s the contention of a new report from the Len Biegel, founder and president of The Biegel Group and author of The New Realities: Crisis Management in the Post-9/11 Era, published by the Public Affairs Council.
Biegel argues that the events of 9-11 provided crisis managers with new lessons, some involving preparedness (¡§analyze all possibilities¡Xeven the improbable ones¡¨); and others involving administration (¡§crisis management is becoming a full-time job¡¨). He also makes the case changes in demographics, technology, and society at large will change the rules of crisis management even more dramatically in the years to come.
¡§If the Tylenol crisis marks the birth of modern-day crisis management,¡¨ he argues, ¡§then the events of September 11, 2001 mark the next phase in development.¡¨
Biegel begins with a definition of crisis. A crisis, he says, may be caused by natural disaster, criminal activities, or human or mechanical error, and is a generally characterized by one or more of the following:
„X Potential or actual significant harm to individuals or property;
„X An imminent threat to the ability to conduct ¡§business as usual¡¨;
„X An imminent threat to a brand or entire company¡¦s reputation;
„X Media attention¡Xeither immediate or potential¡Xthat will negatively impact a company¡¦s reputation;
„X Immediate attention is required to address the situation.
He moves on to the obligatory analysis of Johnson & Johnson¡¦s handling of the Tylenol tampering cases, reserving his strongest praise for then-CEO James Burke. ¡§Through the simplicity of his messages, compassion for every customer and the decisive action to recall the product, Burke was able to transcend the stereotype of the monolithic, anonymous corporation and limit the damage to the brand.¡¨
The Tylenol case, he says, spawned an entire sub-specialty of public affairs: crisis management.
¡§Crisis management as we know it today emerged after the Tylenol tamperings of the mid-1980s¡¨ he says. ¡§While there are no ¡¥official¡¦ standards yet for effective crisis management, generally accepted standards have evolved over several years as a direct result of the public handling of the Tylenol case.
¡§Faced with a barrage of media coverage of this crime against an American icon, public affairs professionals began reflecting almost immediately on what this all meant: Could companies prepare for a crisis? Could they all do as well as Johnson & Johnson CEO Jim Burke did in handling a crisis? Could a crisis in fact be prevented?¡¨
The discipline of crisis management soon settled on a series of best practices, Biegel says. Among them:
1. Respect the public. ¡§The public is savvy, whether defined as a certain ¡¥street-smartness¡¦ or skepticism borne of the TV and web age in which successes and failures are brought into everyone¡¦s living room or desktop. The public reacts positively¡Xmore often than not¡Xto honest, clear communication. But it also holds companies accountable if it¡¦s not treated with respect and honesty. The public¡K wants to hear that the company is concerned with the problem; that the company has a commitment to finding the facts and fixing the problem; and, that the company is willing to explain what actions are in place and on the drawing boards.¡¨
2. Be quick to communicate. ¡§Like it or not, the world is working at warp speed, and the media¡Xespecially the web-based media¡Xhave a voracious appetite for instant news. When a crisis strikes, the media want to know what¡¦s happening now. If they don¡¦t get information immediately from the company they will quickly go down other paths, including the pursuit of outside ¡¥experts,¡¦ ¡¥unnamed sources¡¦ or others for information. Once this occurs, it sets the tone for the news and it becomes very difficult for the company or industry involved to catch up, set the record straight or control the message.
3. The choice of the proper spokesperson is critical to the success of crisis communications: ¡§The best spokespersons¡K. have a title that indicates expertise and leadership to the public; [are] knowledgeable about the cause of the crisis, its impacts on the surrounding community or the broader public, and what is being done to address it; and have a high energy level so they can sustain heavy interview schedules with the media.
4. The public expects the company to be in charge of the crisis and communicate clearly, compassionately and frequently. ¡§Whether the company is the cause of the crisis or the victim of it (as in the Tylenol case), the company must take aggressive action in response.
5. Preparation pays off. ¡§Whether it is the creation of a formal crisis plan, outfitting a crisis ¡¥war room,¡¦ periodic crisis training, or running countless simulations to prepare for crises, companies have found that those who prepare have the greatest chance for gaining fast control of a crisis and successfully managing it once one occurs. Without proper preparation companies are prone to lose valuable time determining how best to respond¡Xtime that could have been used to protect the company¡¦s reputation and mitigate any negative impacts.¡¨
But the events of September 11, and the response of the Giuliani administration in New York in particular, changed some of the rules.
