Archive for the Crisis Communications Category

Crisis Issues – Beyond Emergency Response

Crisis Issues – Beyond Emergency Response

Don’t worry! We have a great emergency response team. They follow all the best practices and train annually. They can handle any emergency response.” That’s a great start for any company. Certainly, it will serve you well in an operational emergency. Also, they can apply many of their skills in other areas. However, this doesn’t address the different perspective needed for corporate concerns and crisis issues. To illustrate this, you’ll see major crisis issues to watch later in this post.

crisis issues emergency response

Emergency Response vs. Crisis Management

Many companies plan and practice only emergency response procedures because they are more comfortable with the structured approach and focus on operating issues. They also like that the federal government has complementary emergency response protocols.  Of course, emergency responders are very important in most operating circumstances. However, corporate crisis situations require perspectives that go beyond emergency response.

What’s missing is the host of corporate concerns that are also covered in the broader field of crisis management. If you have an existing emergency response program and need a crisis management capability, the simple solution is to build an overlaying crisis management team and supporting crisis management plan at the corporate level. This will ensure that neither team or approach confuses the focus of the other.

Likewise, crisis management teams support emergency response teams and other tactical groups while providing direction and voice for the entire enterprise. In this hierarchical structure, the crisis management organization encompasses all the resiliency efforts such as emergency response, business continuity, and security.

Conversely, don’t expect emergency response teams to handle crisis issues. Corporate concerns can simply be too complex for the structure of emergency response plans and compartmentalized teams.

Hopefully, your company already has a crisis management plan and practices it. If not, act now, since the middle of a crisis is usually too late to plan and practice your team’s roles and responsibilities.

crisis issues emergency response

10 Crisis Issues

Crisis management can work hand-in-glove with your emergency management team and plan while addressing other enormously important issues. Here are 10 major crisis issues that warrant real thought, preparation and integrated crisis management:

Bankruptcy

This can happen to any company. Consider two companies that had been among the 10 largest in the United States. Texaco declared bankruptcy so it could appeal an unexpected $13 billion judgment for tortious interference. Enron went from perennially most innovative company and darling of Wall Street to a global pariah in a matter of weeks. The plans, strategies, and leadership at Texaco ensured the company survived for many years after the bankruptcy. Enron did not enjoy a similar fate. Initially, there was too much executive focus on personal survival and shocked denial to stem the massive capital collapse. These situations resulted from several of the next examples.

Litigation

This was the proximate cause of the Texaco bankruptcy and virtually ubiquitous around the Enron collapse. Litigation is often the cause of an unanticipated crisis. Unfortunately, you may appear to be in complete control, until you aren’t. Litigation requires extraordinary attention to any communication and coordination with legal representation. Often, communication with stakeholders helps with litigation, such as through amicus curiae

Hostile takeovers/activist investors

Activist investors are increasingly confronting companies and threatening change-of-control. For instance, when Texaco was weakened by its bankruptcy, Carl Icahn initiated a takeover. The crisis response included passage of the Delaware corporate consolidations bill that slowed more aggressive tactics. This gave the company time to restructure and successfully respond.

Third party incidents

One company’s emergency may become a crisis for other companies in its industry. An oil spill in Alaska resulted in stringent shipping requirements on the entire petroleum industry and a passenger train collision in California resulted in multi-billion-dollar positive train control requirements on freight railroads. Public opinion and crisis issues can drive punitive legislative responses.

Corporate malfeasance/ government investigations

If an employee bribes a foreign official, the CEO may go to jail under the Foreign Corrupt Practices Act. In another case, the government may prosecute your company if you falsify billing. Both will seriously damage reputations.

Expropriations/ abrogation of contracts/ sanctions

You may be doing everything right, but a sovereign government can act for its own reasons. It may want your assets, refuse to pay for services under its contract or put you in the middle of an international dispute. These actions can shake markets’ confidence and require massive crisis communication, diplomatic and legal campaigns.

Executive misconduct/sexual assault

Even powerful executives have flaws and they are not always obvious to those who work with them. The preventive programs you put in place and the way you respond can make all the difference. Observers will attribute their actions to your company, whether that’s right or wrong. Carefully managed, it won’t be as bad.

Cyber-attacks/digital assaults

Denial of service, cybersecurity breaches, and other digital attacks have become common. Be sure to handle each case appropriately for its unique circumstances. Federal law actually changed after more than 100 million personal records were hacked at a consumer credit reporting agency. If you want to avoid scandal, be sure to consider and address public interest as a part of each case.

Mass shootings/ terrorism/ acts of war

Nothing is immune to violence. Churches and schools are targets, and new industries are having to scramble to adapt and prepare. Remember when few could imagine someone checking in a hotel, firing hundreds of rounds and killing scores of innocents. The thought, planning, and training to prepare for the unthinkable is now a necessary part of the business.

Targeted reputational attacks

It’s not just politicians and governments that find themselves under attack. Similar methods and sensationalism can be used to persuade communities that a company has violated their trust when that’s not the case.

 

Companies are vulnerable to many of these crisis issues. Waiting for them to happen is too late. Take actions now! Crisis Management and Crisis Communications require capabilities, critical thinking skills, and innovative approaches. With strong planning, preparation and skill you can overcome these issues.

Fake Opposition in the Age of Conspiracy

Fake Opposition in the Age of Conspiracy

For many years I dismissed most conspiracy theories as superstitious ramblings of people who mistook institutional incompetence for nefarious intent. Not anymore! If you observed the Strzok hearing or the Russian Indictments last week, you know conspiracy theories are alive and well in the United States. The world has changed, and the pace of change has accelerated. The challenge in this new age of conspiracies is knowing whether it is real or fake opposition, and what to do.

