News

The violent events we have recently witnessed serve as a reminder that all our contacts need to know how to minimize harm in the unlikely event they are around violent situations involving weapons. In the hope that it will save others from harm, we are sharing a two minute segment from one of our security training programs on the standard protocol for dealing with violent circumstances. Please share it with your friends and colleagues.

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.

 

Secure Communications – Corporate Imperative

Secure Communications – Corporate Imperative

When asked about the importance of secure communications, most executives agree that it is a priority. For most the focus is on whether their phone and computer passwords are still private, and secondarily on whether their personal material is hacked through an internet service or social media provider. Unfortunately, that model is woefully insecure to us both personally and professionally. In fact, in the business world, secure communications are imperative.

Secure communications and business risk

Consider how much your organization spends annually on acquiring new businesses, customers, technology, processes, strategies, research, development and other strategic activities designed to maintain profitability and ensure competitiveness in ultra-tight markets.  These are enormous investments that need to be protected through secure communications.

It’s not dissimilar to personal investments in planning for continuity of income at retirement.  If someone was managing my investments or representing me operationally or financially, I wouldn’t want them to let strangers sitting next to them at an airport see what they were doing or for whom.  I wouldn’t want anyone to know my name, what I was worth, my address, phone numbers, or account numbers, etc.  Yet, that very example happens every day at every airport and countless other places globally.

While we like to think that most people share our high ethical standards, we also need to realize that the planet is full of schemers, opportunists, and spies just waiting for the right moment for the right information.  This criminal enterprise is a gigantic business and the stakes are higher than you may think.  A simple online search using the terms industrial or economic espionage will quickly reveal the scope of the problem, the major players, reach and cost of the impact.  Upon close examination, the statistics show this type of crime has permeated every aspect of commerce.

Some of these criminal efforts are highly sophisticated and must be addressed through technology.  We’ve touched on them before with one of our previous blogs on technical surveillance counter-measures (TSCM).  Other efforts are ridiculously simple.  They involve exploiting someone who’s not paying attention to their personal or company security or orchestrating a situation (social engineering) where they are able to deceptively convince someone to willfully bypass security measures and expose vulnerabilities.

secure communications vulnerabilities

It’s important to be aware that this happens, but most people either don’t believe it’s applicable to them or don’t see how their employer’s widget or processes could be valuable to anyone else.  To be fair, in many cases their employer never told them.   In fact, in many situations, the employer is more focused on keeping employees from stealing rather than for training employees to watch for theft from others.

The reality of today’s environment is that there are increasingly sophisticated threats at every turn.  If what you know, how you know it, and what you do with it is valuable to others besides yourself or your employer, there are people seriously interested in obtaining and exploiting that information.

That doesn’t mean you need to be paranoid, but it does mean you should take reasonable precautions to protect your proprietary and commercially significant information. A great way to start is simply by utilizing secure communications in any potentially sensitive area. There are low-cost, reasonable steps you can take to protect the integrity of your information through communications.

secure communications

There’s much truth in Henry Kissinger’s comment that “even a paranoid can have enemies.” Fortunately, you don’t have to be paranoid because there are corporate security and crisis management professionals such as us, who are watching these trends for you. But, you do need to take reasonable steps to protect yourself, your business and your information. It starts with not allowing yourself to be an easy target.

If you use secure communications channels involving encrypted emails, voice, texts, documents, and images, you will significantly harden yourself and your company from the prying eyes of those who want to steal your secrets or do you harm. Of course, there are still vulnerabilities in most of these systems, but you will have made it significantly more difficult for criminals to take advantage of you, and most will move on to easier targets.

Ultimately, you want to protect your company from those who are deliberately targeting you, and there are preventative measures you can take. In the interim, even these basic secure communications measures will help you avoid the thousands of others who are looking for soft targets every day. In a future blog, we will walk through some of the specific technologies that may help you get to the next level and provide the secure communications you need.

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.

Crisis Manager – Global Operative’s Adventures

Crisis Manager – Global Operative’s Adventures

I really love what I do as an international crisis manager.  Over a lifetime of challenging experiences, I’ve learned how to protect owners and investors from unusual events that fall beyond the scope of normal operating environments and work to teach them to do the same.  That often means organizing and doing the things for which there may be little or no expertise within the company.