Says Biegel, ¡§If the Tylenol tamperings were a watershed in the practice of crisis management, the events of September 11 were a stark introduction to the next level. In the aftermath, New York City Mayor Rudy Giuliani joined the ranks of Jim Burke as a role model for effective, calm leadership. Giuliani¡¦s actions and public statements of empathy and support employed many of the previous lessons learned in crisis management, including communicating quickly, compassionately, frequently, and authoritatively with the city¡¦s residents and the nation.¡¨
Giuliani was in a different and stronger position than most CEOs in a crisis. Even Burke has to answer questions about Johnson & Johnson¡¦s responsibility for allowing the tampering, but no one held Giuliani remotely responsible for the terrorist attacks. Even the questions about the city¡¦s response were focused largely on acts of individual heroism rather than administrative difficulties¡Xat least until hearings more than two years later.
Nevertheless, Biegel makes the case that business leaders can learn important lessons from the Giuliani approach to crisis management.
First, he says, companies need to analyze all possible risks, including the implausible ones. ¡§The traditional method for risk assessment was to weigh each risk against a probability scale, which often led to preparing for only those with the highest probability of occurring. September 11, for obvious reasons, has begun to change that. Even the most unthinkable of events should now become thinkable¡Xand fully planned for. This requires even more creativity than before to identify all potential risks and not just the most probable ones.¡¨
Second, vigilance is key. ¡§Businesses and government are increasingly calling on people to be alert to suspicious activities and to report them. In the aftermath of September 11, we are seeing increased evidence of awareness efforts to alert employees and the general public to be alert to suspicious packages and other signs¡Xand to report them.¡¨
Third, regular simulations are essential. ¡§Companies and facilities are calling on employees to test evacuation procedures, and crisis teams are practicing their skills at responding to a crisis. While simulations have always been important ingredients of crisis preparedness, they were not always high priorities and were often moved to the back burner. The experience of September 11 and the continuing threat of terrorism have presented not only graphic examples of the extent of damage caused by a terrorist incident, but also presented a host of new potential threats, from bio-terrorism to bombings. These prospects, with a host of new concerns such as sheltering and evacuations, have moved the simulation agenda to a higher plane, as we see more companies conducting drills.¡¨
Fourth, companies need to recognize that crisis management requires more than just effective communications. ¡§While communications is at the core of effective crisis management, the scope of crisis management has become much broader, with priority concerns for infrastructure, business continuity, and accountability. This means that those responsible for crisis management are now assuming some managerial roles as well.¡¨
And finally, and perhaps most significantly, crisis management is becoming a full-time job. ¡§September 11 once again served as a wake-up call to dust off once-stale crisis plans to review and update them. And it has become apparent that the large sweep of concerns in crisis management¡Xfrom operational management to communications to logistics¡Xcan no longer be a part-time job if companies are to be as prepared as possible. Not surprisingly, the largest companies are the ones that have moved toward the full-time model, with medium sized companies moving at a slower pace.¡¨
And Biegel predicts more changes as 21st century crisis management evolves, particularly in response to Generation X, which gets its information from sources¡Xtelevision, the Internet, and videogames¡Xthat did not exist when its parents came of age. ¡§As the average attention span continues to shrink,¡¨ Biegel says, ¡§the use of simple statistics and visuals can be helpful in reinforcing key messages with the public.¡¨
He points out the trial lawyers, recognizing the increasing presence of Generation X jurors, are increasingly using visual aids to bolster their arguments. According to an article in The National Law Journal, ¡§[Generation X¡¦ers] were raised on cable television, computers, and video games. They are more likely to zone out during a rambling presentation ¡V no matter how eloquent ¡V than they are during a succinct statement punctuated by electronic visuals meant to give them the feeling that they figured it out for themselves.¡¨
Another important trend will be the increased involvement of boards of directors in crisis management, with an increased likelihood that boards will for crisis prevention and management committees. ¡§New government regulations, an increase in shareholder activism and the realities of some of the corporate crises that have brought down CEOs and entire corporations, have helped to create increased Board involvement in crisis preparedness,¡¨ he says, pointing to a March 2004 Business Roundtable survey of CEOs, in which more than half of the companies (54 percent) said that security-related issues, including crisis response, are part of the board¡¦s regular corporate governance activities.
As a result of all these changes, Biegel expects increasing professionalization of the crisis management function.
The September 11 Commission recommended the adaptation of national crisis management standards for the private sector. As a result, the pressures on corporations to become more crisis-ready could lead to the formation of a new professional organization of crisis managers, which could include standards among their menu of services.
¡§Crisis management is evolving as a corporate practice, and will continue to do so for some time to come,¡¨ Biegel says. ¡§Advances in technology and world events will drive the development of this essential corporate function. While this paper provides you with some of the basics, the rules are likely to change with time. Keeping an eye on current trends and learning, from both positive and negative examples, will help increase the knowledge and understanding of this vital corporate function.¡¨
The New Realities: Crisis Management in the Post-9/11 Era, by Len Biegel, is available from the Public Affairs Council.