If you are purely reactive, it may not even matter much whether it’s fake opposition. It will feel real to many and that may be enough to spell the end for you and your business. Conversely, you may avoid being a victim by being prepared and proactive. To better understand this conspiracy trend, let’s look at last week’s news and see what it can tell us.

fake opposition conspiracy

In the case of Strzok, many people believe he is a member of the deep state who is out to get the President. For many others, it is an abuse of power by those who will defend the President at all costs.  In the case of the Russia indictments, it could be a case of the deep state manufacturing these charges to undermine the elected President of the United States. Alternatively, it could be a case of a foreign power deliberately conspiring to undermine U.S. elections.

It’s disturbing that many people react just as violently against fake opposition as they do toward real enemies. They may even sacrifice their core values to combat fake opposition. Sadly, if they took the time to learn it was fake, they could have kept their integrity intact. Watch this phenomenon carefully, so you too don’t fall victim.

Communication Conspiracies

Even in years past, we all knew that some conspiracies existed, such as in espionage and criminal matters. Nevertheless, there were limits. For instance, I didn’t believe the Apollo moon landing was faked or that  Area 51 was only a front for extraterrestrial studies. However, I still don’t know what I think about Roswell. Frankly, I also didn’t want to believe that a friend or colleague would intentionally deceive me or fabricate information.

The world has changed. Well-documented conspiracies are already underway. Some of these communication conspiracies are from foreign influences. Other conspiracies are manufactured right here in the good old USA. There are simply too many tools available to create artificial opposition and too much to be gained. It’s not just your imagination anymore.

That doesn’t mean we want you to instantly distrust your best buddy. We don’t want to destroy all your enjoyment by having you obsess over intrusions.  Instead, we want you to be aware and careful to explore who’s telling you what and why, before you act.

Businesses’ Role and Exposure

We are going through a time when the rules are changing, concurrent with the ability to manipulate and distort facts. Economic and social institutions are being massively disrupted, with people lashing out at each other as they struggle for control. Government officials, interest groups, and even religious sects are fighting each other rather than preparing us all to better manage our future.

Increasingly, businesses and executives are stepping forward to try to make things better. Your first reaction might be that people are just expecting too much, but it probably has more to do with businesses’ vested interests.

Interest groups view the current situation as a zero-sum game of “our way or the wrong way.” On the other hand, businesses are all about building the value of their enterprise and want to do what they can to prevent harm. Politicians dismiss an opponent as just “one of them.” In contrast, a business sees that person as connected to scores of others. That one person could use word of mouth to damage or promote the business with thousands of potential customers.

fake opposition conspiracy

The Problem of Fake Opposition

You may have heard of scams where digital calls wait for you to say “yes” so they can charge you.  There are also cases where a scammer uses a fake email address or cell number to mimic a decision maker’s identity. In far too many instances, this allows them to trick bookkeepers into issuing large payments to the wrong people.

These examples show how far people are willing to go for the right financial incentive. In fact, they are quite good at it. Stories and impressions will also work. A news or gossip scam can be just as effective as a phone scam, and far more damaging.  While some are tired of fake news claims, we need to recognize their potential impact.

Consider what would happen if businesses were attacked by fake opposition. Instead of waiting for you to do something wrong, your detractors could just roll out one fake opposition front after another. It’s a nightmare scenario! Don’t wait for it to happen. Prepared now.

What to Do

Whether your business is a direct target or just collateral damage, you’ll probably feel the sting of fake opposition. You want to inoculate your business with a strong, positive reputation. Support your reputation with a robust and effective communication plan that includes strengthening stakeholder relationships. Don’t just store communication tools for an emergency. Regularly test, sharpen and exercise those tools so they are more effective.

fake opposition communication conspiracy

Furthermore, you want to be sure you are using the right tool for the correct job. Be sure the fake opposition problem you think you have identified is the real problem. With the extraordinarily powerful threats of weaponized media and AI reputation stitching we’ve described in previous posts, a dedicated attacker can inflict grave damage. Their communication conspiracy can ruin relationships with your stakeholders.

It may be tempting to launch a broadside counterattack against the local activist group that appears to be your problem. Before you do that, make sure it’s not fake opposition. Delve deeper and learn whether someone more dangerous isn’t supplying them with the information or resources. There are experts who can help you with this. Let us know if you need suggestions.

If you have any reason to suspect fake opposition, you want to know who is really against you. Otherwise, you’re fighting fires that could pop up anywhere. Worse yet, if you try to resolve the issue with the fake opposition, you could find you’re negotiating with yourself. In this age of conspiracy, knowing your real opposition can be just as important as what to do.

Fake News? Business Political Tactics?

Fake News? Business Political Tactics?

Let’s start with a quick poll. What will be the dominant story this week and the next biggest story? Will they be 1) Kim Jong-un meeting with President Trump, 2) celebrities and pardons, 3) celebrities and suicide, 4) DACA, 5) Taliban ceasefire, 6) opioids, 7) hacking, 8) Facebook, 9) leakers, 10) Putin, 11) China, 12) Mueller investigation, 13) trade and tariffs, 14) Roseanne, 15) Uber and Lyft, 16) Elon Musk, 17) AT&T, 18) Disney, 19) school safety, 20) professional sports, 21) ill celebrities  or 22) something else? Seriously, please comment with your first and second choice. Unless there is an exceptional tragedy or celebrity curiosity, the odds are that the top stories will have political components. These stories dominate our attention as both real news and fake news. We are sometimes fascinated by them, their impact and the political lessons we can glean from them. We might even consider deploying some of these political tactics to help our business.

business political tactics

Whether you are a fan of President Trump or not, you probably marvel at his ability to generate support, shift attention where he wants it and so heavily saturate the discussion that no one seems to have the energy to debate the issue anymore. His approaches (practitioners might call them strategies and tactics) can be very effective if you’re a developer, celebrity or politician. If you are in a major business with major investments, lengthy project payouts and significant exposure such as energy, transportation, chemicals, mining or manufacturing, you may want to put less emphasis on these current trends and impulses.