Crisis Manager Adventures as Global Operative

On any given day I could be managing an oil or chemical spill, building emergency management programs, managing security emergencies, training responders, leading investigations (accident, misconduct, or theft), orchestrating a product recall, conducting expat evacuations from threats in foreign countries, or helping facilitate the resolution to a kidnapping.  My job has highs and lows like every other kind of work, but it’s always interesting.

On one job you’re writing policy and procedures and the next, you’re on an island looking for a bomb in an industrial gasses plant.  I’ve consulted on civil unrest, natural disasters, counter-espionage, spills, releases, fires, explosions, blowouts, embezzlement, terrorism, trafficking, and executive protection.  Work has taken me to places like Gaza City, N’djamena Chad, Buenaventura Colombia, Cuiaba Brazil, Bangui CAR and countless unusual places around the world. They are all fascinating and important, but most are not likely to make it into the Lifestyles of the Rich and Famous. Somehow the problems I work rarely seem to require that I go to Phuket, Grindelwald or Monaco.

It’s always interesting with ever-changing companies, people, problems, locations, and emotions ranging from silly happy to multiple variations of misery and fear.  I may not strike you as being too exciting, but the people I’m privileged to work with and work for are some of the most interesting, intelligent and well-traveled people in the world.  They’re a mix of companies’ and organizations’ senior leadership and functional executives, domestic and foreign government representatives, public and private sector intelligence and security specialists, HSE heroes and IT cyberwizards.

complex intelligent

Then there’s the ridiculously smart international legal experts, financial gurus, forensic auditing technicians and a cornucopia of other brilliant specialists in various disciplines.  It’s sometimes like working on a movie set. You know you’re playing your role to the best of your ability, but all the main characters and heroes are Academy Award winners and the real thing.   You’d be right if you guessed that I have a lot of stories, but you’d be wrong if you thought I share many of them.

Most of the stories are confidential, so I’d have to scrub out the interesting details. Others are so extraordinary that people assume you’re grossly exaggerating, bragging or simply lying. To those who don’t know my world, it may seem like a fun, jet-setting life in the fast lane, but that’s not the case.

Escaping most is how you had to leave your wife’s birthday party without notice, travel 36 hours on no-name airlines to a place where they don’t want you and then spent 30 minutes on a dilapidated 50-year-old helicopter with no comms gear or ear protection.  They missed that you slept on a cot in an unairconditioned shipping container and that you were greeted by “don’t drink anything you didn’t bring”, “this place is dangerous for us and much worse for you.” Your companions are usually either those who had the problems or those who helped you resolve them.

Dangers for Crisis Manager

Dangerous and forbidden to enter sign

You might think being a crisis manager would make me a paranoid pessimist, who sees the worst possibilities for the future, but you’d be wrong.  I’m an incurable optimist.  The reality is that I’ve spent a lifetime traveling around the world managing bad situations and finding solutions that mitigate the effects of major events.  My experiences standing knee deep in big messes prepare me to anticipate and respond to problems while increasing my confidence in overcoming adversity.

Thankfully, most people only personally experience a few, if any, major disasters, accidents, terrorists, violent conflicts or other horrifically ugly events in their lifetime.  That limited experience tends to leave most with the belief that these events occur but that the experience is statistically unlikely.  Thus, when big events happen, most people are caught off-guard. You often hear comments like “I never thought this could happen here.”  That sentiment is universal. It’s in every culture and language; it’s the norm.

In contrast, if your life has revolved around preventing, managing and lessening the impact of these events, you are in-tune with the potential for such things to happen in any given situation.  I may attend a crowded performance and begin looking for crowd threats and individual safety issues with higher interest than for the artist or event.  I drive over dams wondering if they might fail and if there are functional alarms in place for warning the public of a breach. I proactively look for exits and often know how many steps they may be from me, so I can find them in the dark if needed.

I notice unwatched entrances, distracted guards, unfollowed protocols, and exposed bellies.  I look for the terrorist, watch for the thief, know who’s behind me, what’s in front of me and believe in having the right tools, extra supplies and being prepared.

So, if the job calls for routine, relatively low-risk work with minimal consequences when things go awry, you probably don’t need a crisis manager. But, if you want to avoid, prepare for and deal with the worst, you want an experienced crisis manager to guide you. Regardless of your risk or nightmare, they’ve likely experienced similar circumstances and can use that perspective to walk you through the situation, so you recover in a better position than from where you began.  Ideally, you’ll find someone like this with global crisis management experience who has overcome many obstacles and can help you deal with the contingencies you never even imagined.

