Archive for the Crisis management 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 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?

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.

Weaponized Media – Next Generation Crisis

Weaponized Media – Next Generation Crisis

If you are familiar with the rediscovered term, weaponized, as is relates to digital media then you’re ahead of most. That likely means you are well informed and attuned to anticipating future issues. You can see evidence of weaponized media in the dramatic growth of specialized news channels tailored to every political extreme, reports of foreign states using social media to agitate for social conflict and even the various sides of the term “fake news.” Unfortunately, our society is ill-prepared to deal with the threat and this next generation crisis will likely hit businesses much more severely and sooner than any of us hope.

outrage next generation crisis

Just in day-to-day encounters, businesses are becoming increasingly susceptible to public outrage that often uses social media as an accelerant. Increasingly, the rules and approaches that previously worked are not sufficient for the next iteration. While current best practices can help you get a chance, they simply may not be enough to seamlessly overcome this next generation crisis, where the business is deliberately and maliciously the target.

The recent Starbucks incident in Philadelphia touches on this since it was not just an issue over how Starbucks was involved and responded, but also how many wanted to use the incident as an opportunity to press for broader societal change. While the environmental movement has been using activist tactics against businesses for decades, at least the business could reasonably anticipate and understand how its actions might result in the opposition.

These issues, which sometimes appear to come out of nowhere, may just be the tip of the iceberg. They demonstrate the growing power and engagement of the public through the social media tools and networks that are empowering them. You only need to skim through these 50 examples of social media damaging businesses to see how one or more could spin out of control for your business. As companies struggle to respond to this changing landscape, imagine the much more severe circumstances if state sponsors, issue activists, competitors, and criminals maliciously bring these tools, including advancements in artificial intelligence (AI) against your business.

AI weaponized media

As we marvel at the Google bot’s ability to carry on a human phone conversation, some already realize it won’t be long before robocalls will be indistinguishable from casual acquaintances. We may even use other AI bots to filter through the natural sounding phone bots, and the phone bot race will have begun. This will likely cause us to put up more barriers to interaction, which ironically may make it even easier to weaponize media against our business interests.

The bright young people at Facebook and other social media platforms probably could have avoided some of their recent troubles, if they had the benefit of more diverse experiences, skills, and perspectives in their backgrounds. Ironically, diversity for the tech sector may be to include more traditional, experienced perspectives. In a crisis, you get more wisdom from those who have lived through the nuances of a previous crisis than by dispassionately studying the subject.

There are indications that Russian sponsored groups concerned about the emerging dominance of the U.S. oil and gas industry have already acted to deliberately create domestic resistance to energy projects. If you don’t believe that this could affect you, the U.S House Committee on Science, Space and Technology has reported that Russian sources took at least 9,097 social media actions “about U.S. energy projects or environmental issues between 2015 and 2017.”  If Russia, with its significant global business relationships, was willing to use these tactics to harm their U.S. competitors, imagine how much more aggressive other state-sponsored social attacks could be on businesses they want to destabilize.

Russia Weaponized media

A weakened economy or social conflict tends to reduce a country’s international focus and global influence. It’s easy to see why state sponsors would use weaponized media to undermine other countries’ institutions. If you consider how many governments also have business interests that compete in global commerce, you can see how creating this next generation crisis can easily provide the dual advantage of destabilizing a country while simultaneously weakening a business competitor.

Don’t assume that this next generation crisis will only come from governments. Hackers, terrorists, political activists, former employees and even activist investors have all demonstrated great willingness and skill in using media to attack businesses. The next step will be weaponized media, so they can use their growing sophistication and the availability of AI bots to maliciously target businesses.

The odds are increasing that your business will have to deal with this in the next several months or years. The longer you wait to prepare, the more expensive it will get and vulnerable you will be. If you wait until after the attack starts, it will be very difficult to overcome.

weaponized social media

So, if the task is so daunting, why are we raising the alarm? Well, there is a lot you can do to overcome weaponized media, whether it’s social, digital or traditional. Even if the very brightest think tanks haven’t figured it all out, at least you can make your company a more difficult, less vulnerable target. While preparing for the next generation crisis may not be as simple as only needing to be faster than the other guy, there is a bit of that.

What do you do? A good start is strengthening the same measures that you would use to overcome a traditional crisis and built trust with stakeholders, so they will be more receptive to crisis communications from the company. Next, you develop multi-channel vehicles for communication and ensure you can get to your audiences even if technology, power or access to other channels is blocked.