Have you ever watched a news program and been amazed by a politician or political hack’s ability to avoid the difficult issues being tossed at him or her? Did you find yourself wishing that you could avoid consequences in the same very effective manner? If a reporter calls, would you like to dismissively address all the questions without answering any of them? If activists are protesting your new facility, have you been tempted to say, “throw the bums out”?

If your competitor is capturing the market have you considered exposing their criminal behavior and calling for an investigation of their questionable practices? Have you considered being so sensational in your social media posts and public persona that you draw millions of followers and then convert those followers into paying customers? Do you consider fake news and bots an expedient means of capturing public attention and support?

If you’ve thought about or done any of these things, you’re not alone. It’s likely that there are many other business executives who shared similar thoughts and ultimately chose not to pursue them. But a few still question why we shouldn’t use political tactics to build our business reputation, advance our business and get what we want.

Many companies recruit and utilize political talent in their government relations and communications campaigns. There’s a lengthy history of overlap between government and the private sector in the United States. In fact, when your company is attacked in the same vicious way that politicians, parties and government experience, it can be helpful to bring those political lessons into countering the assault, but you need to be careful how aggressively you use their political tactics.

Businesses and political campaigns have different purposes and measures of success. Most businesses are driven by providing a favorable return to their investors and having a favorable impact on their stakeholders. In most situations, the business intends to do this indefinitely. Things that damage the return to investors and relationship with stakeholders are considered threats to the company, including the company’s reputation and social license to operate.

business political tactics

On the other hand, campaigns are primarily about winning, getting your way, pushing your point of view and locking-in sufficient support to achieve the majority or plurality you need. Political tactics need to bob and weave to respond to a constantly changing landscape and they often use tactics that are vilified by the politicians themselves. While some politicians are very ethical and highly admired as statesmen, they still must win. This puts an enormous emphasis on shaping public opinion over the short periods of time needed to win elections. A politician can afford to offend some people to solidify the support of others and then conduct a campaign that variously creates infighting, alienation, and enthusiasm in different groups resulting in an election victory.

For most businesses, misuse of these political tactics could cause a crisis that must be managed and lasting harm to the brand. Stakeholder trust would erode, people would voice their opposition in government hearings, stockholder meetings and sales through word of mouth. While you can learn political lessons and even use political tactics to support your legitimate business interests, you need to balance this with conducting your business with integrity and a view toward maintaining a positive long-term reputation. Don’t sacrifice your brand, reputation, and stakeholder trust for a short-term, politically expedient fix.

political tactics

Well then, if it OK for businesses to observe politicians and campaigns to learn political lessons, what political tactics should businesses avoid? There are five political tactics that you should either use very sparingly or completely avoid in your business communications and encounters. They are marked by either being excessively confrontational or deceptive. They are attacking competitors, attacking reporters, attacking opponents, spinning stories to manipulate perceptions and deliberate use of fake news:

  • Attacking Competitors – If you attack your competitor, they will likely respond in kind. Also, you are part of the same industry, facing many of the same issues. If you tear each other down, who’s going to give you the benefit of the doubt?
  • Attacking Reporters – The adage of not picking a fight with someone who buys ink by the barrel is still true. If you take the time to get to know some journalists, you will find that many are very bright and capable and they are as dedicated to their mission of providing the truth as you are to making money or whatever else motivates you. If you work with them ethically, they can help you share your story. If you try to deceive or hinder their work, they will figure it out and report the full story, including what you did that was illegal, inappropriate, or unethical.
  • Attacking Opponents – If this one isn’t obvious to you, just look at the years of fighting between heavy industries and environmental activists. The more business fought environmental protestors the more effectively environmentalists used it to publicize their cause, raise funds and increase the opposition. Assume your opponents have a different, but valid perspective and open communication so you have a better chance of cooperation than opposition. This does not have to be a zero-sum game. it is well worth the effort to find a win-win and simply opening a constructive dialogue can reduce the damage.
  • Spin – Honesty and transparency matter. As soon as a company or individual spokesperson for a company becomes known for spinning stories, they are distrusted, discounted and marginalized. People and reporters are very astute about attempts to spin. Many perceive this seemingly innocent attempt to slant the story in your favor as deception. You’ll get far more understanding through honest, ethical attempts to communicate than you will through spin.
  • Fake News – Governments, hackers, fringe advocates and online “entrepreneurs” have successfully used fake news to influence public opinion, disrupt and make money. There are a wealth of tools, bots, and channels to distribute and promote fake news. It has become increasingly difficult to detect and it may be tempting to use fake news to promote your position on issues and your business. The odds of getting caught publishing fake news may even seem to be slight and you could always deny that you knew it was fake, but you can’t predict what future concerns, detection methods, and laws will hold for fake news purveyors. In addition, fake news has been further infected by bad actors using increasingly sophisticated weaponized media that can inflict major damage on a company’s reputation. Eventually fake new with weaponized media may rise to a major crisis that will demand everyone’s attention. Do you really want to risk getting caught up in this and ruin the long-term future of your company to gain a little unfair advantage now?

fake news

While we understand how a business may want to skirt around some of these issues from time to time. If these political tactics are used extensively they may ultimately be the downfall of the business. Sure, there are exceptions to this rule just as there was public support for Nero against the Christians in ancient Rome and territories that embraced Genghis Khan’s conquest, but they don’t last. For the long-term business, a reputation for honesty, integrity, and performance is very important. A significant reputation hit can damage a company for years. Why risk a reputation crisis for political expediency?

