The Green Sheet Online Edition

August 09, 2010 • Issue 10:08:01

Best practices for crisis communications

By Peggy Bekavac Olson
Strategic Marketing

When a crisis occurs, companies can be transformed from being flagship brands to fighting for survival almost overnight. Just think about how recent events involving Toyota, Goldman Sachs and BP have sullied their sterling reputations. These companies have lost sales and significant shareholder value, had their credit ratings downgraded, been subject to government investigation, fined, named in multiple lawsuits, suffered public ridicule - and they continue to pay the price.

A crisis is any situation that threatens or could threaten to harm people or property, seriously interrupt business, damage a company's reputation or negatively impact shareholder value. While you may not be Toyota, Goldman Sachs or BP, your payment business faces unprecedented threats and reputational risks, including interruptions in transaction processing services, processing errors, cyber attacks, loss of clients, bankruptcy, being sued by competitors, natural disasters and so on.

Are you ready?

While many companies now have plans for dealing with pandemics and natural disasters, fewer are prepared to combat cyber attacks, data breaches and data center disruptions. Varolii Corp.'s 2009-2010 Preparedness, Security and Crisis Communications Study notes that only 60 percent of companies have a plan for dealing with data center disruptions; 53 percent say they are prepared for data breaches; just 46 percent report being prepared for cyber attacks.

Every business is vulnerable to crises. The days of sticking your head in the sand and believing it can't possibly happen to you are long gone. Not only do you need to deal with a crisis operationally, it's imperative during a crisis to effectively communicate what's happening and what you are doing to resolve the situation. To accomplish this, you need to have a business continuity plan in place that includes a strong crisis communication strategy and tactical plan.

If you don't prepare for potential crises in advance, your business can incur significant damage because during a crisis organizational responses created on the spot typically break down. Stakeholders quickly become confused, angry and reactive if they don't know what's going on. You also run the risk of your company being perceived as inept, dishonest and perhaps even negligent.

Effective crisis communication is not difficult, but it requires advance preparation to minimize damage. The slower your business responds during a crisis, the more significant will be the damages incurred.

Following these best practices can put you and your company on the path to effective crisis communications planning, response and management.

Lay out a preemptive plan

• Form a crisis communications team: The team should be led by your president or chief executive officer, with your firm's top marketing communications or public relations executive and legal counsel as chief advisers. If you do not have in-house marketing communications, public relations or legal resources, retain outsourced professionals for this purpose. Other team members may include heads of major business divisions such as sales, operations, finance and human resources.

• Identify spokespersons: Spokesmen and spokeswomen are needed for all forms of internal and external communications, including dealing with the media by telephone, in person and on-camera, or at public or employee meetings, etc. These individuals will be the only ones authorized to speak on behalf of your business during a crisis. The president or CEO doesn't necessarily have to be the primary spokesperson; your legal counsel or communications executive make good candidates.

• Conduct spokesperson training: Training prepares designated spokesmen and spokeswomen to be ready to respond in ways that optimize positive feedback from all stakeholders during a crisis. All stakeholders, both internal and external, are capable of misunderstanding or misinterpreting information about your organization and it's the spokesperson's responsibility to minimize the possibility of miscommunication.

• Identify and know your stakeholders: Who are the internal and external stakeholders that matter most to your organization? Make a detailed list of who they are and their contact information. Consider employees to be your primary audience. During a crisis situation every employee represents your company and as such will be talking to others outside your contact list. It's important to communicate your message clearly, because it will be heard and repeated.

• Establish an emergency communications system: It is essential to identify the most efficient methods for reaching stakeholders via telephone, email, text messaging and the Internet to ensure timely delivery of crisis communications information. Forget the old-fashioned phone tree. Instead, let technology automate the process of contacting stakeholders from a pre-established database that confirms your message has been issued and delivered to all major stakeholders.

• Anticipate crises: Brainstorm to identify all the possible crises that could occur in your business and assess all vulnerability scenarios.

• Develop placeholder messaging: Placeholder messaging is used when a crisis first develops. You can prepare these messages in advance for a wide variety of vulnerability scenarios. Examples of placeholder messaging for payment companies hit by a data breach before all the details are available might be:
  • We have implemented our crisis response plan, which places the highest priority on limiting the exposure of payment information to unauthorized persons.

  • We consider the security and privacy of the information we process to be of the highest importance and share the concerns of cardholders whose information may have been exposed.

  • We have stringent security policies and are in compliance with government and industry security rules, standards and audits.

  • We will provide additional information when it becomes available, which will be posted on our website.

  Placeholder statements should be regularly reviewed to determine if they require revision and/or whether statements for additional scenarios might be needed as the payments industry continues to evolve.

• Practice: The more you prepare ahead, the faster and more effective will be your response to a crisis situation. Be sure to conduct crisis drills to familiarize your team with mobilizing efforts and work through the process, identifying any gaps or issues that may arise. This way you can resolve flaws in your system before a crisis flares up.

Establish a post-crisis action plan

• Assess the crisis situation: Factually assessing the situation as it unfolds is the first crisis communications step that can't be conducted in advance. Review initial information, discuss impacts with the crisis communications team, and implement the appropriate strategies you have already prepared and rehearsed to assure a rapid, coordinated, effective response. If you don't do this during a crisis, your reaction will be delayed and likely inept. Hastily prepared and executed crisis communications responses are never as efficient as those planned in advance.

• Develop key messages: Beyond placeholder statements, develop a series of crisis-specific messages to fit the situation. Keep it simple. Try to have no more than three main messages for all stakeholders and audience-specific messages for individual groups of stakeholders as needed. The most important thing to convey is empathy toward all those who are or might be affected by the crisis: acknowledge the issue, offer an apology and share your plans to amend the situation.

• Assign a spokesperson: Decide who should speak to both internal and external stakeholders from your pool of trained spokesmen and spokeswomen. Choose the individual or individuals best suited to address the particular crisis and the various audiences you need to communicate with.

• Activate your emergency communications system: Get the word out to all stakeholders in an efficient, timely and effective manner by activating your emergency communications system.

• Ride out the storm: Regardless of the type of crisis or how carefully you've prepared and executed your plan, not all stakeholders will react in the same way. View reactions objectively to determine if negative feedback stems from the way you communicated or an individual's unique interpretation. Decide whether follow-up communication is necessary to remedy the situation or if it will actually make matters worse. If you think more communication is worthwhile, give it your best shot.

• Repair your reputation: Your key messages are generally sufficient to protect your company's reputation. However, when significant image reparation efforts are justified, initiate them post-crisis as business operations return to normal. Repair strategies include attacking the accuser, denial, making excuses, stating your good intentions, apologizing, among others. Your crisis team should evaluate and implement one or more strategies when warranted.

The goal of crisis communications is to receive fair and accurate media coverage throughout a crisis, while maintaining or restoring confidence in your business and protecting your company's image among all stakeholders. Although advance preparation has increased dramatically in recent years, many payment organizations remain unprepared or underprepared for crises, creating the potential for irreparable damages should such an event strike.

For the sake of your business and its stakeholders, take steps now to protect your company image in the event of a crisis. Remember, the way in which a business responds during a crisis can determine whether the event builds or seriously damages the company. Ultimately, it can mean the difference between staying in business and being forced to declare bankruptcy.

Peggy Bekavac Olson is the founder of Strategic Marketing, a full-service marketing and communications firm specializing in financial services and electronic payments companies, after serving as Vice President of Marketing and Communications for TSYS Acquiring Solutions for more than five years. She can be reached at 480-706-0816 or peggyolson@smktg.com. Information about Strategic Marketing can be found at www.smktg.com.

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