If your adversary is using weaponized media in a digital environment, you should assume they may be able to deny you access to your digital countermeasures. Consider what you would do in a massive denial of service or a regional power failure. Develop channels across a range of technologies.

next generation media

If you haven’t already done so, prepare for this next generation crisis by building a 3rd generation crisis management team now.  The methodologies may be similar, but the players of today have new titles, responsibilities, and perspectives.  You must bring to the table the right experts to exchange information, preparations and best practices so you can develop workable responses to the weaponized media intentions of any aggressor. Involve the most experienced responders and strategists you can find internally and externally. Don’t limit yourself to one function.

Develop defensive capabilities, plans and test your approaches and systems so you are continuously improving. Build alliances, supporters and your reputation so you can get the benefit of the doubt until you have time to respond. Then you merge that with as much media monitoring and analytics as you can justify. Use investigators and communicators to identify inconsistencies and develop countermeasures. Let the information inform your strategies and tactics.

With a modern crisis management team, knowledge of tomorrow’s risks, and practiced leadership, your business will be prepared for the weaponization of tomorrow.

Crisis Assessment Team – Emerging Concern

Crisis Assessment Team – Emerging Concern

The best prospect for overcoming a crisis comes from recognizing an emerging concern while there is still time to act. A process for providing a timely crisis alert to management greatly improves the prospects for an appropriate, capable and successful response. Of course, that begs the question of how you know it is a crisis. If you respond to every emerging concern you’ll wear down and dilute your capabilities, but if you resist all activation you may permanently damage the company’s reputation. It can be difficult to get consistent, knowledgeable perspectives that allow you to respond quickly and effectively. A Crisis Assessment Team can provide that tool very effectively and efficiently.

Emerging Concern, Crisis Alert and Crisis Assessment Team

A Crisis Assessment Team is a small group with relevant perspectives and responsibilities that determine the nature of any unexpected issue or event and surmises its potential effect on the business.  In essence, they look at the initial information and determine whether the emerging concern is a crisis or something different.

The most common error we see is the assumption that a crisis and emergency are fundamentally referring to the same thing.  While they may overlap, they have very different impacts on the company. An emergency is generally an operational matter requiring coordinated responses to protect health, safety, environment or security of the people and operations associated with the incident.

A crisis is a corporate concern involving a threat to the reputation, finances, stakeholder relationships or viability of the business. An emerging crisis can threaten a company’s social license to operate, just as an emergency can threaten a facility. A crisis is a unique situation that may arise from an emergency but also arises from many other corporate issues that go well beyond what is applicable for an emergency response.  The trick for leadership is to determine when they have crisis potential and since an emerging concern is a matter of perspective, it’s important to get the right people’s perspectives in the very beginning.

Since emergency management processes have been extensively drilled for years, asset-based organizations common in manufacturing, oil, gas, chemicals, and energy typically think of crisis events that can be observed visually such as fires, spills, explosions, multiple injuries and similar events that are associated with rescues, flashing lights, and sirens.  Even though those are horrible situations, it’s not always true that those events equal a crisis.  Depending on the preparedness and response capabilities of an organization, many of those events could be classified as emergencies only.

Conversely crisis situations can originate from emergencies but often originate from things that are not easily observed such as leaks about earnings or production, reputation attacks, improper relationships, ethics violations, criminal activity or rumors.  It’s important to quickly distinguish the potential of any event of significance and give it an insightful review by those who are best able to put it in the appropriate context to ascertain its potential and figuratively sound the crisis alarm.

You may be saying to yourself that you already have this system in place.  You may also be familiar with different risk, rank or consequence modeling tools that use the words like “tier”, “category” or “level” for categorizing risks, labeling emergencies, levels of response and financial losses.   Those tools are designed to highlight the interests and focus of the disciplines that typically use them.  Health, Safety & Environment (HSE), Security and Risk Management departments, as well as the National Response Center and other government agencies that regulate industries commonly use these systems and measurement terms.

However, despite the information these tools provide, they almost never translate into a usable “big picture” characterization of the emerging crisis issue and a problem for company leadership.  These tools are guides and technical management instruments that assist with the organization of resources and levels of capital commitment expected.

Unfortunately, those classification tools don’t give you that “special picture” that comes from senior level perspectives, instincts, and experience.  That’s the purpose of a Crisis Assessment Team; to quickly get focus on the “special picture” that characterizes the potential for a catastrophe to the company.  That picture doesn’t organically focus when you’re presented with “This is a Tier 3 event”, “we have a level 4 risk” or “this qualifies as a category 2”.  Those classifications are critical for any number of things but they’re not what we’re talking about.