Accelerating Reputational Crisis Threat

Accelerating Reputational Crisis Threat

The uproar over comments by Roseanne Barr and Samantha Bee last week along with the corporate, political and public responses should spook anyone who realizes that what happens in one situation could quickly morph and replicate itself into another. Our society’s current obsession with sensationalism apparently needs to be fed frequently and this is creating an accelerating reputational crisis for anything in its path.

Celebrities and politicians are drawing most of the attention. They regularly feed it, benefit from it and use it to distract us. If celebrities and politicians are also the targets for this negative attention, we can rationalize it as appropriate live by the sword, die by the sword justice.

Pandora accelerating reputation crisis

Unfortunately, it’s not likely that this trend will be limited to celebrities and politicians. Much like Pandora exposed all of us to the seven deadly sins when her personal curiosity got the better of her, politicians and celebrities’ sensational promotions are increasing the risk of an accelerating reputational crisis that will confront corporations.

Public facing, B2C businesses are already seeing this. The actions of a few can even compel more socially conscious businesses such as Starbucks to become the poster child for addressing broader societal issues.  While B2C companies are more exposed, B2B businesses are also vulnerable and they better learn to deal with this growing risk.

The social media channels we “enjoy” today are connecting, motivating and empowering massive attention to things few previously noticed. Mass media understands this and is compounding the effect by heavily covering social media developments. The result is that stakeholders, including those who affect the future of your business, are aware and engaged almost before we know.

In this next iteration of our concerns highlighted in our weaponized media and corporate crisis prepper blogs, we are now focused on the very real risk of accelerating reputational crisis situations. Of course, most of us will quickly say that that Roseanne Barr and Samantha Bee represent entirely different situations. We tell ourselves that “we are not racists, misogynists or haters, and we don’t tolerate it from our employees or contractors.”

accelerating reputational crisis

While that sounds good and may be true, it’s rarely that simple and straightforward. What if an employee does something insensitive on his own time or it’s unclear who is telling the truth and you need to investigate. Now take it up a notch and consider a case of harassment that previously would have been addressed through an internal investigation but could easily become very visible in today’s world. These are legitimate issues that need to be addressed fairly and equitably.

You want to avoid being whipsawed by public opinion, but we cannot ignore it. Social media is facilitating such rapid detection, amplification, and counterattacks that it is exceedingly difficult to stay ahead of anything. What was OK yesterday may not be OK tomorrow. Something that might have been quietly handled in the past, can be very explosively public in the future. We all need to prepare and be on our toes.

To maintain their social license to operate and avoid being hit by an accelerating reputational crisis, companies need to work through these situations now, so they can respond in real time when they are confronted. Start by establishing and clearly communicating acceptable standards of behavior, including social media policy. Work through how you will respond to various scenarios, develop related messages and test them through tabletop exercises. These are just a few of the steps that help you to respond more quickly and effectively if you are hit by an accelerating reputational crisis.

Positive Crisis Lesson – Uber 911 App

Positive Crisis Lesson – Uber 911 App

Give Uber credit. They’ve learned from their mistakes, changed their approach and now provided us with a positive crisis lesson. Of course, skeptics will wait to see if this will last, but they’ve made a major advance. In their past crises, Uber tried to defend or hide their actions and even counter-attack their critics, who include their stakeholders. Now, rather than once again try to explain away why something went wrong, they have taken concrete steps to fix the problem.

Uber positive crisis lesson

The 911 button on the Uber app and related measures may be a game changer for the Company and it’s an important, positive crisis lesson in how fixing the problem is your best hope to ultimately make the problem go away.  Of course, you’re still going to need to put a lot of effort into messaging, communication and implementation to ensure everyone understands that you’ve diligently worked to improve the situation.

Uber is doing this. They rolled out their new app and allowed it to be tested on the Today show. This was preceded by weeks of substantial media outreach, but the successful test provided the essential implied endorsement they need to show real improvement. They then aired an ad on the same network designed to restore faith in the Company and its reputation. You can be sure that there are other features of their rollout and that it was carefully planned.

To the casual observer, these initiatives may appear to be coincidental, but each communication reinforces the positive sentiments achieved from the previous communication. This is a program that over time will likely save the company from its history of one self-imposed crisis after another. In fact, as we watch this unfold, we may find more than one positive crisis lesson to study.

positive crisis lesson

By rolling out a feature on their app that allows riders to call 911 for help and the app providing their location and details on the vehicle, Uber is placing rider protection with a trusted third party, so both riders and drivers will not have to worry whether the company will appropriately address criminal or safety issues. This new feature makes a major stride in putting the welfare of their customers first and giving all comfort that they are not trying to protect bad actors in their business. They’ve found a way to give riders comfort that they are secure without appearing to reflexively take sides in the issue of rider safety.