No matter how chaotic the situation, and how desperate things seem amid angst and destruction, a top crisis manager must be able to coalesce resources, intellectual capital, and provide a way to survival and recovery.  To do that effectively, you must at least have thought about the myriad of possibilities ahead of time and considered the bad outcomes from any given situation.  I think that’s what I’m doing; always practicing situational awareness by constantly looking at the surrounding environment and analyzing it for risks.  That’s not paranoid. For an international crisis manager, that’s just prudent.

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.

Media Training – Yes, They Can Print That

Media Training – Yes, They Can Print That

Why bother with media training for executives, operational managers or first responders? Well, there’s an enormous difference between reading or listening to the news and being the news. Perhaps the following story will help explain why being prepared is essential.

An operational executive had been frustrated by protesters slowing progress on his major new project. As he was about to enter the site, a reporter asked if he would like to comment on the protests. He had been coached to refer them to the public relations department, but he was frustrated and didn’t want to wait. So, he blurted out “sure, there’s been a lot of fake news about this project and it’s about time you people got it right!”

Media training

Media

He then proceeded to tell the reporter about the importance of the project to the company’s bottom line and how the protesters were agitators who didn’t want anyone to make a buck. He then proceeded to name big banks and politicians who fully supported the project.  “Of course, there are risks, but you can’t ever accomplish anything without taking a risk,” he said. “I’m not going to be intimidated by these local hayseeds who don’t know anything but their family farms. Progress always has a cost.”

The story wasn’t pretty. He let his anger get the best of him and undermined weeks of careful messaging. Worse yet for the PR department, he was furious that they allowed the story to be published. It became a political battle between the executive and PR, but the company was the clear loser. Overnight they became the company that couldn’t care less about people or the communities they harmed. The formerly supportive politicians were forced to come out against the project and the banks responded that they were reviewing their lending decisions.

The PR department knew the executive could be a loose cannon, but he was an important executive and they thought they had protected the company by speaking for him. Unfortunately, ignorance is not bliss and avoidance was a major mistake.

Why did this happen?

The executive had never been media trained and he thought reporters had to submit their stories for edits and approval by the company before the story could be published.  Sadly, in a world where many executives control their day-to-day world through budgets and delegation of authority, he may well have assumed his company could control a free press just like the ad copy he occasionally approved.

So what’s the lesson for those who are more aware of the way media relations works and the ground rules?  Don’t expect others to understand what you know. When the impact on corporate reputation is so great, we shouldn’t just assume that they have the proper grounding in media relations or be too afraid to recommend media training.

What needs to be corrected?

The solution is to provide media training appropriate to the executive’s position. Ideally, anyone who may need to talk with reporters should be media trained. In large organizations, this can be dozens of people and they can be efficiently trained in groups of four to eight people. However, it is often best to train senior executives on a one-on-one basis.

Dedicated media training is particularly important for high-level executives. A bad media encounter can be disastrous for both the executive’s reputation and the company. Every media encounter can be a career limiting opportunity, even for those who are very experienced. That’s why refresher media training can also be important for PR professionals and spokespeople.

To see the risks, watch this clip of the disastrous Tony Hayward comment on May 31, 2010. The soon to be replaced CEO said “There’s no one who wants this over more than I do. I would like my life back.” He had started to say he was sorry for the harm caused to so many, but the self-centered comment quickly ruined any sympathy that might have existed for him or his company.

How to proceed

Media training can usually be arranged through crisis communications consultants, your current PR firm or communication agencies with established training programs. Most high-level executives will appreciate the opportunity to improve their presentation and interview skills.  Media training generally lets them know what to expect, explains tricks of the trade for reporters, helps craft and deliver key messages, reinforces the need for appropriate attitude and compassion, and includes the all-important on-camera mock interviews so executives can see their own performances.

Be sure the executive knows the media training is confidential and recordings will not be shared with others. You may even want to schedule the training in a location away from the office, to reduce the risk of interruptions.

It’s a Win-Win. Media training is an important professional development opportunity that helps the individual stay on message and project an even more polished executive presence with higher management, boards and key stakeholders. If he appreciates the importance and complexity of media interactions, the media trained executive will be better prepared to articulate and advance the company’s interests.

This operational executive example is a fictional account drawn from decades of real-world experiences.

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