Who are the people that can really determine you have a crisis or if crisis potential is present?  When should those people try to make those determinations?  Wouldn’t it be better if those people knew about such an event up front before it got out of hand?

We know of many crisis events that started out simply as a small wound but quickly festered and became septic for the company.  They were routine emergencies, security or public relations issues that strayed off course and weren’t known by leadership until the crisis was evident to everyone.  Many times, those leaders will say that they could have seen it coming and mitigated the situation if they had known or been involved from the beginning, but no corporate executive can be expected to handle everything.

Emerging Concern, Crisis Alert and Crisis Assessment Team

It’s that situation that a Crisis Assessment Team will help to avoid or mitigate.  They’ll be able to activate the crisis management team with authority and sense of purpose.  Leadership won’t be coming in after the fact and attempting to catch up or come from behind.

Given a set of simple parameters defining when a Crisis Assessment Team notification is warranted, the evaluation of any situation can be done in just a few minutes either in person or using controlled secure communications.  The team could be composed of the following or their equivalent.

  1. Senior Crisis Management Process Owner
  2. A senior leader of the affected business, asset, function or department
  3. Senior Counsel – A senior attorney that thoroughly understands company operations and positioning.
  4. A senior leader of Communications and Public Affairs
  5. Head of Health, Safety, Environment, and Security

From a quick and candid discussion, an emerging concern can be evaluated for its potential impact to the overall operations of the company, potential to result in litigation, potential impact to the safety and security of employees and the public, and potential for damaging media, stakeholder or government involvement.

Of course, there are many reporting and notification plans and systems in every industry.  Many already have a mechanism for this type of evaluation in the process, but it usually waits until the emerging concern is sufficiently advanced to warrant executive notification through some sort of crisis alert. The idea here is to instead establish a quick, unobtrusive mechanism to advise and involve the crisis assessment team early.

Even if a decision is made to wait and observe with no crisis management team activation, at least they’re aware of the wound and can provide first aid or choose to see if it will heal on its own.  The dominant purpose of a Crisis Assessment Team is to get leadership awareness at the earliest possible moment.  They can decide that activating the crisis team is immediately warranted, not warranted or needed in a limited capacity.  At least they’ll have options from the beginning rather than waiting until the issue is already cemented or lost.

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.

 

Transformational Crisis Issues

Transformational Crisis Issues

If managing the unfamiliar world of a transformational crisis keeps you awake at night, you’re not alone. Many top executives worry most about bet the company, reputation destroying problems and crisis issues they cannot anticipate or control. Part of the reason is they are dealing with the unknown. They can’t even know whether it will be a scandal, terrorism, a sudden change in public sentiment or some other unknown that will bring their company to possible ruin.

transformational crisis issues

Companies can face much worse, but you can be sure there has been much consternation at Facebook in recent weeks. One moment they seem to be handling the pesky problem of government concern, with a couple of officials even making petulant comments implying that the government just doesn’t get it. Then there were more revelations and soon the headlines included words such as Scandal and Game Changer.

One of the problems with a transformational crisis is that you really don’t know with certainty whether, when or where the next shoe will drop. It’s akin to an emergency response where you don’t want to state the reason for a major industrial incident before the investigation is completed, only it’s on steroids. At the same time, you need to do what you can. The best start is to have integrated crisis communications and crisis management programs in place.

In a previous post, we discussed ten crisis scenarios, but that only alluded to the kinds of surprises that await you in a transformational crisis and the crisis issues that may confront you. Now, to give you a head start we will give you some examples of the unexpected situations you may find in transformational crisis issues:

crisis issues transformational crisis

  1. Bankruptcy – You may just find it amusing when they pull the water cooler out of your breakroom, but that will change quickly when you learn that your PR firm won’t support you anymore and you can’t operate some of your communication channels without the “non-essential” support staff you lost. Many of your trusted vendors are not getting paid for past work and unless they understand what’s going on they may become your adversaries. The outside attorneys seem to be managing everything and they are now representing your company in Congressional inquiries. Their focus is on preventing greater legal risks rather than maintaining good relations. You can kiss goodbye the Congressional support you were getting in an international dispute.
  2. Litigation – Controlling the company’s legal risks has become the priority and outside counsel’s role has become increasingly important. Unless you have remarkably insightful counsel, your relationship preserving and building efforts will be pushed to the side. You may also find that some of your most trusted internal sources and even top executives are not as helpful because of their own personal jeopardy. They may be getting personal legal advice that is at odds with your view of the company’s best interests.
  3. Hostile takeovers/activist investors – With an activist investor or hostile takeover you can assume they have been carefully studying you for some time. They know what they are doing and have thought through the process many steps in advance. You seek additional support from firms or allies only to find them conflicted. You also need to consider how people’s short-term self-interest can override the long-term perspective you used to admire in them. If you address these assaults in the standard way, without entertaining creative thought and analysis, you may find that your every action has already been anticipated and successfully blocked.
  4. Third party incidents – If you are a business partner, customer, transporter, industry peer or otherwise associated with another company’s crisis, you will find yourself drawn in. Apple’s response to the Facebook scandal highlights this. Even in industries that consciously avoid criticizing other companies, something will slip. An intemperate comment from a lower level employee can draw you in. If the public reaction to their crisis is strong, you can be sure that there will be great interest by elected officials and this could result in punitive legislation that punishes everyone in your industry for your competitor’s failings.
  5. Corporate malfeasance/ government investigations – Prepare yourself for scorched earth. Many people will do anything to protect themselves and the things they value. Plea deals are just one example. You could also find that the good friends and government officials you helped elect have become your most vocal critics as they scramble to distance themselves from your growing scandal.
  6. Expropriations/ abrogation of contracts/ sanctions – Your ironclad contract that was carefully written and negotiated by some of the most brilliant legal minds in the world is enormously important until a sovereign government decides it is in their best interest not to comply. Oh sure, you can take it to international arbitration and enlist support from your government to pressure them, but don’t let yourself be fooled into thinking the other interested parties will see your position as their primary interest. In the game of international chess, even the biggest, most powerful companies can become pawns.
  7. Executive misconduct/sexual assault – Have you ever had someone you deeply trust and admire lie to you or even shift blame for their guilt onto you or another colleague? It is a horrible experience that shakes the very core of your beliefs and often lessens your ability to think clearly and respond appropriately. Just having to navigate through what and who is right is enormously challenging. Imagine how the complexity is magnified when one of the parties shifts the blame to you and the company for your actions or lack of action. Would it affect your judgment, if that person was likely the victim?
  8. Cyber-attacks/digital assaults – You learn that one of your trusted employees or vendors enabled a serious data breach. Was it an error or deliberate? Have you corrected every impact? Who and what was affected? How do you notify your stakeholders and what assistance do you offer? Consider what you would do if one of your predecessors authorized the payment of the Uber ransom.
  9. Mass shootings/ terrorism/ acts of war – Your company, employees, and customers are the victims of senseless violence and you’ve done everything within reason to prevent this, but some hold you responsible because you didn’t do enough. Hotels that were expected to prioritize guest comfort and privacy may now be expected to deliberately observe the behavior and actions of someone checking in a hotel. Previously accepted protocols with choke points to ensure screening and access control may now present opportunities to target terror and expose companies to new liabilities.
  10. Targeted reputational attacks – An activist group aggressively opposes one of your major operations and extensive research reveals that the funding allowing this expanded activity indirectly came from a foreign government intent on destabilizing our society. You’re both the target and collateral damage.  You’re doing business in that country and are reluctant to lose it. You also know that foreign interference has become so politicized that by revealing this information you risk more damage from the reactions of skeptics who won’t believe you.

overcoming transformational crisis issues

Sadly, this list only scratches the surface of the surprises you may encounter when you manage transformational crisis issues. We hope it will at least jump-start your thinking about necessary preparations before you encounter a transformational crisis. Your best bet is to identify sources and experts who have already dealt with many transformational crisis issues. Here we’re talking about professionals who have weathered the headline-grabbing, major issues that can ruin companies and reputations, as well as change entire industries. While they may not have handled every detail of a first-of-its-kind crisis perfectly, they learned a great deal about what works and doesn’t work in these extreme situations.

Managing transformational crisis issues is never easy and many fail, but if you line up the proper expert advisers and prepare to the best of your ability, you will get more right than wrong, impress your stakeholders with your resilience and ultimately succeed. Initially, managing the risk of a transformational crisis may still keep you up at night, but eventually, it will lead you to the constructive preparations that allow you to control the nightmares.

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Email: info@corporatecrisisgroup.com

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