Part of the reason this happened is that Uber has new management and they knew they had to make dramatic changes. Frankly, if it weren’t for the company’s interesting business model, they might not have survived this long. With these mismanaged crises, Uber appeared to have lost some traction to more responsible sounding competitors such as Lyft and some passengers even shifted back to taxis because they appeared to be safer. With this latest step, Uber may again have the lead, leaving the others to play catch-up. Who wins may depend upon whether Uber sticks with the cultural change and positive crisis lessons learned or they falter. Time will tell, but Uber won this battle.

Corporate Crisis Prepper – A Ton of Cure

By anticipating and managing the challenges that confront organizations, a corporate crisis prepper can make the difference between success and failure for a company. To understand how, we first need to explain what we mean by a corporate crisis prepper or more simply, a corporate prepper. To get there, we need to discuss the broader survival prepper movement in our society.  For those of you who are not as aware of prepper concerns, there may be more to the story than you think.

corporate prepper

Ultimately this story will take us to preparing for a corporate crisis when communication systems collapse. Along the way, we’ll briefly touch on items that some associate with preppers, such as storing food, medicine, and weapons for extreme doomsday scenarios. We’ll do this because there are elements of being a survival prepper that make it easier to understand why you should consider being a corporate crisis prepper.

At various levels of intensity, survival preppers have surmised that there is a risk of the breakdown in the fundamental systems we’ve come to expect in our everyday lives. This could be as obvious and likely as hurricanes, floods, earthquakes or some other natural catastrophe that disrupts day-to-day life. It might last for a day or two or it might be weeks or even months. Just look at the flooding from Hurricane Harvey in South Texas or the continuing hurricane damage on Puerto Rico. In these situations, there could be a loss of power, logistics for food and other supplies, internet and cellular communications, and increase in opportunistic or desperation crimes.

prepper supplies

Survival preppers address this possibility by storing water, food, medicines, alternative sources of power, manually powered radio, solar generator and some include self-defense in their preparations. The extent of preparedness depends upon the individual’s level of concern and their individual judgment and available resources to determine what is needed.  Many preppers very rationally, objectively weigh the risks and take the precautions they deem appropriate for those risk.

Someone who has been through several disruptive natural disasters is likely to have a few days of water, nonperishable food, batteries and maybe even a small generator. However, another person who has lived through weeks of isolation with no help available may well take even more extensive precautions.

solar flare corporate crisis prepper

Then there is the risk of wider, more extreme disasters such as a coronal mass ejection solar event frying electronic circuits or a major hack bringing down our national power grid. Both are unlikely at any given moment, but the consequences are so high that the seemingly small risk is great enough to consider some precautions.

Then you get less likely, but still feasible scenarios such as a break-down of civil order or armed insurrections. Most Americans scoff at this possibility, but we should realize that violent revolution and invasion are more common than our U.S. experience. Even the U.S. has had major revolutionary conflicts in the Revolutionary War and the Civil War, so with our limited experience, we still average a major event about every 120 years. Those of you who have studied probability may see this risk as somewhat comparable to the multiple hundred-year floods the City of Houston had in 2017.

revolution corporate crisis prepper

This isn’t to suggest that we’re going to have a violent revolution in the U.S. any time soon or even ever. It’s just that globally revolutions are relatively common, meaning that at any given time somewhere in the world it is a real possibility. That’s why the smart money occasionally goes to the preppers.

If you layer on top of that the enormous, unpredictable advances in technology, the growing international tension and what we have already seen in countries using weaponized media to attack each other, we can see how major disruption is possible either through a natural disaster, mistakes or malicious intent. This makes being a corporate crisis prepper, the hero who will be praised if a non-traditional crisis befalls their company. It’s also where a lot of wealthy geniuses are putting some of their money.

It might surprise you to learn that several Silicon Valley billionaires have taken a little of their money and dedicated it to providing a sustainable life for themselves if we have a catastrophic event that wipes out a lot of our infrastructure and support systems. To them, it’s not that they expect doomsday scenarios, but the impact would be so great that it’s worth taking a few percents or even a fraction of a percent of their wealth to mitigate and guard against it.

prpepper bunker corporate crisis prepper

If these bright, wealthy individuals can objectively justify some prepper investments, shouldn’t the same be true for a major corporation which could either lose everything or end up ahead in a catastrophe? This is where being a corporate prepper and a survival prepper overlaps.

Like people, corporations have individual identities that they want to extend and grow. This requires a certain amount of care and societal acceptance for corporations to flourish. Companies need to be able to protect themselves and survive hardship, but they also need to be reconciled with other demands. So, let’s scale this back for the corporate prepper to just the relatively likely scenarios in the next few years and see what we should rationally do.

In addition to your crisis management, relationship, reputation and crisis communications efforts, the wise corporate crisis prepper needs to assume that the company’s website and social media channels are vulnerable. As we discussed in our recent blog on weaponized media, your digital media could be attacked long before you even know there’s an issue.

Since you could lose one or more of your primary communication channels, you may want to consider supplementing them with at least some of the following capabilities:

  • Equipment
    • Landline – cellular service can be interrupted or overloaded, and you need another way to reach people.
    • Satellite phone – for remote locations and critical communications if other systems fail.
    • Shortwave radio – in dire circumstances, this 20th-century technology rarely fails.
    • Cell phone with encrypted voice network – to talk with key personnel and stakeholders confidentially.
    • Controlled and encrypted text messaging system such as Vaporstream – if other systems may have been compromised, you need a secure way to exchange information.

crisis prepper

  • Resources
    • Hard copy contact lists and plans – If you can’t use your computer or smartphone, you better have a backup.
    • Radio contacts and protocol – if you rely on the web or even phone trees to communicate with employees, you need this if your region loses power and phone.
    • Dark website – both to protect your commercial website from being disrupted by a crisis and as a reserve if your primary site goes down.
    • Access to a major press release network, such as Business Wire or PR Newswire – this is to better target audiences and in case your internal capabilities aren’t available.
    • Monitoring services such as Cision, Meltwater or more sophisticated analytics such as Synoptos  – you need to know what is happening and how to counter.
    • An outside PR firm – to help you quickly scale up to challenges confronting your business and even take over if your own people are not able to respond.

