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This is the first article in a two-part series, authored by our Communications Director, Cherie Hartley.
In part one, Cherie describes the definition of a crisis; key considerations in crisis comms and highlights one company that pivoted its strategic offering during the COVID-19 outbreak to turn a major potential revenue downturn into an opportunity.
In the current ‘COVID-19’ new world order where we are witnessing unprecedented levels of panic, fear and devastating effects on businesses around the world, now more than ever seems like an appropriate time to discuss the importance of crisis management planning.
Even if this current situation doesn’t have the potential to cause damage to your company, it’s no doubt raised the question of how you would and should respond if it did!
But first… how is a crisis defined?
A business crisis can be defined as “any situation which has the potential to damage long-term confidence in an organisation and its leadership, or which can affect its ability to operate normally.” All businesses are therefore susceptible to crises, and these can fall into a number of different categories, including financial, organisational, personnel, technological, environmental or natural crisis.
Predicting and preparing for potential crises can dramatically ease the pain of dealing with them and the potential impact they can have… this is because the credibility of an organisation often depends on its ability to respond, quickly!
I’ve spent countless hours throughout the course of my career defending the value of a crisis management plan to clients. I’ve seen the devastating results on companies when they aren’t prepared, and then unexpectedly hit by a crisis. I’ve also seen the reverse – when companies who are prepared have been able to turn a crisis into an event that ultimately had a positive impact on their brand reputation because of how they managed it.
There have been numerous examples of companies responding effectively during the current COVID-19 crisis, and unfortunately many who have not. There is the now famous incident of adidas declaring “Closing is easy, staying open requires courage” only to backflip 24 hours later following widespread consumer backlash. Then there was McDonald’s campaign to separate its famous golden arches in a demonstration of social distancing, only to withdraw the campaign after suffering criticism for being opportunistic, especially in light of what little they were doing to protect the safety of their own employees.
One example I particularly love of an organisation getting it right is French company LVMH. LVMH produces perfume fragrances for the likes of Dior and Givenchy, however since the Corona virus outbreak demand for the products have obviously dropped considerably. LVMH therefore made the decision to utilise their facilities to make something much more in demand – small bottles of hand sanitisers. The company is now producing and delivering hand sanitisers free of charge to health authorities and hospitals. Not surprisingly they have received a considerable amount of media attention around the globe, thereby ultimately positively impacting their brand reputation.
However, crises are unique to each individual company and there is no one-size-fits-all solution for crisis management. Every organisation needs to identify potential risk factors, such as: What situation might damage your sales of brand reputation? Can you foresee issues with your supply chain? Which factors may impact financial results? How can you protect your customers, employees, investors and other stakeholders?
The development of a comprehensive crisis management plan will ensure your business is prepared for the possibility of an unplanned event. If it’s a good plan, it will even prepare you for a macro event of the magnitude of COVID-19. It will consider the steps you need to follow and which people you need to have by your side to help appropriately work through a crisis.
Changing reputation management landscape
Before diving into the nuts and bolts of a crisis management plan, it’s important to understand it in the context of the current media environment. Over the past few years there has been a huge shift in the corporate reputation management landscape with the dominance of social media across the globe. Put simply, everything is now visible, and opinions can be easily voiced by ordinary people from the comfort of their own homes. Companies and brands are under more scrutiny than ever before and there are new ‘value’ based risk categories that are continually evolving for organisations to manage, for instance: racism, sexism, LGBT rights, #Metoo, sustainability and religious discrimination to name a few. Why are ‘values’ so important? Well 73% of millennials and 77% of Gen Z consumers are prepared to pay more for products or services from companies “dedicated to social and environmental change” according to a 2018 survey by Nielson.
Social media has never been more important than in the current climate, as self-isolation and social distancing have driven the global population online in order to feel ‘connected’. As a result, many companies’ reputations are either flourishing or floundering as a result of their online strategy and their ability to communicate effectively via these channels.
The topic of effectively managing social media channels in a time of crisis will be a future blog post, but the point I want to make here is that it’s a critical communications channel to factor into any crisis management plan, with its own set of rules and timelines to consider.
Now that we have set the scene in describing how a crisis is defined and foundational considerations, in next week’s post, I will provide you with a check list to help guide you through how to set up a crisis management plan. Of course, the best time to devise your plan is when there is no crisis in play, but the tips I’ll put forward can help you structure you thinking, even in the thick of a crisis situation.