A corporate crisis prepper who has the right mix of this equipment will have the basic ability to communicate with employees and stakeholders if they lose other channels such as internet and intranet through a widespread loss of power or denial of service. Of course, you will still be very limited in your ability to combat misinformation or attacks on your business unless you can quickly mobilize support to understand what is happening, appropriately respond and get your message out. That’s why a corporate crisis prepper will likely secure most, if not all, of the resources shown above.

In future blogs, we will delve more deeply into these individual tools and resources, but for the moment we just want to encourage you to anticipate risks and begin to marshal the capabilities necessary to respond to them.

Crisis Spokesperson – Loyalty Has Limits

Crisis Spokesperson – Loyalty Has Limits

In a crisis, one of the biggest decisions is Who talks, along with what and how they say it.  In fact, the crisis spokesperson may be as important as the miracle worker who resolves the problem. To prevent damaging comments from secondary players during a crisis, communication professionals and top management will use cliché warnings such as:

  • “Communications are important in a crisis; don’t say anything if you don’t know what you’re doing”
  • “refer all questions to management or the public relations department”
  • “If you are not an authorized spokesperson, then that’s how you should respond to a reporter’s question – ‘I am not an authorized spokesperson.’”

crisis spokesperson

The idea is obviously to control the flow of information through a designated crisis spokesperson to ensure accurate, fact-based, contextual and nonspeculative commentary.  It’s important to distinguish this role from a celebrity spokesperson, who was likely hired to promote the company’s products, and crisis spokesperson, who provides highly trained and experienced communication for the company in very difficult circumstances.

Unfortunately, these internal messages about leaving it to the experts are sometimes missed among different people in different organizations.  So, we asked our top operational crisis management professional how he would explain the authorized crisis spokesperson issue. He said the simple meaning for everyone should be:

“We pay highly trained communications professionals to be sure we communicate our message in an accurate, controlled and respectful manner that reflects the vision, values, and wishes of the owners.  If you aren’t one of those highly trained communications professionals who is authorized and paid to represent the owners, keep your mouth shut!”

Regardless of that being the sentiment, the reality is that most organizations choose to be somewhat more diplomatic with the topic and even provide employees some convenient phrases politely referring inquiring media to the designated crisis spokesperson or crisis communications team.  Whatever your organization’s policies and procedures on the matter, we’re reminded of occasions when permitted referral statements were not enough to deflect the efforts of aggressive reporters.

oil spill response

In the early hours of one morning not too long ago, at an industrial park adjacent to a busy port, a petroleum product began appearing in port waters and in some adjacent creeks and low-lying wetlands.  This industrial area had many resident companies though only one company had noticeable petroleum storage tanks. To the casual observer, the company with storage tanks was an obvious petroleum-related business with a well-known brand.

It was reasonable to expect the focus to be on that company when everyone discovered the spills in the area.  Even the employees of the petroleum company assumed the spill was theirs and company emergency response teams were coming in early prepared to begin containing the spill and cleaning up the contaminated areas.

The emergency response teams arrived just before daylight and by the time you could see clearly, the local and network camera crews had arrived complete with helicopters and some media outlets airing speculative commentary.  It’s at this moment an innocent yet critical mistake was made that interrupted the business of the company and tied up personnel for months.

While walking from his car in the parking lot to the front gate entrance, an accountant for the petroleum company, appearing authoritative in professional office clothes, was asked about the company’s response. There were questions about whether the company would clean up everything and ensure port operations could resume soon for adjacent companies. Would the smell be gone soon for residents in a nearby neighborhood and would they receive any compensation?

unintended crisis spokesperson

“Please contact our public affairs department,” said the employee.  “I just arrived and have no knowledge of this situation.”

The employee kept walking until one question caught his ear. “Is your company just going to ignore this and do nothing” a reporter yelled out. That’s when the best intentions of a good employee caused an extraordinary amount of difficulty for everyone.  Instead of remaining silent, the employee responded.

The indignant and unwaveringly loyal employee stopped dead in his tracks, turned around and with assuredness and authority said “That’s a foolish question.  We’re at the apex of corporate responsibility! We are accountable for all of this and of course, we’ll clean up everything.  You can see our emergency response team is already on the water and the whole company is on alert.  We’ll take care of and compensate anyone who has been affected. We always do!”

That statement was the very first communication from the company to the public and it set the stage for what everyone expected. The loyal and well-intentioned employee had effectively assumed the role of crisis spokesperson. However, he was not trained to do this, didn’t have the necessary information or coordination with responders, and most certainly did not have authority to speak for or commit the company.

What actually happened was very different than what the employee and media assumed.  The petroleum company was the first to notice the spill and alerted the adjacent companies and local authorities, who in turn notified the community residents.

Although the company always initially reacts as if any spills might be theirs, instrumentation had been and was still normal and visual inspection of the facility showed no evidence of missing product or leaking equipment.  That was known before the media even arrived.  The company was responding and deploying its people to protect their bulkheads, property and facility operations, but they were not assuming responsibility for the spill.

accidental crisis spokesperson

But, now this employee’s statements were all over the local news and within an hour, calls began coming in requesting hotels and other compensation until the smells in the neighborhood went away and the clean-up was completed.  Imagine how difficult it is to come back and say that this wasn’t our fault and that the employee had spoken out of turn.  We’re not going to provide hotels, compensation nor be responsible for the clean-up.  Ultimately, the situation became very expensive as the company felt obligated to support the statements of the employee and became awkwardly and inextricably intertwined with the whole event.

Three days later it was discovered that the leak was from a service pipeline and underground storage tank at an adjacent facility that had been unused for some time.  The older facility was going through some upgrades and the small pipeline and storage tank had failed at some time during the testing and startup processes.   Since the source of the leak was not visible or monitored, that other facility didn’t know anything had happened.

This employee, our unintended crisis spokesperson, loved his company a little too much and his well-intentioned, but ill-prepared, statements had an expensively negative effect.  The lesson here is that simple statements and loose policies on communications can lead to expensive, reputation-damaging and even disastrous consequences.

This example was bad, but there have been others that were devastating for companies. There are reasons why companies carefully select, prepare and coordinate with their crisis spokesperson. A crisis, by its very nature, is challenging even for the most experienced experts. It is certainly not the place for “on the job” crisis spokesperson training.

 

Global Operative Adventures – Crisis Investigation

Global Operative Adventures – Crisis Investigation

This is part two of our continuing crisis management global operative adventures. Have you ever worn your crisis management hat into an emergency response and follow-up investigation and discovered that what should have been simply a bad situation was really something much worse? I hope you haven’t experienced this, but this global operative has and you need to know that it happens. These situations often highlight the advantages of having corporate security and communications expertise along with your crisis management skills.

I realized some time ago that an emergency response often grows into corporate and stakeholder concerns requiring the broader corporate focus of crisis management and aligned expertise in communications and corporate security. In this latest global operative adventure, allow me to take you through one such example where we found the truly unexpected.

global operative crisis assessment

A few years back, I got a call asking me to travel to another country and conduct an operational incident investigation.  There had been a fire and even after the company, their contractors, and the local government conducted an exhaustive accident investigation, they couldn’t find the root cause. They asked if I’d conduct an independent investigation.  Part of the job of a global operative in crisis management is performing these seemingly routine assignments, while always being prepared for the unexpected.

This is where being on your game is important.  Why was it that seasoned investigators couldn’t determine the cause of the accident when there were two direct witnesses (both injured) and three others in the immediate area of the fire?  How could you have five employees involved and no one has any idea what went wrong?

Compounding the mystery, there was no camera video to review, all the equipment and other evidence from the fire had been moved out of the building, and nothing was photographed correctly prior to removal. There was nothing in a chain of custody, and everything had been rained on for over a week.  The physical evidence was a mess but there were still five witnesses who could be re-interviewed and that’s a tremendous amount to work with.

crisis incident

To the client, the issue was that their company facility had an equipment fire, employees were injured, production lost, and replacing the equipment and getting back into production would be time consuming and expensive.  To them, it seemed obvious that somehow the equipment had a critical failure and that liability must lie with the equipment manufacturer and not the company.  The equipment manufacturer vehemently disagreed and said it had to be something else but avoided blaming the company.  This was going to cost someone a lot of money and everyone was guarded, if not outright defensive.

In my work as a global operative, I’ve found that if you broaden your perspective beyond the operational and safety aspects of incidents, investigations can lead you down paths you would never have expected.  In this case, I was working with tainted evidence and memories that were 10 plus days old.  On the plus side, the previous interviews were conducted by highly trained and seasoned EHS professionals, with multiple certifications.  Their reports were complete with notes, diagrams, and photographs but after several long meetings where we went over all they had learned and what opinions they had, I noticed something interesting about their investigation.  They didn’t look for deception.

Given the circumstances, the interviews I was going to conduct were my most likely way of discovering what transpired, so I was very careful in how they were orchestrated and conducted.  I began the interviews at 09:30 and by lunch, I knew what had happened.

global operative crisis investigation

Image of worried male suspect during police hearing

What I discovered required a step back from the situation and involved a call to the top leadership in the company.  It wasn’t that the original investigation teams were incapable of finding a cause for the accident, but rather that their investigation was systematically and conspiratorially derailed from within.

The accident wasn’t so much of an accident as it was an outcome of gross mismanagement on the part of a local member of management who had coached their five direct reports (the witnesses) to mislead the investigators or face termination.  This is the point where you might say that this type of thing doesn’t happen, but it does, and it did.  What started out as an accident ended with the termination of both leadership and line workers.  It wasn’t an accident but a series of financial issues that had been obfuscated, with the cover-up involving intentional deception and dangerous high-risk shortcuts at multiple levels.

Now you might ask “where is the crisis here”.  In its purest sense, this was a corporate security rather than a crisis management issue. The point is that because our crisis management work included a corporate security perspective, we were able to resolve the problem for the client.

incident response investigation findings

In this situation, management was on their game when it was originally suggested that they simply let the risk management instruments do their job, and they decided against this convenient but indefensible position.  Instead, they chose to pursue outside perspectives and expertise to discover what truly happened.

Then, the company’s management fixed the problem and put in place policy and procedures that would prevent a similar occurrence.  The company avoided filing an embarrassing claim and adversarial legal engagement with a vendor, answered inquiries to the satisfaction of the media and the situation was put to bed.  The accident and issues surrounding it were expensive but much less expensive than the public scandal and stakeholder lawsuits that were avoided.

When things don’t seem to add up, there’s usually a reason.  If you find yourself without sleep amid uncertainty, feel something is wrong and out of place, or just want to verify that everything is as it should be, give us a call.  We’ve been there and done that.

Managing the Unthinkable

 

Managing Unthinkable

Even the unthinkable needs to be managed.

When your business depends upon it,

you can count on Corporate Crisis Group.

 

Bankruptcy Communications – Don’t Give Up

Bankruptcy Communications – Don’t Give Up

This is an experienced layman’s look at the hard reality of bankruptcy, the unexpected consequences and how bankruptcy communications can help. If you work, own or invest in a company, you are always at risk of being pulled into a corporate bankruptcy. Some of our most successful business have used bankruptcy to deal with difficult issues. You can lose control and have your business dissolved, but you can also reorganize and emerge as a much-improved enterprise. Even the President (Trump) has taken businesses into bankruptcy. Now you can even get past the stigma of bankruptcy.

Bankruptcy communications or not

Bankruptcy

If you think it will never happen to you, let me caution you that it happened where I worked twice in my professional life and both of those companies were in the Fortune 10  when they filed for bankruptcy protection. The first was because of a $13 billion tortious interference judgment in a state court and the second stemmed from insufficient liquidity and other controversial issues. We’ve also witnessed scores of transportation, energy, banking, real estate, retail and technology companies go through bankruptcy.

So, if bankruptcy is a legal proceeding where lawyers, accountants, creditors and restructuring specialists seem to drive the process, why even bother with bankruptcy communications? Much of the reason is that there are so many processes that the uninitiated find strange and difficult. If you explain them, then you have a chance that the bankruptcy will run more effectively and retain greater value for the owners.

Let’s start with the fundamental change in who controls the business. Virtually overnight the control of the business shifts from stockholders and the management team to the creditors and the court. Of course, management has an opportunity to convince the court that it can successfully reorganize the company and it should drive the process as the debtor in possession, but if liabilities far exceed assets, this becomes more difficult. There are even different classes of debtors that drive the process.

A $100 billion-dollar enterprise could lose more than two-thirds of its employees in one day, have remaining employees and vendors wonder if they’ll get paid for past and future work and even have vendors pull water coolers out of the executive offices the day after a filing. If the company’s ability to emerge from bankruptcy depends on ongoing operations, these issues need to be resolved quickly so workers are productive, and the operating businesses continue to generate revenue. Even if the business will be dissolved, you want to preserve value so ongoing businesses can be sold or spun off.

Instead of enriching stockholders, the bankruptcy’s focus is on repaying creditors. You usually want to maximize the value of the bankruptcy estate so there is more money for creditors and the possibility that stockholders will get something. An engaged workforce can help you drive greater value. The remaining workers need to know where they stand, what is happening and what they should do.

This calls for strong coordination and effective bankruptcy communications. People can handle bad news, but they have a very difficult time coping with no news. Unfortunately, many bankrupt companies fail to recognize the internal communication needs and eliminate the capability as a non-essential expense.

If you put yourself in the shoes of the worker, you’ll understand what’s driving them. They’ve likely lost much of their life savings. If they invested in company stock, it may be worthless. In many bankruptcies, there aren’t enough assets to repay creditors and still have something left for stockholders. Yet people continue to invest, hoping for the best.

Workers’ loyalty to management and the company may shift to loyalty to their coworkers, but they are capable of continued loyalty. They need to have enough information to make reasonable decisions about whether to stay and help the company operate through the process. This uncertainty is compounded when workers learn more about their livelihoods from the news than from the company.

A solid bankruptcy communications program that blends bankruptcy experience, internal communications, and crisis communications can make an enormous difference in these times. Understand that workers may not have received all past pay and they may even be subject to a clawback of their past bonuses. They need to know as much as possible to confirm future income and the viability of the ongoing enterprise, since they may have lost so much of what they thought they had.

Bankruptcy sharks in the water

Bankruptcy Communications vs Shark Attack

Even the most prized and highly compensated employees can feel shocks. Did you know that your investments in a nonqualified retirement savings plan, such as in many executive compensation plans, are probably not protected in bankruptcy? Likewise, even though there are federal pension guarantees, they do not necessarily ensure dollar for dollar coverage.

What happens when your most essential workers are distracted by personal financial ruin as well as the demise of their company? Communication from management can help. You may also want to rethink some of your own retirement saving strategy.

In the case of continuing to operate the business as the debtor in possession, bankruptcy communications can prove to be essential to preserving the reputation and the market value of the business, as well. The lawyers who are protecting client legal interests are not necessarily focused on the niceties of preserving relationships with the company’s stakeholders. However, if government officials or community leaders are alienated and become adversaries, the proceeding and likelihood of maximizing value are diminished. A little professional focus on bankruptcy communications with external audiences, as well as internal stakeholders, can cut through enormous difficulties.

A member of Congress who attacks a company because of past board or management decisions may continue to damage the reputation and correspondingly reduce the value of the enterprise. If you reach out and explain that the remaining business is owned by the creditors who were harmed, and the bad actors are no longer involved, that member of Congress could become an advocate.

Things change in bankruptcy. Even the reporters who cover the business may change. So, the needs and techniques for bankruptcy communications also change. With insight, experience and a relatively modest effort, a bankruptcy communications program can make it all easier and more productive.

Contact Us

Phone: +1.833.227.4747

Email: info@corporatecrisisgroup.com

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Houston, Texas 77002